KASIKORNBANKGROUP strives to offer financial services of unsurpassed quality and a satisfying experience to match our slogan “Towards Service Excellence”

MISSION KASIKORNBANKGROUP aims to be a strong Thai financial group that provides a variety of financial services of world-class quality responsive to serve customers’ needs by harmoniously combining technology and human resources so as to achieve optimal benefits to customers, shareholders, employees and the country. VISION KASIKORNBANKGROUP aims to be the strongest, the most innovative and the most proactive Thai financial group in serving customers. VALUE • Customer Satisfaction • Belief in Teamwork • Dedication to Professional and Ethical Conduct • Commitment to Discipline • Proactiveness FINANCIAL HIGHLIGHTS (Consolidated Financial Statements) As of or for the year ended December 31, 2007 2006 2005 2004 2003 COMMON SHARE INFORMATION Per share (Baht) - basic earnings 6.28 5.74 5.87 6.49 6.27 - book value 41.87 37.04 32.91 28.07 21.99 - dividends 2.00 1.75 1.25 1.00 - Share price (Baht) 1) - high 91.50 73.50 70.50 66.50 66.00 - low 78.00 49.75 50.00 41.50 25.75 - closing 87.00 61.50 70.00 52.50 65.00 Common shares outstanding - average basic (thousand share) 2,387,438 2,381,474 2,371,366 2,362,467 2,353,010 - end of year (thousand share) 2,388,202 2,382,147 2,373,294 2,363,625 2,353,518 Market capitalization (Million Baht) 207,774 146,502 166,131 124,090 152,979 VALUE MEASURES Price to earnings ratio (PER) 13.84 10.72 11.92 8.09 10.37 Price to book value ratio (PBV) 2.08 1.66 2.13 1.87 2.96 Dividend yield (based on closing share price) 2.30% 2.85% 1.79% 1.90% - Dividend payout ratio 31.88% 30.55% 21.36% 15.45% - OPERATING RESULTS (Million Baht) Interest and dividend income 55,516 51,810 38,065 32,999 32,786 Interest expenses 18,085 17,197 7,283 7,033 13,212 Net income from interest and dividends 37,431 34,613 30,782 25,966 19,574 Bad debt and doubtful accounts 2) 5,887 5,419 3,662 2,761 1,434 Non-interest income 18,897 14,155 12,302 12,149 13,693 Non-interest expenses 29,029 25,561 21,426 19,847 16,953 Total income 3) 56,328 48,768 43,084 38,115 33,267 Net income 15,005 13,664 13,930 15,340 14,756 OPERATING MEASURES Interest margin 4.13% 4.10% 3.84% 3.20% 2.43% Efficiency ratio 51.54% 52.41% 49.73% 52.07% 50.96% Return on average assets (ROA) 1.55% 1.54% 1.68% 1.86% 1.87% Return on average equity (ROE) 15.94% 16.43% 19.29% 25.98% 32.47% Number of employees 12,320 11,219 10,303 10,110 9,912 BALANCE SHEET INFORMATION (Million Baht) Loans 762,505 677,207 626,946 592,588 547,918 Allowance for doubtful accounts 4) 25,852 32,993 37,439 46,346 67,533 Non-performing loans net (NPL net) 5) 17,600 27,282 N/A N/A N/A Non-performing loans (NPL gross) 34,980 46,495 56,217 72,809 92,319 Total assets 994,518 935,509 837,309 824,974 821,285 Deposits 783,822 746,260 690,337 705,570 684,946 Total liabilities 894,522 847,271 759,193 758,308 769,171 Shareholders’ equity 6) 99,995 88,238 78,114 66,348 51,765 Average assets 965,014 886,409 831,142 823,130 791,027 Average earning assets 907,383 844,867 802,289 811,832 805,244 Average shareholders’ equity 6) 94,117 83,176 72,231 59,057 45,446 Risk weighted assets 769,952 687,638 653,636 611,104 543,878 BALANCE SHEET QUALITY MEASURES Loans to deposits ratio 97.28% 90.75% 90.82% 83.99% 79.99% Equity to risk weighted assets 12.99% 12.83% 11.95% 10.86% 9.52% Return on risk weighted assets 1.95% 1.99% 2.13% 2.51% 2.71% Tier 1 capital ratio 10.74% 10.46% 9.53% 7.98% 10.46% Total capital ratio 14.62% 14.74% 14.47% 13.13% 17.48% NPL net to loans 7) 2.29% 4.14% N/A N/A N/A NPL gross to loans 8) 4.45% 6.85% 8.88% 12.30% 16.85% Total allowance to loans 3.39% 4.87% 5.97% 7.82% 12.33% Total allowance to NPLs 73.91% 70.96% 66.60% 63.65% 73.15% NPLs after allowance (Million Baht) 9,128 13,502 18,778 26,463 24,786 1) Local board / High-low share prices during the year 5) Non-performing loans net refer to the non-performing loan value net of total allowances for doubtful accounts 2) Including loss on debt restructuring 6) Excluding minority interest 3) Total income = Net income from interest and dividends + Non-interest income 7) Loans used in calculation are loans to general customers and loans to financial institutions after allowance for 4) Including revaluation allowance for debt restructuring doubtful account of non-performing loans 8) Loans used in calculation are loans to general customers and loans to financial institutions CONTENTS 7 Board of Directors’ Report 10 Management Report 12 Management Discussion and Analysis 1. Overview 2. Operating Performance and Financial Position Analysis 3. Operations of Core Businesses 4. Operations of Support Groups 5. KASIKORNBANK’s Investments in Subsidiary and Associated Companies 52 Risk Management and Risk Factors 1. Overall Risk Management 2. Risk Management 72 Report of the Board of Directors’ Responsibilities for Financial Reports 73 Report of the Audit Committee 75 Audit Report of Certified Public Accountant 76 Financial Statements 84 Notes to Financial Statements 188 Financial Summary 194 Corporate Governance Committee Report 195 Human Resources and Remuneration Committee Report 196 Corporate Governance 1. Rights of Shareholders 2. Equitable Treatment of Shareholders 3. Roles of Stakeholders 4. Disclosure and Transparency 5. Responsibilities of the Board of Directors 223 Dividend Policy 224 Corporate Social Responsibility Activities 231 Factors Affecting Investment Decisions 234 Organization Chart 236 Board of Directors 238 Board of Directors and Executives 245 Directorship of Directors and Executives in Subsidiaries, Associated and Related Companies 246 Changes in KASIKORNBANK Shares held by Directors and Executives in 2007 247 Management Team 251 Investments of KASIKORNBANK in Other Companies 256 Reference Information 257 Major Shareholders 258 Awards and Commendations 262 KASIKORNBANK 1. Domestic Branch 2. Foreign Exchange Booth 3. Signature Exclusive Center 4. Business Banking Center 5. Corporate Business Center 6. SME Business Center 7. Overseas Office 288 K Companies 289 Summary of Specified Items per Form 56-2 K Now A new dimension of knowledge that goes beyond financial services Board of Directors’ Report

KASIKORNBANK has always strived to grow and in every dimension, thus enabling the Bank to quickly develop into a strong Thai financial group, that provides introduce products and services which are appropriate to for our customers’ every financial need while generating the needs of each individual customer. maximum return for our shareholders. In addition, we continue our commitment to good corporate governance Despite the slowing Thai economy in 2007, due to our guidelines and social responsibility. strong commitment to excellence, KASIKORNBANKGROUP has achieved highly satisfactory results leading to the In 2007, customer centricity remained the vision and continuous growth of reputation and credibility, both within strategy of KASIKORNBANK, and was the guideline under Thai and foreign financial institutions. Our success reflects which the KASIKORNBANKGROUP operated. Guided by the strong commitment and competency of our employees, our service philosophy - “KASIKORNBANKGROUP: as well as the tremendous support we receive from our A People to Simplify Your Life” - and our newest financial shareholders, customers, and the general public, to whom innovation - “K Now” - the Bank offers advice and knowledge the Board of Directors of KASIKORNBANK would like to in various areas to customers at all levels, in addition to express its sincere gratitude. the full range of financial services already offered. This innovation benefits both retail customers, giving them a “Life of Comfort”, and business customers, supporting their ability to conduct “Business with No Limits”. To ensure long-term growth and leadership position, the Bank has initiated the “K-Transformation” project that helps build up competitiveness for the future. This project combines new technologies and detailed work and service procedures which are designed to create maximum satisfaction for our customers. The project will enhance Banyong Lamsam our employee’s capabilities in analyzing customers’ needs Chairman

MANAGEMENT REPORT • Management Report • Management Discussion and Analysis • Risk Management and Risk Factors

K Excellence Serving every aspect of financial life under the mark of quality financial service

MANAGEMENT REPORT For the year ending December 31, 2007 To enhance our competitiveness and maintain our or 5.58 percent, over the end of 2006. This was mainly leadership in banking business amid steadily intensifying attributable to an increase in deposits, which equaled Baht competition, KASIKORNBANKGROUP works to respond 783,822 million at the end of 2007, showing a Baht 37,562 to the diverse needs of each customer segment. One of million gain-representing 5.03 percent growth-over the end our latest efforts to reach all customers is presented with of 2006. Total shareholders’ equity was Baht 99,995 million, our ‘K Now’: a new dimension of knowledge that goes beyond rising by Baht 11,757 million, or 13.32 percent, over the end financial services, embodying a business philosophy best of 2006, due to 2007 profits. The capital adequacy ratio expressed by the phrase, “KASIKORNBANKGROUP: of the Bank and our AMC together thus reached 14.62 A People to Simplify Your Life.” percent by the end of 2007, significantly above the BOT’s For our operating performance in 2007, the Bank’s minimum requirement of 8.50 percent, where our Tier-1 consolidated net income totaled Baht 15,005 million, and Tier-2 capital amounted to 10.74 and 3.87 percent, increasing by Baht 1,341 million, or 9.81 percent, due to respectively. over-year increases in both net interest and dividend, as In the Bank’s core business operations during 2007, well as non-interest income. The increase in net interest our efforts in product and service developments aiming and dividend income was due mainly to accelerating loan for customer satisfaction, coupled with various innovative growth that resulted in net interest margins for 2007 rising marketing campaigns, have resulted in our broad-based to 4.13 percent, up by 0.03 percent over 2006. In the loan expansion over the year-end of 2006. The strongest meantime, higher fee income, gains on exchange and on growth was seen in retail business loans, which were 23.90 investments were the main contributors to the increase percent higher, followed closely by SME business loans at in the Bank’s non-interest income. 19.56-percent growth, and corporate business loans with Regarding our balance sheet, the Bank’s consolidated a 6.24-percent rise. Despite an uncertain investment and assets totaled Baht 994,518 million, increasing by Baht fund-raising outlook, the Bank’s corporate finance continued 59,009 million, or 6.31 percent, over the end of 2006, to expand. We remained the underwriter of choice for owing mainly to loan growth. As of December 31, 2007, debentures and participated in numerous syndicated loans the Bank’s consolidated loans were Baht 762,505 million, to customers in various businesses. Meanwhile, higher fee increasing by Baht 85,298 million, or 12.60 percent, over income was also seen in our currency and interest rate 2006. Our ratio of net non-performing loans (NPLs) to risk management products. However, treasury operations total loans had fallen to 2.29 percent by the end of 2007, of the Central Treasury Department during 2007 showed from 4.14 percent at the end of 2006. Similarly, the ratio a 5.13-percent drop in total interest and dividend income of gross non-performing loans to total loans had dropped from 2006. This was mainly due to falling domestic interest to 4.45 percent by that time, from 6.85 percent at the end rates during the year, coupled with volatile liquidity conditions, of 2006. These NPL reductions were mainly due to the especially in late 2007. sale of Bank and Phethai AMC NPLs, in accordance with To facilitate efficient KASIKORNBANKGROUP business our policy to reduce them to an appropriate level. Our total operations, we have proceeded with ongoing development consolidated liabilities as of December 31, 2007, amounted of support programs in the areas of human resources and to Baht 894,523 million, rising by Baht 47,252 million, information technology. Considerable emphasis has been placed upon various risk management policies, tools and

10 ANNUAL REPORT 2007 methodologies improved throughout 2007. In the matter of credit risk, we continue to enforce uniform credit policies throughout KASIKORNBANKGROUP, in line with BOT consolidated supervision guidelines. In addition, we have developed swifter credit underwriting and approval procedures while maintaining prudent control over risks-keeping them at acceptable levels. Regarding market risk management, the Bank has tirelessly developed the necessary platforms and procedures for timely and effective management of risks incurred from complex derivative-related transactions, as well as on other new, more sophisticated products. Not only have we prepared for changes in the operating environment that might have significance to our liquidity risk management, but we have also adopted new liquidity risk management tools, which can handle more complex tasks with higher precision, in accordance with international standards. Bills of exchange were offered to retail customers, thus adding another tool to our liquidity management. Furthermore, our operational risk management controls have been upgraded. All preparations for Basel II compliance have proceeded as planned, and our capital based on Basel II criteria has been reported to management internally on a monthly basis since the beginning of 2007, so we are certain of our ability to efficiently meet all standards embodied in this international capital accord. Due to our dedication toward various business developments, and our pro-active awareness of good corporate governance, the Bank in 2007 was widely commended with many awards and other marks of recognition from domestic and foreign institutions. Of note was an upgrade in the Bank’s Long-Term Subordinated Debt Rating by Moody’s Investors Service.

ANNUAL REPORT 2007 11 MANAGEMENT DISCUSSION AND ANALYSIS

1. Overview

1.1 Overview of Economy, Banking Industry and economy continued to receive support from exports and the Regulatory Changes surplus in the current account - thanks to growth from new export markets - while exports to the U.S. suffered a contraction. • Thailand’s Economy in 2007 and Outlook for 2008 In 2008, we expect the Thai economy to grow 4.6-5.2 Thailand’s economy grew 4.8 percent year-on-year in percent over the previous year, while oil prices and the slowdown 2007, down from the 5.1 percent increase of the preceding year. of the U.S. economy as a result of the sub-prime mortgage This slower growth was due to weaker domestic spending fallout will likely remain key deciding factors. Meanwhile, following political uncertainty that affected consumer and domestic inflation is expected to edge up to 3.0-4.0 percent, business sentiment. Despite the stronger Baht, the Thai from 2.3 percent in 2007, on the back of higher oil prices.

Thailand Economic Growth Forecast (Units: Year-on-year percentage change, or as otherwise indicated) 2008 2007 Private Consumption 1.5-3.5 1.4 Investment 2.5-6.5 1.4 Private 2.0-5.8 0.5 Public 4.2-8.3 4.0 Government Consumption 5.0 10.8 Exports 8.0-12.0 18.1 Imports 12.0-17.0 9.6 Trade Balance (USD millions) 5.7-7.7 12.0 Current Account (USD millions) 7.5-10.5 14.9 Headline CPI Inflation 3.0-4.0 2.3 Gross Domestic Product (GDP) 4.6-5.2 4.8 Source: KASIKORN RESEARCH CENTER CO., LTD. Facing higher inflation and uncertainties from the U.S. of many Thai banks to set aside additional allowance for economic slowdown, the Bank of Thailand, we think, may doubtful accounts to meet the prerequisites of the new adopt a more cautious tone in conducting their monetary IAS 39 international accounting standards, as required by the policy. As a result, commercial banks are likely to wait Bank of Thailand (BOT). However, net interest and dividend for a clearer signal from the BOT regarding their interest income rose over 2006, even though its over-year growth rate directions. Meanwhile, commercial bank lending in rate slowed in line with easing loan growth. According to the 2008 will depend on whether a turnaround in consumer BOT’s C.B.1.1 report, the Thai banking system - comprised and business sentiment-following the general election of fourteen banks - showed that total outstanding net loans held on December 23, 2007-will be able to sustain its as of the end of 2007 had risen 5.23 percent over 2006; this momentum throughout the rest of the year. represents a deceleration from the performance seen at the end of 2006 of 6.25-percent growth. Deposit growth has • Banking Industry and Competition followed a similar trend, with 0.06 percent lower total deposits In 2007, Thai commercial banking performance reported as of the end of 2007, versus growth of 6.19 percent exhibited lower total net profit than in 2006 due to the need seen at the end of 2006. One of the primary reasons for the drop

12 ANNUAL REPORT 2007 in overall deposits has been the floating of large tranches regulatory changes instituted by the authorities, with examples of FIDF and BOT bonds during the past year, which had the being such new imperatives as the Financial Sector Master effect of absorbing funds from commercial bank deposits. Plan II, Deposit Protection Agency Act, Financial Institutions As for non-performing loans (NPLs) in the Thai commercial Business Act, and of course, the mandates of the Basel II banking system, though they increased during 2007, with an Capital Accord. increase in net NPLs that reached as high as 4.86 percent of total loans at the end of the third quarter, this ratio dropped • Regulatory Changes1 to 4.30 percent by the end of the final quarter, which should Important regulatory changes that occurred and be compared to the level of 4.52 percent at the end of impacted commercial banking operations in the year 2007 2006; the reduction was largely due to write-offs and are summarized in the following: discounted sales of commercial banks’ NPLs to asset • Type and Valuation of Assets Used as Collateral management companies. that can be Deducted from a Book Value of Debts before Amid a softening economic trend that has marginalized Calculating Loan Loss Provisioning consumer and business loan demand, the competition The Bank of Thailand (BOT) issued a notification, ref. between commercial banks for market share has of course ForNorSor. (21) Wor. 938/2550, on May 29, 2007, re: “Type intensified and been manifested in both pricing and non-price and Valuation of Assets Used as Collateral that can be marketing strategies. Whether in the speed of credit Deducted from a Book Value of Debts before Calculating Loan operations and services, other measures of service quality Loss Provisioning”, wherein the existing table of eligible assets or aggressive promotional campaigns, commercial banks per Section 4.11 of BOT notification, ref. ForNorSor. (21) have undertaken initiatives in all these areas regards to Wor. 1974/2549, on December 21, 2006, re: “Worthless competitively attract customers. Concurrently, as commercial or Irrecoverable Assets of Commercial Banks”, has been banks have expected that the Thai economy during the revoked and three additional forms of assets that can be post-national election period would improve, and domestic deducted from a book value of debts before calculating loan interest rates have already reached the bottom, commercial loss provisioning have been added, being: banks have thus begun to raise their fixed-term deposit 1. Export Credit Insurance of the Export-Import Bank of interest rates since the third quarter of 2007. This trend Thailand (EXIM Bank), in which claims on such assets have continued into the final quarter of the year, having the effect been transferred to commercial banks beforehand. Commercial of deepening the competition for deposits between banks. banks are required to deduct this collateral from the book It is believed that the trend for 2008 will include continued value of debts up to 75 percent of this collateral valuation, competition among commercial banks. As for loans and credit before setting aside provisions. products, aside from external factors negatively impacting 2. Standby Letters of Credit (SBLC) issued by the EXIM Bank. the Thai economy, particularly the looming U.S. economic Valuation of this collateral that can be deducted from the slowdown, it should also be pointed out that many foreign book value of debts is 100 percent of credit limit pecified in commercial banks are gaining greater visibility in the market the SBLC. through their increasing stake in some Thai commercial 3. Avals or Letters of Guarantee (LG) issued by the EXIM banks, and are competing in novel ways that are more Bank. Valuation of this collateral that can be deducted from complex than ever before. In the matter of deposits, banks the book value of debts is up to 95 percent of aval, or will likely have to adjust their strategies to meet the challenge guarantee, limits. of other savings and investment alternatives that will be The new directive above not only helps provide greater competing with conventional bank deposits, e.g., capital opportunity to commercial bank customers to have better market instruments that offer higher returns than fixed-term funding access, but also reduces credit risks and the loan deposits at banks. Beyond these formidable challenges, loss provisioning burden of commercial banks. commercial banks shall have to take into account new

1 Details on other important regulatory changes during 2007 can be found in the MD&A Report for the period ending March 31, 2007 and September 30, 2007.

ANNUAL REPORT 2007 13 • Permission for Commercial Banks to Undertake transactions. Reports on the risk incurred in such investments Investments in Collateralized Debt Obligations (CDO), and must be made regularly to the bank’s executives. Permission to Conduct Deposit and/or Lending Transactions • Commercial banks must categorize types of investments, Containing Embedded Derivatives post separate accounts on them, specify any impaired value The Bank of Thailand (BOT) has announced a notification, on investments, and make disclosures on any investments ref. ForNorSor. (21) Wor. 179/2550, on November 16, 2007, in CDOs or structured notes, ensuring that the data is accurate re: “Permission for Commercial Banks to Undertake Investments and meets IAS39 international accounting standards. in Collateralized Debt Obligations (CDO)”, wherein they also Both of the above new BOT notifications have the purpose cancelled the previous notification, BOT ref. SorNorSor. (21) of urging commercial banks to display greater awareness in Wor. 128/2547, on August 25, 2004. They also issued another the conducting of CDO and/or structured note transactions, notification, ref. ForNorSor. (21) Wor. 178/2550, dated November ensuring that they have undertaken careful management of 16, 2007, re: “Permission to Conduct Deposit and/or Lending them and recorded them correctly in their financial statements Transactions Containing Embedded Derivatives”, so-called according to international accounting standards. They must “structured notes”, where, like wise, a previous directive was also demonstrate that they have clear risk management cancelled, that being BOT ref. SorNorSor. (21) Wor. 93/2547, systems in place, appropriate to the level of risk that they are on August 4, 2004. In summary: undertaking. They are mandated to ensure that they have • Commercial banks shall have to appraise the fair value of sufficient capital to cover these transactions, and must make CDOs in their possession as well as the value of Credit-Linked complete disclosures on the facts of such transactions, Notes/Deposits, First to default Credit-Linked Notes/Deposits, including the risk incurred. Proportionate Credit-Linked Notes/Deposits and structured With reference to the above, KASIKORNBANK has notes, including other hedging instruments similar to the not undertaken any investments in CDOs; as for structured above transactions. If they discover any net loss, this amount notes, the Bank has already adjusted our internal operations must be deducted from their reserve capital, and after such in accordance with these new BOT regulations. We began deduction, their capital shall not be less than the minimum to post these transactions in our accounts per IAS39 capital requirements set by BOT regulations. Appraisals of standards in early 2007. The Bank has already devised the fair value of the above instruments are to be conducted appropriate policies for dealing in the subject transactions, every month-end, and if their investments in the subject strategies for management of risk in them, and clear instruments exceed 1.0 percent of their total assets, they guidelines for controlling and auditing these transactions, must perform an impact assessment at each day-end. This all of which has passed the consideration and approval of notification became effective January 1, 2008, and must be the KASIKORNBANK Board of Directors. applied to their financial statements for the second half of 2007. Disclosures relative to this matter must be placed in 1.2 Direction of Business Operations the ‘Notes’ to their financial statements. • Banks must establish a clear policy for investments and • KASIKORNBANK in 2007 and Outlook for 2008 risk management on them. This risk management must be KASIKORNBANKGROUP (KGroup) wishes to respond separate and independent from the unit performing investment to the diverse needs of our customers via new dimensions

Participation in the Money EXPO 2007 KBank’s CEO introducing a new dimension of knowledge that goes beyond financial services “K Now”

14 ANNUAL REPORT 2007 by building a knowledge-based organization that adds value • K-WePlan is a personalized financial planning and to the services we offer our customers in all segments. management service that helps customers plan and manage We intend to offer more to our customers than basic their money to reach their financial goals. Our customers financial services by responding to their lifestyle needs with get a checkup to diagnose their current ‘financial health’. a business philosophy best expressed by the phrase, Then, they receive guidance in planning to further their “KASIKORNBANKGROUP: A People to Simplify Your Life”. personal goals, and are provided with various financial As a part of this monumental effort to reach out to our models that suit their situations. Appropriate financial customers, we are proud to present ‘K Now’-which of course products that fit customer plans and desires are presented can be read as the word ‘know’- as a financial advisory by our Customer Financial Planners (CFP), who have service that will offer new vistas in access to financial successfully passed the Thai Financial Planner (TFP) information, news and tips, all smartly presented to ensure training program conducted by the Thailand Securities it is all easy to digest to help our customers efficiently Institute (TSI) of the Securities Exchange of Thailand. manage their wealth. With this important dimension in our They will assist the customer in financial planning through new services, KGroup is adding value to what we already a financial planning program, exclusively developed by offer those who place their trust in us. KASIKORNBANKGROUP. In 2008, we expect to establish 102 K-WePlan Centers at major branches nationwide. As for our retail customers, K Now service will offer customers ‘Life of Comfort’, fully equipping them with As for our business customers, in addition to a information and modern technology for effective planning complete range of financial solutions to attend to customers’ and stability in every stage of life, from ‘pre-born’ to operational needs, K Now is a great step forward in ‘retirement’. In brief: assisting our business customers in achieving a stable, • K Home Smiles Club is a special value-added sevice growing operation where they are not limited by financial exclusively provided to KBank mortgage loan customers. constraints. We provide financial services, advice, tips and It offers before and after-sale features, covering a valuable expertise in doing business domestically and internationally, directory of information on housing developments, the offer insights into the current and future economic quality of each development, pricing, steps in applying for environment, and help customers find business allies and a mortgage loan, home design, interior decoration, additions seek out methodologies to effectively reduce operating & remodeling, as well as care and maintenance, plus help costs. A notable example of our offered financial solutions on problem-solving and repairs. All this information is is ‘K SME Care’, in which special support is provided to our contained in our refined ‘K Now’ database that customers SME customers in expanding their businesses. We have a can access at our business centers or via the Internet on four-sided approach to helping SME customers above and our website. Our customers will find the information and beyond conventional products and services with special aids listings quite thorough and complete. This is just one of to reinforce customer business. They are named: C-‘Capital’, our many value-added services to benefit our customers, A-‘Advice’, R-‘Research’, and E-‘Education’. aside from merely offering credit products.

K Home Smiles Club and K SME Care, a part of the “K Now” financial innovation

ANNUAL REPORT 2007 15 In addition, the Bank has undertaken many strategic 3. IT Capital (ITC) projects to improve our own resources and ensure we can This program seeks to develop our core banking system provide the best in support to our customers. A key project to achieve state-of-the-art performance standards and to improve upon our services is our K-Transformation Project, additional capacity to handle increased computing workloads which seeks to enhance our operational potential, taking incurred with new products and services. It is also needed great leaps forward in our capacity to handle business to assist in improved customer analysis, and to ensure greater needs. In this program, we are calling upon high technology data security. along with modern management to respond to customers’ 4. Financial Information System (FIS) needs more effectively, where the end-goal is the greater The Financial Information System program is intended satisfaction of customers with our services. The project to support computerized accounting functions within also helps our staff to work better and faster, easing KGroup, enabling managers to gain access to different operational steps and enhancing the Bank’s operations via dimensions of KGroup financial information. This program four component programs, being: includes all essential features of a modern accounting 1. Know Our Customer (KOC) system, including a Chart of Accounts (CoA), and is being This program is intended to increase our potential in data designed with the latest advances and to the latest analysis to better understand our customers. We want to know compliance requirements. This system will also have a who our customers are, what their service behavior has been like, single Bank-wide platform for planning and budgeting, as what unique characteristics they have that distinguish them from well as procurement support and payments. others in their customer segment, what bank products they have In 2007, we adopted a new CoA and a new general already used and what their additional financial services might ledger system to ascertain that these changes will result in be. All this information would be used in marketing efforts to smoother work-flows and a more efficient accounting system. assist in targeting better service to customers, meeting their financial needs and requirements as they arise. • Good Corporate Governance In 2007, we carried out the formation of this database KASIKORNBANK firmly believes that good corporate for marketing purposes that has dimensional fields identifying governance will lead to a sustainable banking operation, customers, the products/services they use, as well as and be a key to success and attainment of our ultimate customer behavior, etc. In utilizing this information, a pilot goals of maximum benefits to shareholders and assurance campaign was launched to targeted customers, offering of effective management, under a transparent and clearly them our new products and marketing promotions that higher standard. This will enable the Bank to maintain match their unique profiles. our increased competitiveness, as well as greater trust 2. Multi-Channel Sales and Services (MSS) and confidence among shareholders and investors, both This program stresses creating a favorable customer domestically and globally, and all other concerned parties. service experience via each and every service channel We continue to place great importance on good corporate that the Bank provides. Naturally, this means that each governance. Major activities during 2007 include: service channel must essentially be convenient to use. • We reviewed our Statement of Business Conduct, Our principle “Towards Service Excellence” guarantees Code of Conduct, Board Committee Charters and an impressive experience made real at all levels via the Corporate Governance Policy. implementation of strategic initiatives to transform and improve • We entitled eligible shareholders, as specified by the our operational procedures via each service channel. In Bank, to submit issues for consideration to include in the addition, we are designing and developing our sales and agenda of the Annual General Meeting (AGM). service functions to please our customers. • We entitled eligible shareholders to propose a qualified In 2007, we collected opinions, contributed by our candidate under the given criteria to be considered for various business units, and developed new operational director elections at the AGM. procedures in six areas: marketing, sales, services, deposit • We appointed an independent law office to witness transactions, receipts and payments, as well as credit services. and oversee that the AGM was conducted with transparency, in accordance with the Statement of Corporate Governance Principles.

16 ANNUAL REPORT 2007 • We published a booklet entitled ‘KASIKORNBANKGROUP • The ‘Corporate Governance Asia Recognition Award Corporate Governance’ to promote good corporate 2007’ was conferred upon us by Corporate Governance governance within the organization, and disseminated it to Asia magazine. KASIKORNBANKGROUP employees, customers, investors, • The ‘Best Corporate Governance’ award was gained shareholders and interested parties. from a survey conducted by FinanceAsia magazine, As performing the business operation under the wherein we received an overall rating among the top three Statement of Good Corporate Governance Principles, businesses in Thailand, and the highest rating of any Thai KASIKORNBANK has strictly adhered to the Statement of bank. Business Conduct, while remaining accountable to the • The ‘Best Investor Relations’ award for 2007 from betterment of society and the environment. The Bank FinanceAsia magazine realizes the Corporate Social Responsibilities (CSR) as • The ‘Best Shareholder Treatment Award’ for 2007, a part of our efforts toward sustainable development. we given at the ‘Shareholder Awards 2007’ ceremony, as organized various CSR activities in 2007 - which can be organized by Thailand Securities Depository Company, categorized into four areas i.e., society, environment, Ltd., in cooperation with the Thai Investors Association, customer and employee - under the CSR policies based Thai Listed Companies Association and the Thai Investor on the following criteria: Relations Club • To strictly adhere to the Statement of Business • As a result of the ‘Corporate Governance Polls 2007’ Conduct, and to participate in social development and conducted by Asiamoney magazine, in the regional awards environment protection. for ‘Best Companies in Asia for Corporate Governance’, • To encourage officers at all levels to strictly abide by KASIKORNBANK was again among the top three finalists; the Code of Conduct and CSR Principles. at the country level of awards, we received six commendations: • To embark on CSR activities for the benefits of all 1. ‘Best Overall for Corporate Governance’ stakeholders. 2. ‘Best for Disclosure and Transparency’ • To arrange workplaces by placing considerable 3. ‘Best for Responsibilities of Management and the emphasis on safety, occupational health, environmental Board of Directors’ concern and facilitation for officers and customers. 4. ‘Best for Shareholders’ Rights and Equitable • To promote environmental preservation. Treatment’ • To avoid credit grants for any projects in contravention 5. ‘Best for Investor Relations’ of the national environmental protection laws. 6. ‘Best Investor Relations Officer’ Because of our firm determination to promote good • Results of an assessment of the KASIKORNBANK corporate governance within KASIKORNBANKGROUP, in AGM for 2007, as carried out by the Securities and 2007, the Bank received numerous awards and mentions Exchange Commission, Thailand (SEC), rated our AGM of merit in recognition of our corporate governance efforts, as ‘Excellent’, with special commendation for exemplary such as: performance in the conducting of our AGM for the second consecutive year.

The Bank received the “Best Shareholder Treatment Award” The Bank was granted the “Corporate Governance Asia Recognition from the Shareholder Awards 2007 and participated in the Awards 2007” from Corporate Governance Asia magazine Shareholders’ Day 2007 event

ANNUAL REPORT 2007 17 2. Operating Performance and Financial Position Analysis

2.1 Operating Performance Operating Performance for 2007 (Units : Million Baht) Change 2007 2006 Million Baht Percent Income from interest and dividends 55,516 51,810 3,706 7.15 Interest expense 18,085 17,197 888 5.16 Net income from interest and dividends 37,431 34,613 2,818 8.14 Bad debts and doubtful accounts 4,290 651 3,639 558.99 Loss on debt restructuring 1,597 4,767 (3,170) (66.50) Non-interest income 18,897 14,155 4,742 33.50 Non-interest expense 29,029 25,561 3,468 13.57 Income tax expense 6,407 4,125 2,282 55.32 Operating profit 27,299 23,207 4,092 17.63 (Before bad debts and doubtful accounts, and income tax expense) Net Income 15,005 13,664 1,341 9.81 Net Income 15,500 15,005 14.00 15,000 (9.81) 9.00 14,500 14,000 13,664 4.00 13,500 -1.00 Net Income (Million Baht) (Million Income Net 13,000 Change(%Y-o-Y) Percent 12,500 (1.91) -6.00 2006 2007 The Bank’s 2007 consolidated net income equaled Baht However, our non-interest expense increased Baht 15,005 million, increasing by Baht 1,341 million, or 9.81 percent, 3,468 million, due mainly to higher expenses on personnel, due to our higher earnings ability in tandem with over-year premises and equipments - which included expenses related increases in both non-interest and net interest and dividend to technological advancements and strategic projects - as well income. Non-interest income for 2007 totaled Baht 18,897 as marketing and public relations expenditures. Furthermore, million, rising by Baht 4,742 million, or 33.50 percent over our income tax expense increased by Baht 2,282 million, 2006, due to higher fee income, gains on exchange and because of the low base of comparison with 2006, when we on investments. Moreover, net interest and dividend income received tax benefits from the liquidation of the Ploy Asset equaled Baht 37,431 million, rising by Baht 2,818 million, Management Company Limited. The Bank’s consolidated or 8.14 percent, due mainly to accelerating loan growth to operating profits (before adjustment for bad debts and doubtful 12.60 percent over-year, beating the 8.02 percent as of accounts, as well as for income tax expense) had increased the end of 2006. As a result, our consolidated net interest by Baht 4,092 million over 2006, equivalent to 17.63 percent margins for 2007 increased to 4.13 percent, being slightly growth over-year. higher than the 4.10 percent for 2006.

18 ANNUAL REPORT 2007 Income Structure (Units : Million Baht) 2007 2006 Change Million Baht Percent Interest and Dividend Income 1. Loans 45,842 42,411 3,431 8.09 1.1 Loans 19,232 17,867 1,365 7.64 1.2 Overdrafts 12,222 11,450 772 6.74 1.3 Bills 14,388 13,094 1,294 9.88 2. Interbank and money market items 3,841 4,487 (646) (14.40) 2.1 Deposits 3,445 3,945 (500) (12.68) 2.2 Loans 317 157 160 101.91 2.3 Securities purchased under resale agreements 79 385 (306) (79.48) 3. Hire purchase and financial leases 1,183 465 718 154.41 4. Investments 4,650 4,447 203 4.56 Total Interest and Dividend Income 55,516 51,810 3,706 7.15 Non-Interest Income 1. Fee and service income 1.1 Acceptances, avals, and guarantees 1,009 811 198 24.41 1.2 Others 12,334 9,827 2,507 25.51 2. Gains on exchange 2,717 1,670 1,047 62.69 3. Other income 2,837 1,847 990 53.60 Total Non-Interest Income 18,897 14,155 4,742 33.50 Total Income 74,413 65,965 8,448 12.81 Diversification of Income

Other Other Income 3.81 % Income 2.80 % Gains on Gains on Exchange 3.65 % Exchange 2.53 % Fee and Service Fee and Service Income 17.93 % Income 16.13 % Income from Income from Invesments 6.25 % 2007 Invesments 6.74 % 2006 Hire Purchase and Hire Purchase and Financial Lease 1.59 % Financial Lease 0.70 % Income from Interbank Income from Interbank and Money Market Item 5.16 % and Money Market Item 6.80 % Income from Income from Loans 61.60 % Loans 64.29 %

ANNUAL REPORT 2007 19 • Net Income from Interest and Dividends The Bank’s 2007 consolidated net interest and dividend income was Baht 37,431 million, rising by Baht 2,818 million, or 8.14 percent, over 2006. Net Income from Interest and Dividends (Units : Million Baht) 2007 2006 Change Million Baht Percent Income from interest and dividends 55,516 51,810 3,706 7.15 • Loans 45,842 42,411 3,431 8.09 • Interbank and money market items 3,841 4,487 (646) (14.40) • Hire purchase and financial leases 1,183 465 718 154.41 • Investments 4,650 4,447 203 4.56 Interest expense 18,085 17,197 888 5.16 Net interest and dividend income 37,431 34,613 2,818 8.14 % Net interest margin (NIM) 4.13 4.10 0.03

The Bank’s consolidated interest and dividend income • Non-interest Income for 2007 amounted to Baht 55,516 million, rising by Baht The Bank’s consolidated non-interest income for 2007 3,706 million, or 7.15 percent, over 2006. This was mainly was Baht 18,897 million, up by Baht 4,742 million, or 33.50 attributable to a Baht 3,431 million increase in net income percent, over 2006. This was mainly the result of increased from loans, equivalent to 8.09 percent growth, due to fee and service income increased by Baht 2,705 million to expanding loans. Interest income from hire purchases and Baht 13,343 million, respectively, driven by growing fees financial leases rose by Baht 718 million while that from on loans, credit card business and deposits. Also, gains investments also rose by Baht 203 million. In the meantime, on exchange were up by Baht 1,047 million and gains on interest expense increased by Baht 888 million as a investments had risen Baht 965 million. consequence of higher deposits placed with the Bank. As our net interest and dividend income improved over-year, • Non-interest Expense following growth in interest and dividend income for 2007 The Bank’s consolidated non-interest expense for that exceeded interest expense, our net interest margins 2007 equaled Baht 29,029 million, rising by Baht 3,468 for 2007 equaled 4.13 percent, rising 0.03 percent over 2006. million, or 13.57 percent, over 2006. This was mainly attributable to higher expenses for personnel, premises • Provisions for Doubtful Accounts and Losses on and equipments - which included expenses related to Debt Restructuring technological advancements and strategic projects - as For 2007, the Bank and subsidiaries set aside well as marketing and public relations expenditures. allowances for doubtful accounts and incurred losses on debt restructuring amounting to Baht 5,887 million, increasing by Baht 469 million over 2006, as a Baht 3,170 million drop in losses on debt restructuring was countered by a Baht 3,639 million increase in allowances for doubtful accounts, along with loan expansion and the changing economic environment.

20 ANNUAL REPORT 2007 2.2 Financial Position Analysis Financial Position (Units : Million Baht) Change Dec. 31, 2007 Dec. 31, 2006 Million Baht Percent Assets 994,518 935,509 59,009 6.31 Liabilities and Shareholders’ Equity - Total liabilities 894,523 847,271 47,252 5.58 - Total shareholders’ equity 99,995 88,238 11,757 13.32 Total Liabilities and Shareholders’ Equity 994,518 935,509 59,009 6.31

• Assets Similarly, the gross NPL ratio to total loans had dropped to As of December 31, 2007, the Bank’s consolidated 4.45 percent at the end of December 2007, down from 6.85 assets totaled Baht 994,518 million, increasing by Baht percent at the end of 2006. 59,009 million, or 6.31 percent, over the Baht 935,509 Other items having significant changes are shown in million at the end of 2006. This was owed mainly to the following : growing loans. As of December 31, 2007, the Bank’s • Interbank and money market items (on the asset side) consolidated loans were Baht 762,505 million, increasing at the end of 2007 were equal to Baht 58,724 million, by Baht 85,298 million, or 12.60 percent, over the Baht falling by Baht 24,118 million, or 29.11 percent, from the 677,207 million recorded at the end of 2006. As the Bank end of 2006. and our Phethai Asset Management Company Limited had • Securities purchased under resale agreements at the sold a combined Baht 11,337 million in non-performing end of 2007 equaled Baht 10,700 million, dropping by Baht loans (NPLs) to external asset management companies in 11,500 million, or 51.80 percent, from the end of 2006. accordance with our policy to reduce NPLs to an appropriate • Net investments at the end of 2007 totaled Baht level, our NPL ratio dropped significantly. As of the end 95,526 million, decreasing by Baht 6,461 million, or 6.33 of December 2007, our net NPL ratio had fallen to 2.29 percent, from the end of 2006. percent, down from the 4.14 percent at the end of 2006.

Loans and Deposits

800,000 762,505 783,822 14.00 750,000 746,260 12.60 12.00 700,000 677,207 10.00 650,000 8.10 8.00 600,000 5.03 6.00 550,000 8.02 4.00 Percent Change (%Y-o-Y) Change Percent Loans & Deposits (Million Baht) (Million Deposits & Loans 500,000 2.00 Dec. 2006 Dec. 2007 Loans Deposits Percent Change in Loans Percent Change in Deposits

ANNUAL REPORT 2007 21 • Liabilities and Shareholders’ Equity • Relationship Between Sources and Uses of Funds The consolidated liabilities of the Bank, as of December As of December 31, 2007, the funding structure as 31, 2007, totaled Baht 894,523 million, rising by Baht shown in the Consolidated Financial Statement comprised 47,251 million, or 5.58 percent, over the end of 2006. Baht 894,522 million in liabilities and Baht 99,995 million in Consolidated liabilities that had changed significantly were: shareholders’ equity, resulting in a debt-to-equity ratio of • Deposits at the end of 2007 equaled Baht 783,822 8.95. The major source of funds on the liabilities side was million, increasing by Baht 37,562 million, or 5.03 percent, deposits, which accounted for 87.62 percent of the total. over the end of 2006. This was due mainly to higher Other sources of funds included interbank and money savings deposits. market items, plus borrowing, which accounted for 1.43 • Borrowing, as of December 31, 2007, amounted to percent and 5.84 percent of the total, respectively. Baht 58,100 million, rising by Baht 7,635 million, or 15.13 The Bank and subsidiaries’ major use of funds was percent, over the end of 2006. This was mainly attributable loans. As of December 31, 2007, loans amounted to Baht to an increase in our short-term borrowing, accompanying 762,505 million, resulting in a loan-to-deposit ratio of 97.28 issuances of short-term bills of exchange. So doing not percent. With the remaining liquidity, the Bank invested in only helped the Bank enhance the variety and flexibility in various liquid assets such as interbank and money market our funding structure, but also broadened the investment items, securities purchased under resale agreements and alternatives available to the public and the Bank’s customers. investments in securities. • Interbank and money market items (on the liabilities The major sources and uses of funds as of the end of 2007 side) were Baht 14,185 million at the end of 2007, down by are categorized by contractual maturity periods shown in Baht 3,504 million, or 19.81 percent from the 2006 year-end. the following table : As of December 31, 2007, total consolidated shareholders’ equity was Baht 99,995 million, rising by Baht 11,757 million, or 13.32 percent, over the end of 2006, due to our profit during 2007. The Bank and Subsidiaries’ Major Source and Use of Funds (Units : Million Baht) Deposits Loans Period Dec. 31, 2007 Percent Dec. 31, 2006 Percent Dec. 31, 2007 Percent Dec. 31, 2006 Percent ≤ 1 year 781,963 99.76 743,380 99.61 453,108 59.33 429,598 63.27 > 1 year 1,859 0.24 2,880 0.39 310,660 40.67 249,421 36.73 Total 783,822 100.00 746,260 100.00 763,768 100.00 679,019 100.00 Note : Details of deposits and loans appear in the item, “Liquidity Risk Management”, in the Analysis of Remaining Maturity of Assets and Liabilities.

The Bank and subsidiaries’ deposits with remaining 23,510 million, or 5.47 percent, over the Baht 429,598 maturities of less than or equal to 1 year at the end of million at the end of 2006. Loans with remaining maturities 2007 totaled Baht 781,963 million, increasing by Baht of over 1 year amounted to Baht 310,660 million, 38,583 million, or 5.19 percent, over the Baht 743,380 increasing by Baht 61,239 million, or 24.55 percent, million at the end of 2006. Deposits with remaining over the Baht 249,421 million at the end of 2006. maturities of over 1 year at the end of 2007 were Baht From the above table, it can be seen that, as of 1,859 million, decreasing by Baht 1,021 million, or December 31, 2007, deposits with remaining maturities 35.45 percent, from the Baht 2,880 million at the end of 2006. of less than or equal to 1 year were larger than loans At the end of 2007, the Bank and subsidiaries had with remaining maturities of less than or equal to 1 year. loans with remaining maturities of less than or equal This is considered normal for commercial banks in to 1 year totaling Baht 453,108 million, rising by Baht Thailand, as they normally fund their lending or investments

22 ANNUAL REPORT 2007 in long-term assets from short-term liabilities. However, commercial banks to offer bills of exchange to borrow since most deposits are renewed upon maturity, it is money from the private sector, effective August 2006. considered likely that they will remain with the Bank longer than their stated contractual term, thereby helping • Investments to support funding for the Bank’s lending. The Bank’s and subsidiaries’ investments consist In order to promote greater flexibility and variety in of trading investments, available-for-sale investments, the Bank’s funding structure, as well as to provide debt instruments held to maturity, and investments more alternatives in investments for the public and in subsidiary and associated companies. A review of the Bank’s depositors, the Bank issued Short-Term these investments is carried out when there is a factor, Debenture Projects 1/2005, 2/2005 and 2/2006, with a as cited in accounting standards, indicating that an total value of Baht 14,078 million at the end of 2007. investment might have become impaired. Investments, Moreover, “K-B/E Investment” products were also put as of December 31, 2007, classified by type, are shown on the market, after the BOT granted permission for in the table below: Investments (Units : Million Baht) Type of Investment Dec. 31, 2007 Percent Sep. 30, 2007 Percent Dec. 31, 2006 Percent Debt Instruments 91,333 95.61 99,233 95.51 97,217 95.32 Government and State Enterprise Securities • Trading investments 1,823 1.91 11,007 10.59 6,124 6.00 • Available-for-sale investments 59,673 62.47 49,371 47.52 44,154 43.29 • Held-to-maturity investments 7,998 8.37 8,025 7.72 11,125 10.91 Private Enterprise Debt Instruments • Trading investments 1,339 1.40 1,021 0.98 493 0.48 • Available-for-sale investments 966 1.01 639 0.62 1,436 1.41 • Held-to-maturity investments 911 0.95 911 0.88 980 0.96 Foreign Debt Instruments • Available-for-sale investments 16,833 17.62 26,374 25.38 29,842 29.26 • Held-to-maturity investments 1,790 1.87 1,885 1.81 3,063 3.00 Equity Securities 4,193 4.39 4,666 4.49 4,770 4.68 Trading Investments 335 0.35 288 0.28 242 0.24 Available-for-sale Investments 859 0.90 976 0.94 814 0.80 General Investments 2,410 2.60 2,813 2.71 3,231 3.17 Investments in Subsidiary and Associated Companies 589 0.62 589 0.57 483 0.47 Total Investments - Net 95,526 100.00 103,899 100.00 101,987 100.00

ANNUAL REPORT 2007 23 • Liquidity • Net cash payables in financial activities totaled Baht Cash and cash equivalents, according to the Bank’s 5,573 million, due mainly to our dividend payments. consolidated financial statements at the end of 2007, totaled Baht 18,051 million, increasing by Baht 360 million over the • Capital Expenditures end of 2006, as a result of the following elements: To enhance efficiency in service, during 2007, the Bank’s • Net cash receivables from business operations totaled capital expenditures were used primarily for advancements Baht 6,770 million, as a result of changes in key operating in information technology (IT), totaling Baht 3,902 million. assets and liabilities. Interbank and money market items Capital expenditures on other fixed assets totaled Baht (on the asset side) decreased by Baht 24,122 million. Likewise, 1,867 million. securities purchased under resale agreements dropped by Baht 11,500 million. Loans rose by Baht 102,288 million, and 2.3 Capital Requirements and Credit Ratings deposits increased by Baht 37,562 million. Interbank and money market items (on the liabilities side) dropped by Baht • Capital Funds 3,504 million, in contrast to short-term borrowings, which As of December 31, 2007, the Bank and subsidiary showed an increase of Baht 9,649 million. companies had a capital base of Baht 112,533 million, • Net cash payables in investment transactions were comprising Tier-1 capital totaling Baht 82,717 million, and Baht 1,557 million. This amount is composed of cash received Tier-2 capital totaling Baht 29,816 million. The capital from the disposal of available-for-sale investments totaling adequacy ratio of the Bank and Phethai AMC together Baht 96,825 million, as well as cash received from the equaled 14.62 percent, significantly above the BOT’s minimum redemption of held-to-maturity debt instruments totaling Baht requirement of 8.50 percent. Details of the capital adequacy 4,642 million. Also, there were payments in cash on available- ratio of the Bank and our AMC are shown in the following for-sale investments of Baht 97,453 million, premises and table: equipments of Baht 3,552 million, as well as intangible assets of Baht 2,580 million. Capital Adequacy Ratio * (Units : Percent) Capital Funds ** Dec. 31, 2007 Sep. 30, 2007 Jun. 30, 2007 Mar. 31, 2007 Dec. 31, 2006 Tier-1 Capital 10.74 10.97 10.48 10.25 10.46 Tier-2 Capital 3.87 3.85 4.02 4.18 4.29 Total Capital Requirements 14.62 14.82 14.50 14.43 14.74 Note: * These ratios do not include the net profits of each accounting period. According to BOT regulations, the net profit of the first half of the year shall be included in the institution’s capital after approval by the Bank’s Board of Directors. The net profit for the second half of the year shall be included in that capital after approval by a General Meeting of Shareholders. However, if there is a net loss, the loss must be deducted from capital immediately. ** Based on the risk assets of the Bank and our AMC. Capital Adequacy Ratio (Including the net profit of each accounting period) (Units : Percent) Capital Funds Dec. 31, 2007 Sep. 30, 2007 Jun. 30, 2007 Mar. 31, 2007 Dec. 31, 2006 Tier-1 Capital 11.67 11.44 11.62 11.76 11.41 Tier-2 Capital 3.87 3.85 4.02 4.19 4.29 Total Capital Requirements 15.54 15.29 15.64 15.95 15.70

24 ANNUAL REPORT 2007 • Maintenance of Ratios • Credit Ratings The Bank maintains liquid assets, on average, of at In 2007, Moody’s Investors Service raised the Bank’s least 6.00 percent of deposits and some kinds of borrowing, Long-Term Subordinated Debt Rating from Baa2 to Baa1 in compliance with BOT regulations. As of December 31, 2007, with a stable outlook. Meanwhile, the Bank’s credit ratings the Bank had cash in hand, cash at central cash centers, given by Standard & Poor’s and Fitch Ratings remained deposits with the BOT and eligible securities totaling Baht unchanged from the end of December 2006. Details are 126,790 million. shown in the following table: KASIKORNBANK’s Credit Ratings Credit Rating Agencies December 31, 2007 December 31, 2006 Moody’s Investors Service *** Long-term - Debt n.a.* n.a.* - Subordinated Debt Baa1 Baa2 - Deposits Baa1** Baa1** Short-term - Debt/Deposits P-2 P-2 Outlook Stable Stable Bank Financial Strength Rating (BFSR) D+ D+ Outlook for BFSR Stable Stable Standard & Poor’s *** Long-term - Debt BBB BBB - Subordinated Debt BBB- BBB- Bank Fundamental Strength Rating (BFSR) C C Short-term - Debt/Deposits A-2 A-2 Outlook Stable Stable Fitch Ratings *** International credit ratings Long-term - Debt BBB+ BBB+ - Subordinated Debt BBB BBB Individual C C Support 2 2 Short-term - Debt/Deposits F2 F2 Outlook Stable Stable National credit ratings Long-term - Debt AA(tha) AA(tha) - Subordinated Debt AA-(tha) AA-(tha) Short-term - Debt/Deposits F1+(tha) F1+(tha) Outlook Stable Stable

Note: * Moody’s Investors Service does not assign ratings to the Bank’s long-term debt. ** Long-term deposits are rated only by Moody’s Investors Service. *** The base levels for investment grade on long-term credit ratings for Moody’s Investors Service, Standard & Poor’s, and Fitch Ratings are Baa3, BBB- and BBB-, respectively. For short-term credit ratings, the base levels for investment grade as viewed by these three agencies are P-3, A-3, and F3, respectively.

ANNUAL REPORT 2007 25 3. Operations of Core Businesses Customer Segment • Multi-Corporate Business 3.1 Business Overview Overview This unit provides sophisticated financial products and Facing challenges throughout 2007 from cooling domestic services for the multi-corporate segment and investment spending on consumption and investment, political uncertainty, project customers with sales volumes over Baht 5,000 million as well as heightened competition, the Bank not only adjusted per annum. To meet this group of customers’ complex financial our business plans and strategies, but new products and needs, the Bank offers comprehensive financial solutions services were also developed and launched to better meet specifically designed for each customer. In addition, closer our customers’ needs amid this challenging operating alliances with customers have been forged through the Bank’s environment. offering of innovative products and services such as our “K-Supply Chain Financing” and “Trade Innovation” products. 3.2 Corporate Business Operations Changes in the Operating Environment and Business Operations The Bank’s Corporate Business Operations provide In 2007, the Thai economy experienced a slowdown services to corporate customers with sales volumes over caused by deteriorating consumer and business sentiment Baht 400 million per annum. Services are provided through as a result of political uncertainty, unrest in the three southern the Multi-Corporate Business segment, serving large-scale border provinces, rising oil prices and the stronger Baht. corporate customers; and the Large Corporate Business These adverse factors affected customer demand for bank segment, serving medium-sized corporate customers. Our loans, especially in the first half of the year, while competition aim is to provide services that truly match the needs of among banks for this group of customers remained as customers in all segments, in the most effective manner. intense as ever. Corporate Business Operations’ main products include Despite the economic slowdown, certain industries domestic credit products, letters of indemnity-borrowing, continued to have satisfactory growth, particularly those trade finance, cash management, plus securities and receiving promotional privileges from the Board of Investment bancassurance services. (BOI). Subsequently, we have shifted our focus to these BOI-promoted industries and others with long-term • Business Operations in 2007 competitiveness. In serving industries without BOI promotional The Bank’s Corporate Business Operations during 2007, privileges and industries with diminishing competitiveness, classified by customer segment and product group, are emphasis has been placed on providing a wider range of summarized in the following: products and services that meet their needs, especially in the area of risk management, which are offered in addition to our core corporate financing products.

A seminar on “Family Business on Stage” Grand opening of the Trade Innovation Project

26 ANNUAL REPORT 2007 Moreover, in the area of product development, the Bank’s Product Groups products and services have been based on extensive studies • Domestic Credit Products and conducted to ensure that we understand our customers’ Letters of Indemnity-Borrowing businesses and their financial needs. This information has Overview also been passed on to our relationship managers, enabling Domestic credit products are divided into two categories: them to provide more professional service to our customers. working capital finance, such as overdrafts and promissory Meanwhile, the Bank continues to cultivate close relationships notes; and investment capital finance of various types. The with our customers by arranging events and activities, Bank also offers several contingent bank guarantee products, particularly seminars on a wide range of topics in business such as letters of indemnity-borrowing, avals, letters of and management. Due to our tireless efforts, we have been guarantee on loans and financial statements. able to retain our customer base and enjoy continued growth Changes in the Operating Environment and in income, particularly fee-based income, from this segment Business Operations of customers. Despite numerous negative factors hurting the economy • Large Corporate Business in 2007, the Bank was able to maintain growth in domestic Overview credit products, while interest and fee income on letters of Customers in this segment are medium-sized corporate indemnity also met targets. This success was attributable to entities with sales volumes between Baht 400 - 5,000 million our ceaseless efforts toward upgrading the Bank’s products per annum, for which the Bank has devised specialized and services, as well as operational procedures. Noteworthy services such as capital financing services that include a progress was made in the first half of 2007 on promissory complete range of loan facilities such as working capital notes (P/N), which can now be prepared in a variety of formats. financing, capital expenditure loans, project financing loans Also, customers now have more flexibility in choosing terms and trade finance. Other financial services include cash of payment on advance fees for letters of indemnity on bid management, our “Trade Innovation” products and “K-Supply bonds. We also introduced a new credit facility for customers Chain Financing”. with good credit records wishing to refinance their loans from Changes in the Operating Environment and other financial institutions with us by providing a credit line Business Operations facility before the transfer of collateral. Meanwhile, after the Amid economic uncertainties during 2007, we put our launch of the “K-Supply Chain Financing” overdraft product focus on lending to industries that are continuing to grow provided via electronic channels in the first half of 2007, we and move forward with their investment plans, such as the introduced a “Purchasing Card” service in the second half electronics, automotive, pulp and paper, hardware and of the year as an additional channel to further facilitate construction, and agriculture industries. As for industries facing transactions between buyers and sellers. We also launched difficulty from competition, such as garments and footwear, a report service for letters of indemnity-borrowing, providing emphasis has been placed on providing advisory services essential information on a monthly basis to facilitate customers’ and financial solutions that meet their needs. business operations. At the same time, this report service Meanwhile, the Bank continues to foster close relationships also relieves our staff of some of their workload, thus helping with our customers by arranging various campaigns and events. them to focus on other tasks more effectively. Of note were our campaigns aimed at enhancing customers’ As for internal operational development, an office knowledge of financial and business matters, particularly for directly responsible for centralized service and corporate customers in the rice milling and hotel businesses. Events customer relationships was set up. Operational procedures and seminars on health-related issues, which are topics of have also been made more flexible for credit products with interest for this group of customers, were also held. Our efforts multiple interest rate benchmarks, such as THBFIX-based have resulted in continued growth in interest and fee-based loans and syndicated loans. These operational changes not revenues from this segment of customers. only reduce errors and raise the productivity of our staff, but

ANNUAL REPORT 2007 27 they are also a crucial part of our efforts to offer products that 2. International Trade Services Offices are nationwide satisfy the complex financial needs of large-scale corporate service outlets that enable us to better serve customers. In customers. 2007, twenty new International Trade Services Offices were • Trade Finance put into service, bringing the sum to forty by the year-end Overview of 2007. Trade finance offers many types of import and export 3. K-Trade Connect provides services covering international services, such as letters of credit (L/C), bills for collection, trade transactions, as well as facilitating distribution of trade- trust receipts, international fund remittances plus the exchange related documents via electronic channels without the of foreign currencies, etc. customers having to visit our International Trade Services Changes in the Operating Environment and Offices. After a soft launch in the third quarter, customers Business Operations have responded enthusiastically to this new service channel, Despite the fallout from the U.S. sub-prime mortgage as evidenced by a large number of applications for the crisis and drops in the U.S. Dollar, Thailand’s international service, while transactions through this channel totaled trade continued to expand satisfactorily in 2007, providing Baht 2,700 million at the year-end of 2007. a vital push for economic growth. Meanwhile, the Bank’s For 2008, we aim to further expand our service capability international trade volume continued to expand satisfactorily by opening fifteen to twenty new International Trade Services in 2007 with growth of 8.82 percent over the same period Offices nationwide, while the full launch of the “K-Trade of last year, due primarily to export transactions. Also of Connect” channel is expected to be completed by the end note, our total trade transactions in 2007 exceeded Baht 1 of the first quarter of 2008, which will likely result in a much trillion for the second consecutive year. This success was higher volume of trade-finance transactions through this a testament to our commitment to product and service channel in the future. Furthermore, we are in the process development with customers’ needs in mind. A notable of introducing knowledge and skill enhancement programs development was our “Trade Innovation” services launched in the area of international business management for our in the second quarter as part of our “K-International Trade”, corporate customers. Of note is the “Trade Knowledge Club”, consolidating trade finance services that can be accessed which will equip customers with important information on via three main channels, including: industries, changes in relevant regulations regarding 1. Trade Service Specialists who serve as personal trade international business operations, and tips on how to benefit finance managers for our customers. A trade service specialist from free-trade agreements. Also being planned is a logistics is assigned to each customer, through whom they can inquire management training program, which we believe should about the Bank’s wide range of services and products, and prove valuable to our customers in their international trade other information. operations.

International Trade Service Office, Phahon Yothin Business Banking Center, Phahon Yothin

28 ANNUAL REPORT 2007 • Cash Management also provides support services for syndicated loans, such Overview as acting as a security agent for collateral control, a credit Cash management services provide an efficient, facility agent and a bondholder representative. effective, end-to-end working capital solution covering Changes in the Operating Environment and collection management, payment management and liquidity Business Operations management services, as well as other services, with the aim In 2007, the Bank witnessed continued growth in our of helping our customers increase returns on their excess securities services. In particular, our mutual fund supervisory cash flows. All of these services are provided with the clear services recorded strong growth due to the expansion of our objective of encouraging target customers to choose the customer base, as well as growth from Foreign Investment Bank as their main bank for cash management transactions. Funds (FIF) following support from the authorities. As a Changes in the Operating Environment and result, we were able to retain our leadership position with a Business Operations market share in mutual fund supervisory services of 27.60 As the Bank has placed great importance on being percent of the total mutual fund NAV as of December 2007. able to provide ‘Total Financial Solutions’ that respond Meanwhile, the Bank’s custodial services for provident to all the financial needs of our customers, in 2007, we funds also grew well, as our asset management customers undertook in-depth studies of our customers to better have expanded their business into provident funds. understand their current needs, categorizing them by specific Consequently, we were able to maintain our leadership industry and customer segment. This was done to seek a position in this custodial business, with a market share of better understanding of our customers’ transaction and 29.53 percent of the total mutual fund NAV as of December liquidity management. Findings from these research studies 2007. In the meantime, custodial services for private funds are being used to strengthen and upgrade our business also registered strong growth due to the launch of new private solutions specific to particular industries before making funds by KASIKORN ASSET MANAGEMENT CO., LTD., and general introductions of these refined products and services new customers served by our Private Wealth Management to targeted customers. An example of this is our ‘K-Privileged Department. Trade Solutions’ designed to satisfy importers who primarily serve the domestic market. In addition, we offer a product bundled between our card-accepting merchant and inward remittance products, for our customers in the hotel industry. Aside from this, in order to improve the efficiency of our after-sale services, we had opened an additional twenty Cash Management Sales and Service Centers nationwide by the end of 2007. Furthermore, preparations have been made for a new payment platform developed by National ITMX Co., Ltd., replacing the existing BOT payment system. Due to our dedication to cash management services, the Bank was honored with the “2007 Triple A Best Domestic Cash Management Award” by The Asset magazine, praising our efficient management of customers’ short-term cash flows and effective services to meet their needs during 2006. • Securities Services Overview Securities services consist of custodial services for mutual funds, provident funds and private funds for domestic and foreign individual or juristic persons, plus registrar services for bonds, securities and unit trusts. The Bank K-Privileged Trade Solutions

ANNUAL REPORT 2007 29 At the same time, our registrar services for unit trusts In addition, great emphasis has been placed on the and debentures continued to grow due to the launches of upgrading of our service procedures. In particular, in-depth new mutual funds by KASIKORN ASSET MANAGEMENT research studies on customers’ needs were conducted, and CO., LTD. As for our agency services - in which the Bank the information has been used to improve our insurance operates as a syndicated loan agency, as well as a collateral capabilities provided in cooperation with our Preferred agency for syndicated loan programs, and as a bondholder partners. All of this is done with the aim of being able to representative – we have been able to retain our customer provide services that meet customers’ needs in the most base despite ongoing political uncertainty, which has affected efficient and effective manner. new customer growth. Meanwhile, 2007 growth was also attributed to our success in providing syndicated loans to many large projects. All of these efforts have thus helped us to maintain our leadership position in agency services, resulting in the Bank’s fee income in 2007 growing 18.82 percent over the previous year. For 2008, we plan to expand our customer base for both custodial and mutual fund supervisory services. In particular, we believe that our know-how and expertise in foreign investment funds, especially concerning regulations and operational procedures, should prove to be a valuable asset to the Bank’s marketing efforts in presenting these services to potential customers. • Bancassurance Services Overview Bancassurance services provide credit insurance products to the Bank’s customers, in addition to a wide range of life insurance products for both individuals and business customer employees as group plans, as well as non-life insurance products for property and export protection. Changes in the Operating Environment and Business Operations In 2007, the Bank launched several new bundled product packages offering conventional banking products along with life insurance products. For example, in the first half of 2007, the Bank introduced three credit insurance products, including our “Perfect Business Plus”, “Perfect Business Growth” and “Perfect Business Secure” products. At the same time, we also launched the “Perfect Business Confidence” product as an attractive alternative for customers using short-term credit facilities. In the second half of 2007, to better serve our larger- scale business customers, we increased life insurance coverage in our credit insurance products. In addition, in cooperation with non-life insurance alliance partners, the Bank rolled out new non-life insurance products tailor-made for specific businesses such as the hotel business.

30 ANNUAL REPORT 2007 • Financial Position The Bank’s corporate business loans - classified by customer segment and product group as of December 31, 2007, and compared to the end of 2006 - are shown as in the following table: Corporate Business Loans Classified by Customer Segment * (Units : Million Baht) Percent of Loans Change Total Corporate Business Loans Dec. 31, 2007 Dec. 31, 2006** Million Baht Percent Corporate Business Loans 100.00 253,207 238,341 14,866 6.24 Customer Segment Multi-Corporate Business 42.86 108,529 100,494 8,035 8.00 Large Corporate Business 57.14 144,678 137,847 6,831 4.96

Note: * Revised by excluding loans of property funds. ** Revised to reflect regrouped customers. As of the end of December 2007, total corporate business loans under the supervision of the Corporate Business Division equaled Baht 253,207 million, increasing by Baht 14,866 million, or 6.24 percent, over the end of 2006. Loan growth was seen in both the Multi-Corporate Business and Large Corporate Business segments, particularly in energy, financial institutions (excluding the hire purchases and financial lease sector), general hardware and construction material businesses. Corporate Business Loans Classified by Product Group * (Units : Million Baht) Percent of Loans Change Total Corporate Business Loans Dec. 31, 2007 Dec. 31, 2006** Million Baht Percent Corporate Business Loans 100.00 253,207 238,341 14,866 6.24 Product Group Domestic Credit Products 75.16 190,309 180,970 9,339 5.16 Trade Finance 24.72 62,594 56,493 6,101 10.80 BIBF 0.12 304 878 (574) (65.34)

Note: * Revised by excluding loans of property funds. ** Revised to reflect regrouped customers. Categorized by product group, as of the end of December 2007, domestic credit products showed the largest loan extension of Baht 9,339 million over the end of 2006. However, in terms of percent change, trade finance loans enjoyed the highest growth of 10.80 percent, followed by the 5.16 percent expansion rate in domestic credit product loans.

ANNUAL REPORT 2007 31 3.3 SME Business Operations and international uncertainties. Among those negative forces were rising oil prices, the prolonged sub-prime mortgage debt Provides services to SME customers with sales volumes crisis in the U.S., plus a softening U.S. Dollar that caused of Baht 400 million or less per annum. With the help of our commercial banks to revise their loan growth targets downward. end-to-end financial solutions covering credit, cash management, Amid already tight credit markets, the SME credit business electronic banking and fund transfers, the Bank is confident has experienced stiff competition that is getting more intense that our SME customers will be able to conduct their businesses over time. more efficiently, paving the way for their future growth. Therefore, in order to remain competitive amid those negative factors, and to maintain our place as a market • Business Operations in 2007 leader, the Bank in 2007 regularly undertook the development The Bank’s SME Business Operations during 2007, of new products and services to better respond to customer classified by customer segment and product group, are needs. In cooperation with the National Innovation Agency, summarized in the following: we developed the “K-Innovation Fund”, to provide financial Customer Segment support with special interest rate features to entrepreneurs • Small and Medium Business and help them bring new innovations to fruition. We also Overview worked with the Japan Bank for International Cooperation The Bank provides comprehensive financial solutions to start the “K-J Related Credit” program to offer long-term to Small and Medium Business customers with sales credit to Thai businesses that have joint business or cooperative volumes of Baht 10-400 million per annum. The Bank relationships with Japanese entities. We went on various offers end-to-end, reasonably priced, easy-to-understand marketing activities to introduce our products and services and easy-to-apply product packages suitable to this group to the market and expand our customer base, as well as of customers, whose needs are not as complex as those of enhance our already cordial relationships with existing larger corporate customers. customers. We also developed “K SME Care” to financially Changes in the Operating Environment and support and encourage entrepreneurs for their sustainable Business Operations business growth. Even tough Thai commercial banks began reducing their • Micro Business lending rates in line with the Bank of Thailand’s easing of Overview their policy interest rate several times during the first half of This group of customers has sales volumes below Baht 2007, and despite the Thai economy beginning to show signs 10 million per annum. They often include single-owner of recovery along with greater political clarity in the second businesses and family-owned businesses with financial needs half of the year, credit extension to medium and small mainly for their daily transactions. In meeting these needs, enterprises by Thai commercial banks was impacted by we provide comprehensive financial product packages, adverse economic conditions due to numerous domestic including deposits, fund transfers, credit facilities, plus hire purchase and leasing services.

KBank’s CEO announcing a cooperation with the Japan Bank KBank participating in “Good Innovation…Zero Interest”, for International Cooperation (JBIC) a project of the National Innovation Agency

32 ANNUAL REPORT 2007 Changes in the Operating Environment and Emphasis has been placed on clean loans which better suit Business Operations the needs of SME customers, while several contingent bank We have placed great emphasis on being able to guarantee products have also been offered. effectively respond to our customers’ needs and support their Changes in the Operating Environment and sustainable business growth. We therefore offer to them Business Operations financial products and services that are easy to understand, To meet financial needs of SME businesses, the Bank convenient, and delivered quickly and that satisfy their needs launched several new products in 2007. Of note was our for complete financial solutions. Aside from fielding a staff “K-P/O & Invoice Financing”, which integrates collection, of expert specialists to provide business advice to our payment and credit services into a comprehensive service customers about our products and services that match their solution for better liquidity and cost management. Also needs, the Bank is also making a significant effort to better launched was our “K-Investment Backed Credit”, which understand this customer segment through research allows customers to use their investments with KASIKORN conducted on customer sub-segments. We have also taken ASSET MANAGEMENT CO., LTD. as collateral on loan into consultation our local-level personnel to discuss with applications. In addition, we introduced the “K-Machine them the requirements of our customers in their immediate Fund” and “K-Flexible Term Loan” to meet customers’ service areas, in order to find ways to serve all our customers more exacting needs. better. The Bank has opened several channels - e.g., through To better serve customers in the medium business websites and during arrangement of our marketing activities - segment, we have also developed a multi-purpose line of for customers to offer and exchange opinions about the credit (MPLC) product, which is a working capital facility Bank’s service; this ‘open door’ policy offers us room for allowing customers to alter the proportions of various types thought on how best to improve our products and services. of credit lines. This product also features a reserve credit line Special sales and marketing activities have been continuously for the emergency needs of SME businesses. organized as part of our Mass Marketing strategies to reach We also launched a new “K-SME Credit” product in new customers and improve upon our relationships with which customers are able to apply for credit lines of up to current patrons. Baht 10 million and be approved within three working days, as well as receive their loans within 10 working days after Product Groups the necessary application and collateral documents are • Domestic Credit Products and Letters of processed and approved. In addition, we have offered Indemnity-Borrowing “K-100% Credit”, which is a credit facility - either as a term loan Overview or an overdraft facility - providing 100% of the customer’s Domestic credit products are divided into two categories: collateral value. As for our “K-Max” product, which offers working capital finance, such as overdrafts and promissory credit lines exceeding the customer’s collateral value, we notes; and investment capital finance of various types. have adjusted the minimum income criterion and credit limits

A new product opening: K-100% Credit A seminar for SME customers nationwide

ANNUAL REPORT 2007 33 in order to better serve our customers in the micro business Changes in the Operating Environment and segment. Business Operations In the area of marketing activities, the Bank launched Due to our unwavering commitment to product and several campaigns in 2007, including our “New Branch, New service development, the Bank was awarded “World’s Best Loan” project with the aim of introducing potential customers Trade Finance Provider 2008” by Global Finance magazine. to our new branches and credit products and services. Also This award is a testament to our banking service excellence, launched was the “Loan Plus III” product, in which new credit particularly in trade finance. Meanwhile, in 2007 we also lines are offered to customers who are close to finishing their introduced the “K-Privileged Trade Solutions”, which is a existing loan repayments, without having to prepare a new trade finance facility equipped with additional credit lines not loan application or redo collateral appraisal. In promoting our requiring collateral or personal guarantees. “K-100% Credit” product, various marketing and promotional In addition, through the launch of our “Trade Innovation” campaigns have been organized, including door-to-door project, the Bank has revolutionized our trade finance services, campaigns, campaigns providing credit customers with health which are now offered via a variety of channels staffed by insurance products and campaigns promoting the use of our trade service specialists, plus many more international trade overdraft products. All of these campaigns were carried out service offices, in addition to our “K-Trade Connect” electronic in addition to various advisory seminars organized for the SME channel. customer segment throughout the year. In cooperation with our Preferred partners, progress • Trade Finance was made on our “K SME Care” services during 2007, as Overview follows: Trade finance offers many types of import and export 1. C: Capital. KHAO KLA VENTURE CAPITAL services, such as letters of credit (L/C), bills for collection, MANAGEMENT CO., LTD., a 100-percent owned subsidiary trust receipts, international fund remittances and the exchange of KASIKORN ASSET MANAGEMENT CO., LTD., was of foreign currencies. established in 2007. This venture capital management company has received funding from the Bank for setting up and managing the “K-SME Venture Capital Fund” as an alternative funding channel for SME businesses.

The K-SME Credit product launch The Bank launching the K-Max product

34 ANNUAL REPORT 2007 2. A: Advice. In cooperation with the Institute for Small and Medium Enterprise Development (ISMED), the Bank has provided “Business Competitiveness Diagnosis” advisory services for thirty SMEs in 2007. Also, with Kenan Institute Asia (KIAsia), we provided a Logistics and Supply-chain Management Consulting Program for fifteen SMEs. 3. R: Research. In cooperation with KASIKORN RESEARCH CENTER CO., LTD., we have provided “K-SME Analysis” to help SMEs in their decision making and risk management. The Bank also publishes “The Key”, which is a handbook on SME business operations, in addition to publishing two issues of SME Inspired magazine in 2007. A website, www.ksmecare.com, was also set up to further support SME business operations. All of these efforts have been made with the aim of equipping our current and potential SME customers with up-to-date knowledge to help them conduct their businesses. 4. E: Education. With the SME Incubation Business Center of the Faculty of Commerce and Accountancy, Chulalongkorn University, the Bank offered three training sessions on sustainable business management for SMEs in 2007. These training programs drew great interest from SMEs, with altogether 1,095 SME business operators from all parts of the country receiving certificates from the program. In addition, the Bank has held seminars on brand building in Bangkok and Khonkaen, with more than 700 guests participating in those events. For 2008, we aim to strengthen and expand our “K SME Care” services to ensure that our customers receive comprehensive solutions that not only meet their financial needs, but also help them to operate their SME businesses effectively.

The Bank’s venture capital project, investing up to 50% of Certificate granting ceremony of the K SME Care project an SME’s registered capital

ANNUAL REPORT 2007 35 • Financial Position The Bank’s SME business loan position - classified by customer segment and product group as of December 31, 2007, and compared to the end of 2006 - is shown as in the following table: SME Business Loans Classified by Customer Segment (Units : Million Baht) Percent of Total Loans Change SME Business Loans Dec. 31, 2007 Dec. 31, 2006** Million Baht Percent SME Business Loans 100.00 304,061 254,314 49,747 19.56 Customer Segment Small and Medium Business 89.53 272,226 222,982 49,244 22.08 Micro Business 10.47 31,835 31,333 502 1.60

Note: * Revised to reflect regrouped customers. As of the end of December 2007, SME business loans, as supervised by the SME Business Division, totaled Baht 304,061 million, rising by Baht 49,747 million, or 19.56 percent, over the end of 2006. This was mainly due to loan growth in the Small and Medium Business segment, particularly in the construction, agri-processing and agricultural industries. SME Business Loans Classified by Product Group (Units : Million Baht) Percent of Total Loans Change SME Business Loans Dec. 31, 2007 Dec. 31, 2006* Million Baht Percent SME Business Loans 100.00 304,061 254,314 49,747 19.56 Product Group Domestic credit Products 93.75 285,062 241,100 43,962 18.23 Trade Finance 6.25 18,999 13,214 5,785 43.78

Note: * Revised to reflect regrouped customers. Categorized by product group, as of the end of December 2007, domestic credit products reported the highest loan extension totaling Baht 43,962 million over the end of 2006. However, in terms of percent change, trade finance loans enjoyed the highest growth of 43.78 percent, followed by the 18.23 percent expansion rate in domestic credit product loans.

3.4 Retail Business Operations service). Through various sales and service channels, we have initiated and developed a wide range of products and The Bank’s Retail Business Division provides services services for each customer segment. specifically to retail customers. As we wish to provide the highest quality in products and services to effectively fit each • Business Operations in 2007 customer’s differing financial needs, we therefore divide our The Bank’s progress in product and service developments retail customers into three groups: Signature customers (who during 2007, identified by customer segment, product group, have high income, or have entrusted KASIKORNBANKGROUP and sales and service channel, is included in the following: to manage their high-value investments and deposits), Middle Customer Segment Income customers (such as those employed in the public or • Signature private sectors with regular incomes), and Mass customers As competition has been heightening among commercial (who typically need conventional financial products and swift banks and more attention has been given to this customer

36 ANNUAL REPORT 2007 segment in 2007, we have therefore placed great emphasis • Mass on offering products and services that best fit this customer Due to the large size of this segment, we have utilized segment, particularly investments and wealth enhancement the latest technological advancements for faster and more services. For example, in cooperation with KASIKORN ASSET convenient service. More frequent use of electronic cards and MANAGEMENT CO., LTD., the Bank offers many products, service channels has been encouraged. Meanwhile, research including mutual funds and equity securities, coupled with on the day-to-day lifestyle behavior of targeted Mass segment an “Investment Clinic” service in which customers receive customers was conducted, with the result of this research advisory services from investment specialists. Furthermore, being used to construct a business model and design a KBank Visa Platinum Signature credit cards are offered to complete range of products and services that best fit the this group of customers, in addition to other value-added demand of this customer segment while being easy for our activities - such as arranging seminars on investments, staff to understand. The Bank also made improvements in economic conditions and retirement plans, together with a our public relations activities to attract more customers, while subscription to the Bank’s Wisdom of Wealth magazine. marketing activities were regularly offered, including those Moreover, the number of our “Signature Exclusive Centers” promoting the use of our K-mBanking service, and fund was increased to five during the year, while “Signature Corners” transfers through our K-Cyber Banking service. were also expanded to five. A “Signature Smart Queue” system has been installed at our branches to offer faster Product Group service and greater convenience for Signature customers. • Consumer Loans • Middle Income Overview In order to maintain our market share amid intense In meeting the varied financial needs of our competition in this customer segment, which is important customers, the Bank has developed and offers a full in terms of business volume and the number of customers, spectrum of consumer loan products, covering housing the Bank continued to introduce KASIKORNBANKGROUP loans and personal loans; in addition, our service quality Product Packages to meet customers’ varying needs based has been continuously improved. In addition to these on age and other characteristics. In the meantime, product efforts, complete information on homes and home loans is cross-selling via telemarketing channels has been pursued. also provided through the “K Home Smiles Club” website. To assist our potential customers in planning and assessing Changes in the Operating Environment and their financial status through our specially trained staff, the Business Operations Bank has introduced the “K-WePlan” service at a ‘K-WePlan Despite the slowdown in the property sector and Center’ located in our Siam Square branch. We have also housing loan market due to weak consumer confidence regularly arranged promotional and marketing activities, during 2007, competition in this loan market intensified. aimed at strengthening our relationships with customers.

K-WePlan: A part of the K Now project, aiming to give Signature Wealth Avenue Forum: How to make individual customers a “Life of Comfort” good local and foreign investments

ANNUAL REPORT 2007 37 To maintain our market share and loan growth, the Bank Changes in the Operating Environment and launched promotional campaigns and public-relations Business Operations activities. Of note were our “K-Home Loan Delivery” service, Competition in the credit card loan business was advisory services through our K-Contact Center, along with heightened during 2007, as more cautious spending by special privileges offered to our K Home Smiles Club members, bank customers was seen in light of the slowing economy such as concerts held during the final quarter of 2007. These hurt by political uncertainty and high oil prices. To retain our services were in addition to several marketing activities, market share and expand the Bank’s customer base within including exhibition booths and other special benefits for this changing operating environment, the Bank introduced customers that we initiated and organized with our Preferred a new product, called the “KBank Everyday Card” with a partners. Because of these efforts, the Bank was able to cash-back feature for greater customer satisfaction. In addition, achieve new loan growth exceeding our target. various promotional campaigns were organized and marketing For personal loans, the Bank introduced the “K-Personal activities were held in cooperation with Preferred partners to Loan for Better Life” product featuring interest rates that are stimulate spending via our credit cards. lower than those of typical personal loans in the market. In In the card accepting business, the Bank has developed response to the intense competition among numerous improved terms and service procedures for better effectiveness. providers, we have adjusted the terms of our personal loan One example of this is the implementation of the “Dynamic products, with the focus on low-risk customers to help expand Currency Conversion” system since June 2007, providing our customer base. Of note was the “K-Personal Loan for support for the Bank’s multi-currency card acceptance service, Provident Fund Members”. Meanwhile, marketing and particularly hotels, hospitals and tourism-related businesses. promotional activities were continually pursued throughout Also, we have adjusted the terms and conditions for our 2007. “SmartPay Phase II” product. A more flexible fee structure • Credit Cards was offered to retail merchants or dealer stores for greater Overview convenience in settling fees with their suppliers. In addition, The Bank offers a broad array of credit card products we extended our card accepting service to over 1,300 petrol and services, including services classified by cardholder type, stations nationwide of PTT Public Company Limited, beginning such as cards for individuals and corporate customers; joint in December 2007, which will help accelerate our card- services in which special benefits from our Preferred partners accepting business volume in the future. are provided to cardholders; and services classified by card • Deposits and Fee-based Income brand, such as the KBank-VISA Card and KBank-MasterCard. Overview For maximum efficiency in our services, the Bank’s credit card The Bank has initiated and developed a wide range of products and services have been continuously developed deposit and card-accessed products. For instance, special and improved. fixed-term deposits and the “K-B/E Investment” product have been offered as investment alternatives for bank customers.

A new service launching: K-Home Loan Delivery Grand opening of KBank’s Everyday Card, a titanium MasterCard

38 ANNUAL REPORT 2007 Meanwhile, we offer the e-Savings account where customers three banks - KASIKORNBANK, Bangkok Bank and Krung can use KBank ATM card, K-Debit Card or K-Credit Card, Thai Bank. We were also the first Thai commercial bank to linked to KBank e-Savings account, to process financial launch an automatic statement service via email - the “K-eMail transactions at K-ATM. Other products and services, such Statement” product - for greater customer convenience. as fund transfers through ATM machines with the K-mAlert • Mutual Fund Business service, utility payments, K-mBanking and K-eMail Statement Overview are also provided for customers’ convenience. The Bank has offered a wide range of mutual fund Changes in the Operating Environment and products with the aim of providing attractive returns and tax Business Operations benefits within acceptable risk levels to investors. Customers Commercial bank deposits grew at a decelerating rate are able to choose products that best suit their investment in 2007, as low deposit rates at commercial banks caused interests, such as funds investing in equity and debt securities, some deposit migration to other savings alternatives providing both domestically and internationally. Special flexible funds higher yields. Deposit competition remained intense. The aimed at managing risk levels in accordance with investor Bank therefore introduced “K-B/E Investment” products with age are also provided, along with property funds, provident maturities of three, six and nine months, along with the “Fixed funds and long-term equity funds (LTFs). Deposit Flexible 4 Month”, which features monthly interest Changes in the Operating Environment and payments and allows customers to make deposit withdrawals Business Operations before maturity, aimed at enhancing our competitiveness In 2007, mutual fund businesses continued to show and increasing savings and investment alternatives for the impressive growth over the preceding year, especially foreign Bank’s customers. investment funds that received the authorities’ support; As for our ATM and debit cards, the Bank has adopted fixed-income funds that were boosted by low deposit rates various techniques to acquire new customers and boost of financial institutions; and equity funds such as LTFs, in spending. Of note are an increased daily withdrawal ceiling, particular. As competition in the mutual fund business and an upgrade of our debit cards to VISA debit cards, together remained high, the Bank, in cooperation with KASIKORN with other marketing campaigns. In the foreign exchange ASSET MANAGEMENT CO., LTD., launched twenty-eight service, we organized several localized marketing activities mutual funds investing in domestic and overseas debentures at key tourist attractions in Bangkok with discount coupons property and LTFs. Also, we introduced the “K-Lifestyle given to customers through alliance stores. Mutual Funds”, which is a flexible fund with different asset In addition to these efforts, we pursued other product allocations according to customer age and risk appetite that and service improvements to increase our business. For is influenced by the period of investment and changing instance, an online fund transfer service via our “K-Cyber environments. These innovations helped maintain our Banking” channel was introduced early in October 2007, market share in this business, and provided more savings in which the receiving party is now able to get their money alternatives to the Bank’s customers. instantly. In this initial phase, the service is provided among

K-eMail Statement Service K-Lifestyle Mutual Fund offered by KAsset

ANNUAL REPORT 2007 39 • Bancassurance meet their demands, we have continued to expand and Overview improve our sales and service channels with the aim of The Bank provides a wide range of insurance products enlarging the Bank’s customer base and providing greater to meet the needs of our customers, guarding them against convenience to customers. Our sales and service channels accidents and unexpected losses. In addition, we have include: improved the quality of our sales and service to have a better • Branch Network understanding of customers, allowing us to offer products that To better serve our customers, the Bank opened better suit them. thirty-six new branches in 2007, bringing the total to 604 Changes in the Operating Environment and branches nationwide. In addition, all our service channels Business Operations have been redesigned and upgraded to better suit the needs In 2007, the Bank launched several new life insurance of each customer segment in each location, as follows: products, including the “Pro Saving 610” and “Pro Saving 1. Full-Functioned Branches, including main and sub- 20/20” plans, which are short-and long-term insurance branches, that provide financial services to customers in all products, respectively. The “Pro Retirement” plan - a product segments from retail to large corporate customers. for customers planning for their retirement - and “Credit 2. In-Store Branches, as well as branches at discount Shield” plan, which is a low-fee life insurance product for stores and tourist attractions aim to serve transactors and credit card customers, were also introduced to satisfy Middle Income customers during non-traditional banking customer demand. In order to attract more customers, we hours, e.g., weekends. adjusted the conditions on some products, and developed 3. Signature Exclusive Centers provide exclusive services new products for specific customer segments, in addition to our Signature customers. At present, we have five Signature to products based on customer affordability. Moreover, the Exclusive Centers, in the Phahon Yothin Main Branch, Thanon Bank held various marketing and promotional activities, in Sathon Branch, Silom Main Branch, Thanon Suapa Main addition to running ads within and outside of our branches, Branch, and Yaowarat Branch. nationwide. Sales competitions for non-life insurance products 4. Branches providing services to customers at specific were organized for our salesforce across the country, while locations, such as large corporate customers in industrial training and examinations for life and non-life broker licenses estates, or the white collars. were arranged regularly, resulting in the number of staff • Foreign Exchange Booths members with these licenses reaching approximately 2,600 In 2007, the Bank set up eight new foreign exchange personnel by the end of 2007, which exceeded our target of booths, bringing the total to seventy-one booths. These 1,500 personnel. booths are located at major tourist attractions such as department stores, malls, public-gathering spots and Sales and Service Channels airports in Bangkok and upcountry. Meanwhile, eight In order to reach customers in all segments and mobile booths were put into service at trade fairs and

A KBank sub-branch in a shopping mall Signature Exclusive Center at the Phahon Yothin Main Branch

40 ANNUAL REPORT 2007 other events, further enhancing customers’ convenience, • Electronic Banking Services especially for foreign exchange and ATM transactions. Our electronic banking services are provided through • Business Banking Centers four main channels including: Through this channel, standard banking services 1. K-ATM, K-CDM and K-PUM similar to those at the Bank’s branches, as well as commercial 1.1 K-ATM loans and cash management services, are provided to our As of December 2007, the number of the Bank’s ATMs corporate clients. In 2007, two new centers were put into came to 3,797 units, up from 3,130 units as of year-end 2006. service, bringing the total to thirty-four centers nationwide, During 2007, the Bank’s ATMs were upgraded to support with twenty-three in Bangkok and the metropolitan area, cards issued in foreign countries without having to go through and eleven upcountry. the VISA network, and our ATM interface was also improved • K-Contact Center to support more complex work. With our emphasis on providing the highest service 1.2 K-CDM quality and utilizing our main service channels to best fit the The Bank’s Cash Deposit Machines, as of December preferences of all customer segments, the Bank has further 2007, totaled 502 units, up from 270 units at the end of 2006. developed the K-Contact Center - now employing an Interactive During 2007, the capacity of our K-CDMs was expanded Voice Response (IVR) system, plus fax, email, and web for greater efficiency. All of our CDMs can now take deposits chat services - implemented throughout 2007. Our efforts at locations nationwide, not just in Bangkok and the include: metropolitan area as before. The CDM interface has also - Service Development: Since August 1, 2007, customers been upgraded for higher competency. have been able to request information about their mutual 1.3 K-PUM fund investments, provided in cooperation with KASIKORN The Bank’s Passbook Update Machines, as of December ASSET MANAGEMENT CO., LTD. At the same time, the Bank 2007, totaled 644 units, up from 595 units at the end of 2006. has developed a system providing information, advice and 2. Internet Banking bookings for our K-WePlan service at the Siam Square 2.1 K-Cyber Banking Branch, since November 24, 2007. By the end of 2007, the number of users of the Bank’s - Support for KGroup Income Growth: With Preferred K-Cyber Banking service for individual customers had partners, the Bank has laid down standards for bancassurance increased 143.06 percent over the previous year. sales and service, particularly for the Mass customer segment. 2.2 K-BizNet Banking Furthermore, we use the K-Contact Center to cross-sell The number of customers with our K-BizNet Banking products and services to target customers, and to process service for small businesses, as of December 2007, had customer applications for some products, e.g., credit cards. registered a growth rate of 43.39 percent over 2006. - Channel Development: For greater convenience and Throughout 2007, not only did the Bank tighten security on better service, the Bank has upgraded our fax server, resulting our Internet banking system, but we also enhanced system in more streamlined fax and document transmission procedures efficiency with a new K-Cyber Banking function where online for customers and related business units. real-time inter-bank funds transfer were made available, by - Service Quality and Efficiency Development: Workshops which the receiving party is able to get their money instantly. for sales and service staff have been held to raise their Also, short-messaging-service (SMS) through mobile phones efficiency in handling customers’ questions and complaints. and email systems has been improved to notify the receiving We also use this channel to conduct surveys measuring party after fund transfers are processed. A special menu customer satisfaction with K-Contact Center staff. According specifying the details of loans is shown in our internet banking to results from the first survey conducted in August 2007, services to provide greater convenience in loan service. At the 84.20 percent of users were satisfied with our service. To same time, marketing activities such as exhibition booths at achieve the next level of service quality, we have initiated trade fairs and other events have been regularly held to help the “Voice of Customer” project, where customer satisfaction expand our customer base. with individual staff will be surveyed through the IVR system. This project will be put in place early in 2008.

ANNUAL REPORT 2007 41 3. K-mBanking During 2007, our K-mBanking service enjoyed spectacular growth of 2,674.93 percent over the previous year. This service has replaced the K-mPay system, and covers the same range of services such as account balance inquiry, airtime refill for prepaid mobile phone service, bill payments on various products and utility services. This K-mBanking has been operational since October 1, 2007. All K-mPay customers have already been automatically transferred to the new service. In addition, promotional campaigns were organized during the year to attract new customers. 4. K-Payment Gateway The Bank’s payment service for online businesses recorded growth of 53.05 percent over the previous year in the number of stores using our services. This was due to our efforts to conduct marketing activities, such as seminars on online business, nationwide. Furthermore, we have developed services and systems for customers’ greater convenience and higher confidence in using this channel. The “K-Payment Gateway Clinic” begun to provide expert advice on online payment systems, while multi-currency support has also been provided for customers engaging in transactions using any of nine major foreign currencies. An online voiding system has been implemented for card-accepting stores to instantly return money to cardholders when transactions are cancelled. This is in addition to our work to increase efficiency and the security of the information verification system for our K-Payment Gateway service.

Customers using services at the Siam Square Branch K-ATM, K-CDM (Cash Deposit Machine) and K-PUM (Passbook Update Machine)

42 ANNUAL REPORT 2007 • Financial Position The Bank’s retail business loan position and deposits - classified by product group as of December 31, 2007, and compared to the end of 2006 - are shown in the following table: • Loans Retail Business Loans Classified by Product Group (Units : Million Baht) Percent of Total Loans Change Retail Business Loans Dec. 31, 2007 Dec. 31, 2006 Million Baht Percent Retail Business Loans 100.00 115,475 93,202 22,273 23.90 Housing Loans 79.92 92,289 73,526 18,763 25.52 Credit Card Loans 14.51 16,759 15,102 1,657 10.97 Consumer Loans 5.57 6,427 4,574 1,853 40.51

As of December 31, 2007, the retail business loans under the supervision of the Retail Business Division totaled Baht 115,475 million, increasing by Baht 22,273 million, or 23.90 percent over the end of 2006. Housing loans showed the largest proportion of gain in overall with their over-year growth reaching 25.52 percent. In terms of over-year percent change, consumer loans showed the strongest growth of 40.51 percent. • Deposit Products Proportion of Deposits Classified by Product Group (Under the Retail Business Division) (Units : Million Baht) Percent of Total Deposits Change Deposits Dec. 31, 2007 Dec. 31, 2006 Million Baht Percent Total Deposits 100.00 617,926 608,424 9,502 1.56 Current Accounts 2.04 12,607 12,651 (44) (0.34) Savings Accounts 47.24 291,887 265,414 26,473 9.97 Fixed-Term Deposit Accounts 50.72 313,432 330,359 (16,927) (5.12) From 3 months to less than 6 months 31.58 195,139 163,868 31,271 19.08 From 6 months to less than 1 year 9.51 58,745 101,981 (43,236) (42.40) From 1 year to less than 2 years 8.74 54,047 59,582 (5,535) (9.29) 2 years or more 0.89 5,501 4,928 573 11.61

As of December 31, 2007, the Retail Business Division’s total deposits amounted to Baht 617,926 million, rising by Baht 9,502 million, or 1.56 percent over the end of 2006. This was attributable to increases in savings and fixed-term deposits - especially in tenors of three months to less than six months - after the Bank introduced the “Fixed Deposit Flexible 4 Month” deposit product in 2007.

ANNUAL REPORT 2007 43 3.5 Capital Markets Business Operations Meanwhile, we remained the underwriter of choice for debentures, as the Bank was ranked No.1 Lead Underwriter Provides comprehensive corporate finance and capital by the Thai Bond Market Association and Bloomberg. The Bank market solutions, as well as advisory services for large-scale also participated in providing syndicated business expansion “Multi-Corporate Business” customers and mid-scale “Large and refinancing loans to energy businesses, property Corporate Business” customers, with the aim of helping developers, as well as finance and securities businesses. customers to boost their profit potential, and in so doing We have continued to provide liquidity services for our consolidate our position as a market leader in this business. customers by engaging in transactions in the debenture secondary market. The Capital Markets Business Division • Business Operations in 2007 also successfully underwrote the issuance of structured Important product and service developments during notes, such as the “K-Smart Note” and callable B/E, which 2007 included the following: provide greater investment alternatives to investors by offering • Corporate Finance attractive gains, but limited downside risks. Moreover, the Overview Bank offered the “K Smart China Link 10/51” and “K Smart There are two major categories of services provided, i.e., Fund” to retail investors in collaboration with KASIKORN financial advisory services and corporate finance services, ASSET MANAGEMENT CO., LTD. Due to our leadership in covering a full range of financial products and financial advisory the debenture secondary market, the Bank was honored with services. In addition to offering services as a broker-dealer the “Dealer of the Year 2006” award by the Thai Bond Market and underwriter for state enterprise bonds, the Bank provides Association in the first quarter; named the “Best Domestic research on the debt market, the economy, foreign exchange Debt House 2006” by Asiamoney magazine in the third and capital markets. quarter, and received “Ranked #1 Sellside for Thai Baht Changes in the Operating Environment and Government Bonds 2007” award by Asset magazine in the Business Operations fourth quarter. In the first quarter of 2007, local interest rates and bond • Currency and Interest Rate Risk Management Products yields were on downward trends, notably in the second quarter, Overview in which the BOT’s interest rate cuts were most evident. We offer comprehensive hedging solutions for foreign However, bond yields have continued to edge upward since exchange and interest rate risk management. Our products, the end of the second quarter as investors downgraded the including swaps, forwards, options and other derivatives, are possibility of further rate cuts by the central bank, along with available to customers in all segments. the market’s expectation of larger supplies of bonds in the Changes in the Operating Environment and near future. In the meantime, sentiment in the local bond Business Operations market continued to be affected by the BOT’s implementation In foreign exchange activities, volatility continued to of reserve requirements on short-term foreign capital, resulting rule the market. In tandem with the BOT’s easing of their in lower transaction volume by foreign investors. As for the capital control measures in some aspects, the Baht continued supply of private sector debentures, although potential issuers on an upward trend against the U.S. Dollar throughout the had been reluctant to issue new debentures in the first quarter year due to selling by exporters and the weakening of the due to interest rate uncertainty, there was an increase in the U.S. Dollar following the sub-prime mortgage debacle, as supply of debentures from the second quarter through to well as the appreciation of other regional currencies. This the fourth quarter after the trend of local interest rates became rapid appreciation of the Thai currency has resulted in clearer. Consequently, the supply of private debentures in exporters’ greater demand for foreign exchange risk 2007 totaled Baht 202,818 million, up from Baht 149,741 management products. Their currency risk management million in 2006. products of choice include forwards and FX option contracts. Despite an uncertain investment and fund raising outlook, On the other hand, some importers have been reluctant to the Bank’s corporate finance services continued to expand, hedge their foreign exchange risks on the expectation that particularly in providing funding arrangements for corporate the Baht would strengthen further, whereas others have customers via debentures, loans and property funds. remained cautious and continued to hedge their foreign

44 ANNUAL REPORT 2007 exchange positions. This demand for currency risk Meanwhile, global financial markets have begun to management products has resulted in an increase in fee witness a liquidity crisis as a result of the U.S. sub-prime income in this business compared to the same period of 2006. mortgage debacle, which pressured the U.S. Federal At the same time, the downward trend in interest rates Reserve to begin easing their Fed Funds rate in September, has prompted corporate customers to hedge their interest bringing it down from 5.25 percent to 4.25 percent by the rate risks by switching from floating to fixed interest rates end of 2007, a drop of 1 percent. Although the Bank has through Interest Rate Swaps (IRS), as domestic interest not been directly affected by this recent heightened global rates are viewed to be close to the bottom, resulting in growth volatility, we have adopted a more cautious policy toward in our fee income from this business during 2007 as well. managing our liquidity and investments by reducing our proportion of foreign-asset investments and durations in 3.6 Treasury Operations our investment portfolios in accordance with market conditions. In addition to managing interest rate and liquidity risks As the Bank of Thailand has set February 12, 2008, against future interest rate trends and/or liquidity conditions, as the final day of operation for their repurchase window, the Central Treasury Department also manages the Bank’s the Bank has therefore begun to explore alternative channels investment portfolios with the aim of achieving maximum for efficient liquidity management. Not only are we using other profit at appropriate risk levels. It should be noted that all of financial instruments such as foreign exchange swaps, these activities are carried out in strict adherence to the bilateral repurchase operations and interbank transactions, Bank’s policies, governing authorities’ rules and regulations, but the Bank has also signed standard master agreements as well as operations of KASIKORNBANKGROUP’s various for the establishment of a private repurchase market with business units. several parties, as well as arranged seminars to update market participants about this topic, which will help ensure • Business Operations in 2007 a smooth transition after the closing of the BOT’s repurchase At the beginning of 2007, the Bank of Thailand (BOT)’s market. At the same time, we continue to monitor other Monetary Policy Committee (MPC) put in place a new factors that could possibly lead to a change in our operating benchmark 1-day repurchase rate, replacing the former procedures, and are preparing a liquidity management 14-day repurchase rate. From January to July 2007, the contingency plan, as well as avoiding any adverse impacts MPC’s benchmark 1-day repurchase rate was on a downward that might take place in the future due to factors including trend, before holding steady at the 3.25 percent level during the enactment of the Deposit Protection Act and the the remaining months of the year, down from 4.9375 percent implementation of the Interbank Transaction Management at year-end 2006. As for commercial banks, their deposit and and Exchange (ITMX) payment platform. lending rates were cut following the BOT’s move. However, the BOT’s and the Financial Institutions Development Fund’s issuances of savings bonds amounting to Baht 89,900 million in August, and Baht 73,800 million in November, coupled with intensified deposit competition, caused most commercial banks to offer special deposit products with higher interest rates beginning in the third quarter of 2007 onwards. Following rate cuts by the BOT in the first half of the year, domestic bond yields declined before staging a rebound during the second half of 2007. This rise in bond yields took place after the market had come to view that the MPC was done with their interest rate cuts. In response to changing domestic interest rates, we have adjusted our investment strategy and liquidity management accordingly.

ANNUAL REPORT 2007 45 • Financial Position For 2007, the total investments of the Central Treasury Department averaged Baht 179,571 million, increasing by Baht 1,034 million, or 0.58 percent, over 2006. Money market investments accounted for 52.67 percent of the total investments, while investments in the capital market accounted for the remaining 47.33 percent. Central Treasury Department’s Income (Units : Million Baht) Change Type of Transaction Percent of Total 2007 2006 Income Million Baht Percent Interest and Dividend Income * Interbank and money market items ** 48.13 3,755 4,488 (733) (16.33) Investments 51.87 4,047 3,735 311 8.34 Total 100.00 7,802 8,223 (422) (5.13)

Note: * The figures above are managerial figures. ** Including loans. . In 2007, the Central Treasury Department earned total interest and dividend income of Baht 7,802 million, falling by Baht 422 million, or 5.13 percent, from the year-end of 2006. This was mainly due to falling domestic interest rates during the year, coupled with volatile liquidity conditions in late 2007.

46 ANNUAL REPORT 2007 4. Operations of Support Groups different dimensions, such as the Labour Law, remuneration management, personnel development and so on. These will With the goal of developing the capabilities and proficiency equip them with necessary management skills for effective of the primary business groups of the Bank, we have thus collaboration with their colleagues and staff members. proceeded with ongoing development of support programs • Talent Management: The Bank has pursued a continued from 2007 in the areas of human resources and development program for talented staff, in preparation for information technology. an expanded scope of work to come, and in response to the diverse short- and long-term business needs. • Building an Effective, Performance-Based • Operational Management: The Bank continues to strive Organization for a performance-based corporate culture. The Bank and In 2007, the Bank’s Human Resource Division reviewed the Labor Unions have reached an agreement for the annual our HR Roadmap and outlined HR strategic plans for 2008, bonus payment scheme, which would be based on performance consistent with KASIKORNBANKGROUP strategic position of the Bank and individual employees. Also, we have broadened and business plans. To materialize the K Now program initiative, our policies to better embrace the concept of ‘Performance, the Bank has upgraded personnel skills and capabilities for Rewards and Opportunities’ (PRO), and shared this with all better advisory services and customers’ satisfaction. Details eleven of our Support Service Providers to include: KASIKORNBANKGROUP so that they are all managed under • Recruitment: The Bank has revised our recruitment proper standards. strategies, making the process smoother and swifter, while • Remuneration Management: The Bank has conducted also attracting more qualified candidates: surveys on several types of remuneration scheme to develop - We held “KBank One Day Recruitment” fairs to complete our remuneration structure, appropriate for the current market the hiring of staff within one day, focusing primarily on acquiring situation, in order to attract capable candidates to work with personnel required in support of our strategic position, or the Bank, and, in the meantime, retain our existing competent personnel in strategic jobs and limited-supply positions. personnel. - We held the “K Excellence Awards” program for students • Refinements to the IT Infrastructure: We have upgraded who have displayed excellent character and diligence in their and refined the Human Resource Information System (HRIS) studies, recognizing potential future employees of the Bank. to permit ‘Employee Self-Service’, which reduces steps and - We have set up a special recruitment unit to expedite time required to perform certain HR-related functions, thereby candidate selection at provincial locales; they conduct the improving overall working efficiency. testing and selection of applicants at regional urban centers • Employee Relations: The Bank continues to support for greater recruitment opportunities in these areas. good employee relations management, which has been - Testing has been made more relevant to the job recognized by our receipt of the ‘Outstanding Establishment requirements of specific positions, to better reflect the abilities in the Year of 2007 for Achievement in Labour Relations and of applicants. Welfare Award’, presented to the Bank by the Ministry of Labour - We participated in the Career Exhibition 2007 event, and Social Welfare for the second consecutive year. wherein we received an overwhelming response of 7,100 applicants, far beyond prior expectation of only 5,000 • IT Security Policy and Infrastructure applications. In 2007, we implemented a new IT Security policy for • Leadership Development: We have undertaken a KASIKORNBANKGROUP, approved by the Bank’s Board of leadership development program to prepare managerial Directors. This new policy contains the guiding principles for staff members by having them attend our special programs, data security management within KASIKORNBANKGROUP which should enhance their efficiency in supervisory tasks, meeting ISO/IEC17799 IT security standards. We also created as well as improve quality of teamwork management and an Information Security Working Team with the primary organizational development. For instance, we have organized responsibility of supporting and conferring with the IT the ‘HR for Non-HR Manager’ training program for executives Sub-Committee on IT security matters that support of other departments to learn about HR management in KASIKORNBANKGROUP business strategies, as well as

ANNUAL REPORT 2007 47 on work in drafting IT security regulations. Our IT security Thailand for system redundancy and reliability. development efforts that were completed during 2007 included. In addition we upgraded our Citrix system used in IT communications with branches to place the systems at the 1. An IT security audit of our online applications, such as level of the most-current version, added more servers, and the popular K-Payment Gateway, as well as K-Cyber Banking licensed more proprietary software for internal use by Bank and other bank systems in order to close loopholes, back personnel in operational procedures, and to support broader doors and other vulnerabilities for increased security against coverage of the Lotus Notes system. We also installed higher- external threats and enhanced confidence of consumers in capacity uninterruptible power supply (UPS) equipment at 30 using our online services. The possibility of unauthorized provincial communications centers nationwide to support more intrusions in the future has also been reduced. efficient and reliable wireless communications systems. 2. Hardware and software specifically designed to detect With a view toward ongoing expansion of the Bank’s unauthorized intrusions was installed, and it has the capability broad range of services, we have been laying plans for to swiftly alert IT system administrators in the event of any implementing greatly improved IT infrastructure during 2008, such activity, providing a first line of defense against ‘hacking’ to support increased use of Internet Banking services, as well penetration attempts. Security tools record evidence as to as messaging services and telecommunications support for the source, time and details of these attacks and the level credit card transactions and other credit facilities. As for work of intrusion that was achieved during the attack. on the Disaster Recovery System, it continues unabated from 3. Equipment specifically designed to heuristically detect last year, as we place great importance on these facilities. abnormalities in system operation due to unidentified virus We are presently undertaking the process of procurement infections was also installed. This significantly reduces the for IT systems to support our various IT applications such risk of damage to the Bank’s IT systems. Again, these system as SWIFT transfers, centralized back office for cheque clearing, tools will quickly identify these attacks, allowing effective and the Call Center, and the Lotus Notes Citrix system for use concurrent fixing. as a sales channel and for inter-branch communications.

• IT Outsourcing In 2007, the Bank continued to develop our IT systems in a number of dimensions, including the Disaster Recovery Plan to support the ATM network and the Trade Finance- related system handled by the Rat Burana Headquarters Information Technology Center to ensure that service to customers would continue without lapse even in the event of a major mishap involving the main IT computing systems of the Bank. We also undertook extensive testing of the Disaster Recovery System, featuring batch tests on the standby computing system’s ability to temporarily take over computing activities during a disaster recovery operation. This testing was conducted based on a scenario assuming that the entire main computing platform of the Bank had suffered a catastrophic failure. The tests were performed in addition to a full online connection simulation to assure us that our standby systems would be able to safely handle the volume of operations required for branch operations, ATMs and credit card transactions with uninterrupted performance in the event of a major disaster affecting the primary system. These efforts also satisfied the mandates of the Bank of

48 ANNUAL REPORT 2007 5. KASIKORNBANK’s Investments in Subsidiary and Associated Companies

• Subsidiary and Associated Companies ‘Subsidiary companies’ refers to companies in which the Bank has the authority to control their financial and operating policies, both directly and indirectly, in order to gain benefit from these firms’ business activities. ‘Associated companies’ refers to companies where the Bank has significant influence, but not complete control, in decision-making with regards to financial and operating policies.

• Investment Policy The Bank’s investment policy is summarized as follows: • Strategic Investments The Bank invests in companies for long-term strategic benefit. The Bank and these companies collaborate on the review of business strategies and cooperation. Such work is achieved through the sharing of various resources, equipment, tools and channels for utmost efficiency and minimum operational redundancy. • Outsourcing Investments The Bank invests in companies that support the Bank’s operations. These are companies providing services that are not the core business of the Bank, and would face inflexibility if they were to remain a part of the Bank. Bank executives are appointed as directors of these companies to oversee their management and operating policies, with a director having control over the firms’ operations. This helps ensure highest service quality, as well as maximum efficiency and benefit. The Bank’s investments in subsidiary and associated companies as of the end of 2007 are listed in the table below:

ANNUAL REPORT 2007 49 Details of Investments

Operating Type No. of No. of Percentage Type Performance Company Name Place of Business Shares Issued Shares Held Held of Shares For 2007* (Percent) (Baht) Investment in Asset Management Company 1. PHETHAI ASSET MANAGEMENT CO., LTD. Bangkok Asset 800,000,000 800,000,000 100.00 Ordinary 184,514,811 Tel. 0 2694 5000 Ext.5208 Fax. 0 2694 5205 Management Investment in KASIKORNBANKGROUP 1. KASIKORN RESEARCH CENTER CO.,LTD. Bangkok Services 100,000 100,000 100.00 Ordinary 9,461,021 Tel. 0 2273 1144 Fax. 0 2270 1218 2. KASIKORN ASSET MANAGEMENT CO.,LTD. Bangkok Mutual Fund 27,154,274 27,154,274 100.00 Ordinary 356,388,586 Tel. 0 2693 2300 Fax. 0 2693 2320 Management 3. KASIKORN SECURITIES PUBLIC CO.,LTD. Bangkok Securities 60,000,000 59,995,762 99.99 Ordinary 51,082,405 Tel. 0 2696 0000 Fax. 0 2696 0099 4. KASIKORN FACTORING CO.,LTD. Bangkok Lending 1,600,000 1,600,000 100.00 Ordinary 122,710,362 Tel. 0 2290 2900 Fax. 0 2276 9710 Services 5. KASIKORN LEASING CO.,LTD. Bangkok Lending 90,000,000 90,000,000 100.00 Ordinary 25,085,902 Tel. 0 2696 9999 Fax. 0 2696 9988 Services Investment in Support Service Providers to KASIKORNBANKGROUP 1. PROGRESS GUNPAI CO., LTD. Bangkok Services 200,000 200,000 100.00 Ordinary 36,062,536 Tel. 0 2273 3900 Fax. 0 2270 1262 2. PROGRESS PLUS CO.,LTD. Bangkok Services 230,000 230,000 100.00 Ordinary 3,156,133 Tel. 0 2225 2020 Fax. 0 2225 2021 3. PROGRESS LAND AND BUILDINGS CO., LTD. Bangkok Real Estate 7,516,000 7,516,000 100.00 Ordinary (6,573,191) Tel. 0 2275 1880 Fax. 0 2275 1889 Development 4. PROGRESS FACILITIES MANAGEMENT CO.,LTD. Bangkok Services 50,000 50,000 100.00 Ordinary 5,044,377 Tel. 0 2273 3288-91 Fax. 0 2273 3292 5. PROGRESS MANAGEMENT CO.,LTD. Bangkok Services 60,000 60,000 100.00 Ordinary 4,683,523 Tel. 0 2275 1880 Fax. 0 2275 1889-91 6. PROGRESS SOFTWARE CO.,LTD. Bangkok Services 100,000 100,000 100.00 Ordinary 23,139,236 Tel. 0 2225 7900-1 Fax. 0 2225 5654-5

50 ANNUAL REPORT 2007 Operating Type No. of No. of Percentage Type Performance Company Name Place of Business Shares Issued Shares Held Held of Shares For 2007* (Percent) (Baht) 7. PROGRESS STORAGE CO.,LTD. Bangkok Services 30,000 30,000 100.00 Ordinary 5,778,139 Tel. 0 2273 3833 Fax. 0 2271 4784 8. PROGRESS SERVICE CO.,LTD. Bangkok Services 20,000 20,000 100.00 Ordinary 10,401,949 Tel. 0 2273 3293-4 Fax. 0 2273 3292 9. PROGRESS H R CO.,LTD. Bangkok Services 10,000 10,000 100.00 Ordinary (1,546,491) Tel. 0 2270 1070-6 Fax. 0 2270 1068-9 10. PROGRESS SERVICE SUPPORT CO.,LTD. Bangkok Services 40,000 40,000 100.00 Ordinary 2,871,789 Tel. 0 2470 5420 Fax. 0 2888 8882 11. PROGRESS APPRAISAL CO.,LTD. Bangkok Services 5,000 5,000 100.00 Ordinary 9,910,227 Tel. 0 2270 6900 Fax. 0 2278 5035 12. K-SME VENTURE CAPITAL CO.,LTD. Bangkok Joint 20,000,000 20,000,000 100.00 Ordinary (579,220) Tel. 0 2693 2333 Fax. 0 2693 2323 Venture 13. KHAO KLA VENTURE CAPITAL MANAGEMENT CO.,LTD.** Bangkok Venture 500,000 500,000 100.00 Ordinary (1,027,510) Capital Tel. 0 2693 2333 Fax. 0 2693 2323 Management Investment in Associated Companies 1. PROCESSING CENTER CO.,LTD. Bangkok Services 100,000 30,000 30.00 Ordinary 157,480,787 Tel. 0 2237 6330-4 Fax. 0 2237 6340 2. N.C.ASSOCIATE CO.,LTD. Bangkok Trading 10,000 2,823 28.23 Ordinary - Tel. - Fax. - 3. RURAL CAPITAL PARTNERS CO.,LTD. Bangkok Joint 1,000,000 275,000 27.50 Ordinary (57,298) Tel. 0-2318-3958 Fax. 0-2718-1850 Venture 4. M GRAND HOTEL CO.,LTD. Bangkok Hotel 100,000,000 20,000,000 20.00 Ordinary - Tel. - Fax. -

Note: * These operating performance figures are shown in subsidiary and associated companies’ financial statements. ** KHAO KLA VENTURE CAPITAL MANAGEMENT CO., LTD. is a subsidiary company of KASIKORN ASSET MANAGEMENT CO., LTD. Since the Bank has fully owned KASIKORN ASSET MANAGEMENT CO., LTD., which holds 100 percent shares in KHAO KLA VENTURE CAPITAL MANAGEMENT CO., LTD., it means that the Bank has indirectly held 100 percent shares in KHAO KLA VENTURE CAPITAL MANAGEMENT CO., LTD.

ANNUAL REPORT 2007 51 Risk Management and Risk Factors

1. Overall Risk Management To provide a full range of financial services, • Risk-adjusted Performance Measurement KASIKORNBANK operates using the concept of a ‘financial The performance of business units is measured and conglomerate’, which includes subsidiary and associated evaluated on a risk-adjusted basis. companies offering other types of financial services, or support functions, respectively. In doing so, the Bank adheres to • Risk Management Process service principles that are the utmost in responsibility and To ensure effective risk management, the Bank has accountability to all stakeholders and customers with regards outlined a risk management process, which includes the to proper risk evaluation. The Bank’s risk management policy following key steps: consists of the following main elements: • Risk Identification Key risks are proactively identified in detail, including • Risk Management Principles types and sources of risks, as well as other risk-related factors, The Bank’s risk management includes credit, market, both internal and external. Assessments and projections of liquidity, operational, and other risk management. The the Bank’s current and expected risks are also in place. principles of Risk-adjusted Return on Capital (RAROC) and • Risk Measurement Economic Profit are also used to measure risk management Various models and methodologies for risk measurements performance. The Bank operates under the following Risk suitable for different business characteristics are utilized. Management principles: These models and methodologies are verified, approved • Business Lines Accountable for Risk and reviewed regularly. Business units own the risks assumed, and are responsible • Risk Monitoring and Control for continuous and active management of all risk exposures, Risk measurement policies and appetites designated by so that risks and returns are optimally managed in line with the Bank’s Board of Directors, which are implemented through the risk appetite. Meanwhile, support units, which provide various guidelines, procedures and risk limits, are continuously services to core business units and share common business monitored. goals, are accountable for managing business-derived • Risk Reporting operational risks. Timely and adequate risk reports covering all aspects • Independent Risk Controls of operations are required to ensure highest effectiveness in An independent risk control process is implemented with the risk management. establishment of control functions responsible for providing an independent and objective view of risk-taking activities Besides this, in order to avoid large financial losses, to safeguard the integrity of the entire risk process. In addition, and to ensure continuity in business operations, the risk these control functions are set to ensure that the risk level management process also takes into account both normal is in line with the risk appetite. and crisis conditions. • Defined Risk Management Policy The Risk Management Committee determines risk • Risk Management Structure management policy under guidelines from the Bank’s Board The Bank’s organization has been structured to facilitate of Directors. all aspects of risk management, while each business unit’s • Integrated Risk Management responsibilities and segregation of duties have been clearly The management of various kinds of risks incurred from identified in accordance with good internal-control practices. all aspects of the Bank’s business transactions is carried out The Bank’s overall risk management framework encompasses in an integrated framework at all levels within the organization. the following organizational structure:

52 ANNUAL REPORT 2007 • The Bank’s Board of Directors has the ultimate Credit Risk Management Guidelines responsibility for approving all risk management policies and In managing credit risk, the Bank has adhered to guidelines, setting risk limits and risk appetites, and ensuring international guidelines for compliance through the centralization the establishment of effective risk management systems and of credit approval processes and separation of sales and procedures in line with international standards. credit decisions to promote the Bank’s transparency, as well • The Audit Committee is responsible for reviewing risk as checks-and-balances in credit processes. Credit-related management processes and the internal risk control system, staff all share the goals of attaining good credit quality and ensuring their adequacy and effectiveness. business development. Furthermore, the Bank’s Board of Directors has assigned Furthermore, emphasis has been placed on credit the following committees and sub-committees to assist in operational efficiency via proper monitoring and control managing various risks. processes. Clear roles and responsibilities have been defined • The Risk Management Committee is responsible for and disseminated to all staff levels, while clear guidelines and overseeing and monitoring risk management policies and principles are used to add value in credit operations, improve overall risk profile per the policies and guidelines approved the credit culture, and foster a common credit language. In by the Bank’s Board of Directors. addition, staff members have steadily received credit skills • The Asset and Liabilities Management Sub-Committee training to better serve customers, while automated operational is responsible for managing interest rate, liquidity and foreign and support systems of the highest standards and efficiency exchange risks. have been developed. • The Credit Policy Sub-Committee is responsible for establishing credit policies that are in line with the Bank’s Credit Policies and Credit Risk Management Tools strategies and credit risk appetite. In order to define clear operational targets for staff, the Bank has established business strategies based on an The day-to-day responsibility for measuring and acceptable risk appetite. These business strategies have monitoring all related risks has been delegated to the Internal been translated into a consistent set of credit policies and Risk Management Department. This department is accountable action plans that cover all customer segments and product for developing sophisticated risk management tools by lines. Proper qualifications for credit eligibility have been converting all related risks into a single comparable term of established within these policies and guidelines, which capital. This concept enables the Bank to estimate and control comply with, and go beyond, BOT rules and regulations. the magnitude of various types of risks, set pricing that In addition to the Bank’s constant improvements in our reflects the risk level of different customers and businesses, credit risk management tools, especially in the aspect of and allocate capital to properly reflect returns and risk levels. customers’ risk assessment and loan portfolio diversification, credit policies are regularly reviewed and updated to ensure 2. Risk Management that they are in line with the guiding principles and rationale, and are always available as a reference for staff through the • credit Risk Management Bank’s online information systems. Customer risk rating tools Credit risk refers to the risk that a counterparty or have been developed and utilized to support credit underwriting borrower may default on contractual obligations or agreements. and set appropriate pricing for each customer. As for performing Such a default may be caused by the counterparty’s inability business customers, their credit ratings are classified into to pay because of financial encumbrances, or their intention twelve different ratings. Three additional ratings are set not to abide by the agreements, resulting in a loss to the specifically for non-performing business customers. Regarding Bank. retail customers, credit scoring is in place to improve credit approval standards and efficiency. When calculating the return

ANNUAL REPORT 2007 53 on capital, the cost of funds and related operating expenses agencies. These will help reflect effectively the level of risk are included, as well as the expected loss component from associated with each counterparty. the credit risk. In so doing, prices are set in accordance with each individual customer and customer segment, depending Credit Underwriting and Approval Procedures on the credit portfolio management of each business group. The Bank’s credit underwriting and approvals have Significant attention has also been given to the control been based on up-to-date data and information to facilitate of loan limit concentrations in different dimensions, i.e., transparent and standardized credit procedures, while industry, product type, customer characteristic and geographical approval processes have been designed to fit customers’ location. Each credit limit dimension is continuously monitored unique needs in different segments. For example, for on a monthly basis to make certain that loan portfolio quality large-scale corporate customers, relationship managers is in line with the Bank’s business plans. with solid understanding of corporate financial needs and In 2007, the Bank placed considerable emphasis on risks are assigned to help structure loan facilities that will not enforcement of credit policies among subsidiaries of only meet customers’ complex financial needs, but also with KASIKORNBANKGROUP under the uniform standard of the pricing appropriately set according to their risk ratings as Bank, in line with the consolidated supervision policy of the Bank quantified by our tools. Relationship managers are also of Thailand. This included continuing effort for development responsible for preparing credit risk reports submitted to of tools for credit risk management, as evidenced from underwriters for loan approvals, while underwriters have cooperation between the Bank and KASIKORN LEASING different levels of authority for credit approvals. CO., LTD., in developing a credit scoring system for retail hire For institutional clients, a similar credit underwriting and purchase credit approvals. These new tools should result in approval process has been employed, but with additional higher quality and more efficient credit approval procedures considerations of country risk ratings and transactions in in light of a larger volume of transactions, as well as better money and capital markets, such as derivatives and asset quality controls. investment transactions. The Bank, furthermore, has revised our credit risk In the underwriting and approval processes of retail management policy to facilitate various business operations, lending, which includes credit card services, plus personal, the offering of new products and services, and complex capital housing and retail business loans, the Bank utilizes a credit market transactions. Of notes are revisions in conditions or scoring system, which is based on the Bank’s customer credit qualifications of customers eligible for dealer financing, thus history. Emphasis has been placed on verification of personal leading to greater flexibility in credit underwriting process data and assessing income-liability consistency for each case, under the Bank’s accepted risk appetite. As for some complex with a main reference being the National Credit Bureau credit derivative products that are rather new in Thailand, Co., Ltd. We also make sure that our underwriting and approval e.g., Credit Default Swap (CDS), Credit Linked Notes and processes are concise and swift, thus meeting customers’ Swap guaranteed by CDS, the Bank has enforced a credit needs and achieving their satisfaction. policy and limits for capital markets products, as an operational In 2007, the Bank developed a swifter credit underwriting guideline for all concerned parties, for common understanding process, but still adhered strictly to a prudent control of among them. The policy covers some key features of the acceptable risks. The Bank, moreover, continued developing products, objectives, risk exposures, risk mitigation, the the higher quality and more efficient credit approval procedures counterparty risk rating criteria, as well as roles and duties among subsidiary companies, notably the centralization of of all involved departments. The Bank, in the meantime, has credit approvals for the customers of upcountry offices of revised the criteria for Credit Support Annex (CSA), as a tool KASIKORN LEASING CO., LTD. for mitigation of risks associated with derivative transactions. A threshold amount showing a maximum acceptable risk Post-Credit Approval Operations level, along with a minimum transfer amount, are clearly set, As for post-credit approval operations, the Bank has according to risk rating by internationally recognized rating set up credit process centers and units nationwide for post-

54 ANNUAL REPORT 2007 credit approval operations in order to promote standardized procedures as applied to the KASIKORNBANKGROUP’s and efficient operations. These centralized units are responsible subsidiaries as well. for consolidating all required contracts and setting up credit lines, as well as maintaining lending agreements and collateral • Outstanding Loans documents, plus supporting some important credit data for As of December 31, 2007, the Bank’s consolidated effective monitoring of credit quality. As a result, credit support outstanding loans stood at Baht 762,505 million, increasing functions in upcountry branches have been transferred to by Baht 85,298 million, or 12.60 percent, over Baht 677,207 credit process centers located in every region across the million at the end of 2006. country. As of December 31, 2007, 60.10 percent of the Bank’s In 2007, the Bank initiated an upgrade plan for our credit outstanding loans to customers were loans exceeding Baht monitoring procedures, which are divided into three areas: 20 million. Credit extended to the 20 largest borrowers, first, credit usage behavior monitoring; second, customers’ excluding Phethai Asset Management Company Limited and business performance monitoring and covenant follow-ups; the companies in KASIKORNBANKGROUP, accounted for and third, debt servicing ability monitoring. The Bank’s Baht 42,994 million, or 5.65 percent of the Bank’s total loan relationship managers will monitor and evaluate individual portfolio, which is not high compared to total outstanding customer status in these areas on a regular basis, and/or loans of the Bank. Classified by customer type, juristic persons when there are unexpected events affecting customer credit accounted for Baht 468,697 million, or 61.56 percent of quality, such as currency fluctuations, or natural disasters. outstanding loans; while sole proprietorships and individual Such customer credit monitoring will enable us to take proper customer credit accounted for the remaining 38.44 percent. steps to maintain sound credit quality. In terms of maturity, credit with maturities of less than or In addition, an intranet platform, the Collateral Appraisal equal to 1 year accounted for 59.57 percent of the Bank’s Tracking (CAT) system, has been in place since 2006 to assist total loans. various analytical management tasks, allowing faster and more cost-efficient tracking of customers’ collateral and collateral appraisals. In 2007, the Bank refined our collateral- related credit policy in accordance with the Basel II Capital Accord, as a clear guideline with details about collateral aging was added to make sure that the value of collateral covers the length of loan contracts. Lists of undesirable collateral were also specified, including debt and equity securities that have a significant positive correlation to the credit customers, or obligors. For instance, the Bank will not accept debt or equity securities issued by the obligor company as collateral for a loan. Risk Asset and Credit Process Review The Bank considers the review and evaluation of asset quality and credit processes as crucial to our aim of achieving the highest standards in credit management. This is the responsibility of the Risk Asset Review Department, having been assigned to review quality of the Bank’s credit policy and processes, from the credit write-up, to underwriting, contract preparation, and monitoring of credit quality. The above responsibility includes the credit processes and

ANNUAL REPORT 2007 55 The Bank’s Consolidated Lending Portfolio - Profile Less than 20 MB Over 20 MB As of December 31, 2007 39.90 60.10 Credit Amount As of December 31, 2006 40.17 59.83 Business entities Individual As of December 31, 2007 61.56 38.44 Type of Customer As of December 31, 2006 61.50 38.50 Less than or equal to 1 year Over 1 year As of December 31, 2007 Credit Maturity 59.57 40.43 As of December 31, 2006 64.09 35.91

0% 20% 40% 60% 80% 100%

The Bank’s consolidated lending portfolio, including accrued interest receivables, as of the end of 2007 and 2006, is depicted in the following: The Bank’s Consolidated Lending Portfolio (including Accrued Interest Receivables)

Agricultural & Agricultural & Mining 3.07% Mining 2.90% Others Others 9.33% 8.16% Housing Housing Loans 12.52% As of Loans 11.43% As of December December Utilities & Utilities & Services 8.72% 31, 2007 Services 9.44% 31, 2006 Real Estate & Real Estate & Construction 6.01% Construction 6.38% Manufacturing & Manufacturing & Commerce 60.35 % Commerce 61.69 %

• Non-performing Loans As of December 31, 2007, the Bank’s consolidated NPLs stood at Baht 34,980 million, equal to 4.44 percent of the total outstanding credit, including that of financial institutions. For Bank-only NPLs, the amount totaled Baht 31,915 million, accounting for 4.06 percent of the total outstanding credit, including that of financial institutions, which represented an over-year decline. These NPL figures are shown in the table below:

56 ANNUAL REPORT 2007 Non-Performing Loans ( Units: Million Baht ) Year Ending Dec. 31, 2007 Dec. 31, 2006 The Bank’s consolidated NPLs 34,980 46,495 Percent of total outstanding credit, including that of financial institutions 4.44 6.85 The Bank-only NPLs 31,915 38,291 Percent of total outstanding credit, including that of financial institutions 4.06 5.67 The Bank of Thailand has required commercial banks to report additional information on NPLs, which includes: - Net NPLs, which refer to non-performing loans after allowances are deducted. - The ratio of net NPLs to total loans after deducting allowances for bad loans. As of December 31, 2007, the Bank’s consolidated net NPLs stood at Baht 17,600 million, equal to 2.29 percent of the total outstanding credit, including that of financial institutions. For the Bank-only net NPLs, the amount totaled Baht 15,776 million, accounting for 2.05 percent of the total outstanding credit, including that of financial institutions, which represents an over-year decrease. The net NPL figures are shown in the table below:

Net Non-Performing Loans ( Units: Million Baht ) Year Ending Dec. 31, 2007 Dec. 31, 2006 The Bank’s consolidated net NPLs 17,600 27,282 Percent of total outstanding credit, including that of financial institutions 2.29 4.14 The Bank-only net NPLs 15,776 20,886 Percent of total outstanding credit, including that of financial institutions 2.05 3.18 In 2007, the Bank and our AMC entered into debt restructuring agreements with borrowers with pre-written-off outstanding debts totaling Baht 29,960 million. At the same time, the Bank-only pre-written-off outstanding debt amounted to Baht 28,944 million. The details of debt restructuring and losses from debt restructuring as of the end of 2007 and 2006 are shown in the following table: Debt Restructuring and Losses from Debt Restructuring ( Units: Million Baht ) Year Ending Dec. 31, 2007 Dec. 31, 2006 Debt restructuring of the Bank and our AMC 29,960 31,830 Losses from debt restructuring 1,424 4,700 Debt restructuring of the Bank-only 28,944 28,536 Losses from debt restructuring 1,207 4,260 • Allowance for Doubtful Accounts and Revaluation Allowance for Debt Restructuring As of December 31, 2007, the Bank’s consolidated allowances for doubtful accounts and revaluation allowance for debt restructuring totaled Baht 25,852 million. This amount was equivalent to 115.95 percent of the level required by the BOT. As for Bank-only allowances for doubtful accounts, the amount stood at Baht 24,247 million, which was equivalent to 113.34 percent of the level required by the BOT.

ANNUAL REPORT 2007 57 • Foreclosed Properties properties. As for Bank-only figures, allowances for the As of December 31, 2007, the Bank’s consolidated impairment of foreclosed properties totaled Baht 1,467 million, foreclosed properties had a cost value of Baht 17,343 million, representing 11.53 percent of the cost value of foreclosed accounting for 1.74 percent of total assets. At the same time, properties. Current allowances, both consolidated and Bank-only foreclosed properties had a cost value totaling Bank-only, are believed to be sufficient to cover holding, Baht 12,720 million, accounting for 1.28 percent of total maintenance and disposal expenses, as well as losses on assets. the liquidation of foreclosed properties. The details of Meanwhile, consolidated allowances for impairment of foreclosed properties and their associated allowances, as foreclosed properties stood at Baht 1,978 million, equivalent of the end of 2007 and 2006, are shown below: to 11.41 percent of the cost value of those foreclosed Foreclosed Properties ( Units: Million Baht ) Year Ending Dec. 31, 2007 Dec. 31, 2006 Consolidated foreclosed properties 17,343 18,727 Percent of total assets 1.74 2.00 Allowances for impairment of consolidated foreclosed properties 1,978 2,232 Percent of consolidated foreclosed properties 11.41 11.92 Bank-only foreclosed properties 12,720 13,435 Percent of total assets 1.28 1.43 Allowances for impairment of Bank-only foreclosed properties 1,467 1,796 Percent of Bank-only foreclosed properties 11.53 13.37 • Phethai Asset Management Company Limited As of December 31, 2007, Phethai AMC had resolved with an expected recovery rate of 48.00 percent. The details and/or restructured NPLs amounting to Baht 70,262 million, of NPL resolution and/or restructuring over the past five or 95.00 percent of the total initial unpaid principal balance, quarters are shown in the table below.

Loans Resolved/ Restructured at Phethai Asset Management Company Limited ( Units: Million Baht ) Quarter Ending Dec. 31, 2007 Sep. 30, 2007 Jun. 30, 2007 Mar. 31, 2007 Dec. 31, 2006 Phethai Asset Management Company Limited Cumulative loans resolved/restructured 70,262 66,759 65,702 59,774 55,794 Percent of the total initial unpaid principal balance 95.00 90.00 89.00 80.76 75.44 • Thai Asset Management Corporation (TAMC) quarterly, at the weighted average of deposit rates of five The Bank has transferred the sub-quality debts of major Thai commercial banks, paid for by a 1-year, extendable, borrowers, who all had characteristics matching those in the non-transferable, FIDF-guaranteed note. Emergency Decree on the Thai Asset Management Corporation Despite the asset transfer to TAMC, the Bank remains (B.E. 2544) and the Asset Transfer Agreement, to TAMC. exposed to a proportion of risk in our share of TAMC’s potential In exchange for the transferred assets, TAMC issued losses. According to the Emergency Decree on the Thai the Bank a 10-year, non-transferable, callable note, Asset Management Corporation (B.E. 2544) and the Asset guaranteed by the Financial Institution Development Fund Transfer Agreement, at the end of the fifth and tenth years (FIDF). The notes’ yields include an annual coupon, reset dating from July 1, 2001, TAMC and the Bank would share

58 ANNUAL REPORT 2007 gains or losses arising from the resolution of the Bank’s ALCO’s objective is to generate the highest returns to the transferred assets. Bank, while maintaining risk within levels approved by the During the year ending December 31, 2007, the Bank Risk Management Committee and the Board of Directors. did not transfer any additional assets to TAMC. As a result, The Bank analyzes mismatches of repricing periods in the total transferred assets, with a gross book value of Baht assets and liabilities to evaluate the interest rate risk level. 14,557 million as of December 31, 2007, were priced at Baht These sensitivity analyses are used to analyze the effect of 10,123 million. Meanwhile, the Bank recorded FIDF notes in changes in deposit, lending, money market and capital market payment, totaling Baht 10,123 million. rates on the Bank’s interest income over the next twelve According to primary information as suggested by months, as well as on our financial position and off-balance- TAMC, the Bank had Baht 29 million losses arising from these sheet items. With results obtained from these sensitivity sub-quality debt accounts. analyses, the Bank’s asset and liability structures, which are linked to various types of interest rates, are properly • Market Risk Management managed. Market risk stems from changes in interest rates and The Value-at-Risk (VaR) concept, a statistical tool that exchange rates, as well as in securities and commodity prices, attempts to specify the probability distribution of risks by which can cause volatility in the Bank’s income or the economic using historical data on relevant variables, is also employed value of assets and liabilities of the Bank and K Companies, to measure market risk. This helps forecast the potential either at present or in the future. maximum loss to the Bank at specified confidence levels. Furthermore, the Bank conducts stress testing, supplementing Market Risk Management Guidelines the VaR method, to enhance the thoroughness of risk The Bank adheres to market risk management principles measurement. Meanwhile, the Bank’s interest rate risk that are efficient and suitable for the changing environment, management process has been developed in accordance while asset and liability structures are properly managed, and with the BOT’s interest rate risk supervision policy applied market risk is controlled in accordance with the risk appetite. to financial institutions’ banking books, enacted in 2006. Also, the Bank’s market risk management is set to comply Analyses of financial assets and liabilities based on with the BOT’s requirements and related regulations, and with contractual repricing periods, as of the end of 2007 and the policies controlled by the Risk Management Committee. 2006, are shown below: In addition, transparency in our market risk management structure has continually been maintained, reflecting segregation of duties, while independence of risk control functions has been emphasized. Market Risk Management Procedures and Tools Core banking operations that are exposed to market risk can be divided into two major groups: asset and liability management activities, and trading book activities. • Market Risk in Asset and Liability Management Activities • Interest Rate Risk Management The Assets and Liabilities Management Sub-committee (ALCO) is responsible for monitoring and controlling interest rate risk stemming from mismatches between the interest rate and the asset and liability structures of the Bank.

ANNUAL REPORT 2007 59 Consolidated Financial Statement as of December 31, 2007 ( Units: Million Baht ) Non- Immediate Less than 6 months 1 year to More than interest Stop Total Repricing 6 months to 1 year 5 years 5 years bearing accrued Financial Assets Cash - - - - - 18,051 - 18,051 Interbank and money market items 4,952 50,398 62 - - 2,996 - 58,408 Securities purchased under resale agreements - 10,700 - - - - - 10,700 Investment 18,432 1,633 16,737 31,112 17,763 12,176 1,469 99,322 Loans 552,810 85,304 1,087 34,624 27,711 8,945 52,024 762,505 Accrued interest receivables - - - - - 1,263 - 1,263 Customers’ liability under acceptances - - - - - 1,462 - 1,462 Other assets - - - - - 5,293 - 5,293 Total 576,194 148,035 17,886 65,736 45,474 50,186 53,493 957,004 Financial Liabilities Deposits 392,692 313,778 33,832 1,839 - 41,681 - 783,822 Interbank and money market items 1,677 8,763 600 343 - 2,802 - 14,185 Liabilities payable on demand - - - - - 11,117 - 11,117 Borrowing - 38,198 877 301 18,724 - - 58,100 Bank’s liability under acceptances - - - - - 1,462 - 1,462 Other liabilities - - - - - 6,107 - 6,107 Total 394,369 360,739 35,309 2,483 18,724 63,169 - 874,793 Repricing gap of on-balance sheet items 181,825 (212,704) (17,423) 63,253 26,750 (12,983) 53,493 82,211

60 ANNUAL REPORT 2007 Consolidated Financial Statement as of December 31, 2006 ( Units: Million Baht ) Non- Immediate Less than 6 months 1 year to More than interest Stop Total Repricing 6 months to 1 year 5 years 5 years bearing accrued Financial Assets Cash - - - - - 18,411 - 18,411 Interbank and money market items 3,003 74,267 3,219 - - 2,368 - 82,857 Securities purchased under resale agreements - 22,200 - - - - - 22,200 Investment 10,538 17,160 3,686 30,895 23,727 16,577 2,041 104,624 Loans 490,824 89,540 11,558 19,909 4,706 1,365 59,304 677,206 Accrued interest receivables - - - - - 1,813 - 1,813 Customers’ liability under acceptances - - - - - 525 - 525 Other assets - - - - - 6,535 - 6,535 Total 504,365 203,167 18,463 50,804 28,433 47,594 61,345 914,171 Financial Liabilities Deposits 345,864 181,094 172,834 5,452 - 41,016 - 746,260 Interbank and money market items 2,246 11,271 1,067 800 - 2,305 - 17,689 Liabilities payable on demand - - - - - 6,757 - 6,757 Borrowing - 27,615 1,811 1,864 19,174 - - 50,464 Bank’s liability under acceptances - - - - - 525 - 525 Other liabilities - - - - - 9,389 - 9,389 Total 348,110 219,980 175,712 8,116 19,174 59,992 - 831,084 Repricing gap of on-balance sheet items 156,255 (16,813) (157,249) 42,688 9,259 (12,398) 61,345 83,087

ANNUAL REPORT 2007 61 • Equity Risk Management Furthermore, a stress-testing system has been The Bank has no policy of adding to our equity developed to estimate potential losses caused by various investments, and has plans to reduce the size of these shocks on the Bank’s financial positions not captured in VaR investments that are unrelated to our core financial business. calculations. In the stress-testing procedure, due attention In this endeavor, we will analyze relevant information and is also paid to some ‘Past Crisis Scenarios’ and the adverse timing to ensure maximum benefit to the Bank. consequences thereof, e.g., the Asian economic crisis in 1997, and the 9/11 attacks in the U.S., etc. This stress-testing • Market Risk in Trading Book Activities procedure also includes ‘Hypothetical Crisis Scenarios’, such Trading book activities are handled under the guidance as different change patterns of yield curves, etc. A testing of the Bank’s policy set particularly for activities that involve procedure for the Bank’s VaR model, known as ‘Back Testing’, the purchase and sale of currencies, fixed-income securities has also been improved and implemented for sounder market and derivative instruments, as well as bond underwriting. The risk measurement. In two charts below, the chart on the left Capital Markets Business Division is responsible for managing shows a comparison between estimated results using the risk status as a result of changes in interest rates, exchange VaR method and hypothetical profits and losses. It was found rates and derivatives embedded under these transactions. In that the differences between the two series were within a addition, the trading book activities include equity underwriting, satisfactory range. In the meantime, the Bank also monitors whose risk status is under management by K Companies. the distribution of daily market risk-related gains and losses, All trading book activities are under the close supervision as shown in the chart on the right, to complement our routine of the Internal Risk Management Department and the Risk risk analyses. All of these analytical assessments confirm Management Committee to ascertain that the aggregate the efficiency of the Bank’s risk management tools, thereby risk of trading book activities is within limits. These limits are promoting efficient market risk management as being in line constantly monitored through the use of the Value-at-Risk with international standards. Limit and Sensitivity Limit methods. In 2007, the Bank planned to adopt the Capital Markets Business System for booking and the efficient management of risk.

Back Testing for Trading Portfolio Daily Market Risk-Related Gains and Losses VaR Frequency 07 07 07 07 07 07 07 07 07 07 07 07 07 07 07 07 07 07 07 07 07 07 07 07 07 07 07 07 07 Jul Apr Apr Oct Oct Oct Jan Jan Jan Jan Fab Fab Mar Mar Mar Sep Sep Aug Aug Aug Dec Dec Nov Nov May May May June June 9 4 1 7 5 2 6 7 11 24 17 30 12 25 20 20 16 29 10 21 15 28 19 12 23 18 31 13 26 Loss Profit

62 ANNUAL REPORT 2007 In the purchase and sale of derivative products in 2007, • Liquidity Risk Management the Bank entered more complex derivative transactions to Liquidity Risk arises from a failure to meet obligations meet the diverse demand of customers, such as Interest when they come due, because of an inability to convert Rate Option, Foreign Exchange Option, Structured Notes, assets into cash, or to obtain sufficient funds to meet cash Credit Derivatives and Commodity Derivatives, etc. New, needed with appropriate costs within a limited time period, more sophisticated products have been developed, especially which may then result in a loss to the Bank. ‘Exotic Derivatives’, for which the Bank has to develop necessary platforms and procedures continuously for timely Liquidity Risk Management Guidelines and suitable management of risks incurred from these new, The Central Treasury Department is responsible more sophisticated products. We also plan to upgrade for managing liquidity in order to meet cash needed by calculations of capital adequacy with respect to these complex the Head Office and branches by managing highly liquid derivatives and other financial instruments. Baht and foreign currency assets, as well as balancing As for bond and equity underwriting, under management short-term and long-term funding alternatives. The Asset by KASIKORNBANKGROUP, in 2007, there was some large and Liability Management Sub-Committee (ALCO) is equity underwriting in property, as well as information and responsible for setting up policies and guidelines for communication technology sectors. We, in this regard, have managing liquidity, which must be complied with liquidity adopted the procedures for risk measurement and control, risk standards approved by the Risk Management according to the limits as specified, under oversight and Committee and the Board of Directors. control by the Internal Risk Management Department and Risk Management Committee. Liquidity Risk Management Procedures and Tools In managing liquidity risk, the Bank has established • Interest Risk Management appropriate levels of liquid assets that should be maintained The Bank has entered transactions, such as Interest to sufficiently meet cash needed when demand arises, and Rate Swap, to satisfy customer demand for interest rate risk in line with the BOT guidelines. As of December 31, 2007, management. Interest Rate Risk has been controlled under the Baht 183,001 million of liquid assets held by the Bank limits, by the Internal Risk Management Department and and subsidiaries consists of cash, interbank and money market Risk Management Committee. Risk analysis, under the items, securities purchased under resale agreements, and ‘Value-at-Risk’ method has also been adopted for effective net investments in securities. This amount had decreased management of interest rate risk. by Baht 42,439 million from the level as of December 31, 2006. • Foreign Exchange Risk Management Future liquidity requirements are assessed by estimating The Capital Markets Business Division manages the expected cash inflows and outflows in different currencies purchase and sale of foreign currencies on a daily basis, based on both normal and crisis conditions, while relevant which can induce exchange rate risk, thereby affecting the factors related to assets and liabilities, as well as contingent Bank’s profit and loss and financial status. The Bank has obligations, are also taken into account in this estimate. In a policy of maintaining this risk at a low level by setting limits addition, emergency funding plans mentioning processes on foreign currency positions in accordance with the Bank’s for dealing with liquidity shortages during crises have been business and requirements of the BOT. These limits are kept established to ensure that the problems are instantly solved under the close supervision of the Internal Risk Management without interrupting business operations. Department and the Risk Management Committee. In addition, the Value-at-Risk (VaR) method is used to manage foreign exchange risk.

ANNUAL REPORT 2007 63 Additionally, constant monitoring of changes in the To seek out new tools for liquidity management, and balance sheet structure is another important procedure for to minimize concentration of funding sources, while providing liquidity risk management. Calculations and analyses of saving alternatives for customers, the Bank issued bill of various liquidity ratios are conducted, as they are used as exchange (B/E) for retail customers during 2007. This included early-warning indicators to facilitate liquidity management an ongoing issuance of short-term debentures under limits and related decision-making. An important liquidity ratio is approved in shareholders’ meetings. the Loan-to-Deposit Ratio, which stood at 97.28 percent Financial assets and liabilities, as of the end of 2007 as of December 31, 2007, increasing over 90.75 percent at and 2006, based on their contractual maturities, are shown the end of 2006. below: Following the development of liquidity management tools for measurement and assessment of the current risk level, and for projection of risk from change in the future business environment and expansion since 2006, the Bank has put the tools in use from the second quarter of 2007 onward. These have enabled the Bank to manage more complex liquidity risks with a higher degree of precision, in line with the international standard. For 2008, the Bank has set a plan to review assumptions used for balance sheet management and to develop treasury product information, following the introduction of a new database system to replace the existing one, which is scheduled to be phased out within 2008. The Bank has also more closely monitored changes in the operating environment, which, to a certain extent, might affect efficiency in liquidity risk management, especially the BOT’s new monetary policy framework, enforced since January 17, 2007. The BOT, in this regard, would have to gradually open other liquidity windows, and to plan for shutdown of the central bank’s repurchase market on February 12, 2008. To cope with possible changes more effectively, the Bank has redefined our risk management procedure in compliance with the new regulatory requirements in 2007. This includes preparation to cope with changes in market liquidity conditions as a result of an expanded limit for BOT bond issuances, including the possibility of a sizable issuance of debt instruments by other government agencies for funding mobilization. In addition, the government has planned for enactment of the Deposit Protection Agency Act in 2008, which might generate considerable impacts on the distribution of deposits between financial institutions and/or capital markets. The Bank, in this regard, has to develop some products and services under our Saving & Investing domain, in line with possible changes in customer demand in the future.

64 ANNUAL REPORT 2007 Consolidated Financial Statement as of December 31, 2007 ( Units: Million Baht ) Non- At call Less than 6 months to 1 year More than maturity Total 6 months 1 year to 5 years 5 years Items Financial Assets Cash - - - - - 18,051 18,051 Interbank and money market items 8,214 50,194 - - - - 58,408 Securities purchased under resale agreements - 10,700 - - - - 10,700 Investment 172 14,359 21,985 37,817 18,463 6,526 99,322 Loans 173,842 269,735 8,299 157,722 152,907 - 762,505 Accrued interest receivables 12 1,220 - 13 18 - 1,263 Customers’ liability under acceptances - 1,462 - - - - 1,462 Other assets - 1,086 - - - 4,207 5,293 Total 182,240 348,756 30,284 195,552 171,388 28,784 957,004 Financial Liabilities Deposits 434,373 313,778 33,812 1,859 - - 783,822 Interbank and money market items 4,615 8,127 - 1,143 300 - 14,185 Liabilities payable on demand 11,117 - - - - - 11,117 Borrowing - 38,198 877 301 18,724 - 58,100 Bank’s liability under acceptances - 1,462 - - - - 1,462 Other liabilities 121 2,481 234 80 - 9,023 11,939 Total 450,226 364,046 34,923 3,383 19,024 9,023 880,625 Liquidity-net (267,986) (15,290) (4,639) 192,169 152,364 19,761 76,379

ANNUAL REPORT 2007 65 Consolidated Financial Statement as of December 31, 2006 ( Units: Million Baht ) Non- At call Less than 6 months to 1 year More than maturity Total 6 months 1 year to 5 years 5 years Items Financial Assets Cash - - - - - 18,411 18,411 Interbank and money market items 5,594 75,009 2,164 - - - 82,857 Securities purchased under resale agreements - 22,200 - - - - 22,200 Investment 446 18,243 8,812 41,800 30,582 4,741 104,624 Loans 157,919 262,247 7,867 120,895 128,278 - 677,206 Accrued interest receivables 40 1,525 - 100 148 - 1,813 Customers’ liability under acceptances - 525 - - - - 525 Other assets - 2,188 - - - 4,347 6,535 Total 163,999 382,027 18,843 162,795 159,088 27,499 914,171 Financial Liabilities Deposits 386,880 177,733 174,645 7,002 - - 746,260 Interbank and money market items 4,588 10,734 1,067 1,100 200 - 17,689 Liabilities payable on demand 6,757 - - - - - 6,757 Borrowing - 27,614 1,811 1,865 19,174 - 50,464 Bank’s liability under acceptances - 525 - - - - 525 Other liabilities 109 2,944 520 78 - 5,738 9,389 Total 398,334 219,550 178,043 10,045 19,374 5,738 831,084 Liquidity-net (234,335) 162,477 (159,200) 152,750 139,634 21,761 83,087

66 ANNUAL REPORT 2007 • Operational Risk Management Operational Risk Management Procedures and Tools Operational risk refers to the risk of direct or indirect The Bank’s procedures for operational risk management losses, resulting from inadequate or failed internal processes, include risk identification, assessment, control and monitoring, people, operating and IT systems, or external events. as well as reporting. All of these processes are carried out periodically for accurate risk assessment and effective control Operational Risk Management Framework to ensure that risk is within acceptable levels. Operational Operational risk exists in all banking products, risk management tools and IT systems have been installed procedures, business units and IT systems, which can and improved upon continuously to effectively assess and potentially incur losses to the Bank, as well as to our monitor operational risk management. These tools include: customers and shareholders. The Bank has placed great • Risk and Control Self-Assessment (RCSA) emphasis on effective operational risk management, and The Bank employs self-assessment tools within our has continually improved our risk management framework business to identify significant operational risk, as well as to control and mitigate operational risk proactively. The to effectively control and prevent losses. Risk management objective of this framework is to implement effective expertise is disseminated to employees to create awareness operational risk management practices with a single and aid in efficient management of day-to-day operations, standard that is systematically implemented across the while a great emphasis has been placed upon proactive entire KASIKORNBANK FINANCIAL CONGLOMERATE. management of operational risk before any loss incurs. In In so doing, our management teams also gain an overall- addition, the results of our risk assessments and controls operational risk profile as essential information for their are regularly reported to the Risk Management Committee decision-making and maintaining compliance with BOT to present an overall operational risk profile. regulations, as well as other relevant laws and international • Operational Risk Event Database (RED) standards. The Bank has implemented a database system and developed procedures to collect and report on operational Operational Risk Management Structure risk events, along with analyses of the actual causes of a All of our staff are accountable for operational risk given risk and prevention of them. This helps avoid repetitions management according to framework and policies established of such events and is essential to developing situational by the Internal Risk Management Department, which is models for operational risk capital maintenance. The overseen by the Risk Management Committee that also operational risk event database is also used as an important reviews and approves the operational risk management input for Risk and Control Self-Assessment. framework and guidelines for implementation within the • Key Risk Indicators (KRI) Bank, plus at subsidiaries and associated companies that In addition to indicators used by almost a hundred operate in financial or support businesses. Meanwhile, the leading banks worldwide, the Bank has put into place Internal Audit Department, which is under the Audit Committee, various KRIs to effectively reflect the levels of risk arising is responsible for reviewing and validating the operational from operational systems, employees and processes. In risk management framework to ensure the effectiveness, cooperation with business units that are susceptible to the propriety and transparency of risk management within all of risk, operational risk management staff identify KRIs and our units. collect related information at regular intervals in order to monitor and track changes in the risk level over time, as well as serve as an early warning tool.

ANNUAL REPORT 2007 67 • Business Continuity Management (BCM) Overall operational risk reports on the Bank’s products, Throughout 2007, the Bank has worked continuously together with reports on operational risk events, are regularly on implementation of the Business Continuity Management presented to the Risk Management Committee to keep the (BCM) project, which we consider to potentially be a major Committee abreast of current operational risk profiles, ensuring tool to mitigate the severity and impacts of undesirable that our work in risk management is in line with the Bank’s incidents or factors that could cause interruptions to our main related policies and international practices. Furthermore, operational systems - examples of such emergencies include in order to meet Basel II standards on capital reserves for flooding, storms, fire, terrorist attacks, epidemics and political operational risk, the Bank has collected data and prepared unrest. We have established the “BCM Taskforce”, with situational modeling to facilitate computations of the necessary members representing all relevant departments to monitor capital reserves against this form of risk in the future. In progress in BCM activities. This taskforce ascertains that addition, the Bank continues to develop, improve and upgrade the BCM project is effective and appropriate for handling our operational risk management tools, procedures and any incidents that could occur. Although such incidents systems. could cause suspension of our normal operations, we have to ensure that all critical business functions can be carried • Other Risk Management out uninterrupted, and the normal functions can be resumed • Risks associated with Guarantees and Avals in a timely manner. Certain transactions with customers are in the form of In addition, other preparations include risk assessment, guarantees on their borrowing or performance, letters of credit, identification of critical business functions, business impact or avals on notes. Such transactions are considered to be analyses, maximum allowable outage, business continuity lending, which requires submission of collateral. Regarding management strategies selection, and business continuity risk control in this area, the Bank uses the same criteria as plans. We have also tested all contingency plans to ascertain used in the Bank’s normal credit approval processes. As of that critical business functions will continue to perform December 31, 2007, the Bank’s contingent obligations were normally, even during unexpected catastrophes. Baht 93,921 million, compared to Baht 75,481 million at the • IT Systems for Operational Risk Management end of December 2006. The Bank’s IT infrastructure has received continuous • Risks Incurred from Contractual Obligations on upgrades to support the development of our operational Derivative Instruments risk management framework, with the aim of enhancing The Bank conducts various derivative transactions as our efficiency in risk management procedures and tools. tools for risk hedging, including exchange rate, interest rate, In particular, these IT systems are important for recording data as well as the Bank’s securities price risks. To increase our for later analysis and reporting on operational risk events. income, the Bank also provides derivative instrument trading services to customers and business allies, as well as conducting Aside from this, the Bank has also undertaken our own derivative instrument trading in accordance with the assessments of operational risk in regards to new products Bank’s policies. As of December 31, 2007, the Bank had and working procedures, to ensure that they have acceptable foreign exchange contracts on the purchase side of Baht risk levels and that there are appropriate controls in place 338,139 million, with Baht 372,471 million on the sales side, before they are introduced to the Bank’s customers. As for compared to Baht 199,041 million and Baht 308,301 million, external fraud, the Bank has placed great importance on respectively, at the end of December 2006. In addition, the implementing security system to guard against risks inherent Bank had interest rate contracts on the purchase side of to major products such as credit cards, ATM cards and Baht 386,792 million and Baht 402,904 million on the sales cheques, etc., for which the Bank has a special unit tasked side, compared to Baht 228,869 million and Baht 212,955 with investigating irregular transactions and risk factors. The million, respectively, at the end of December 2006. Bank has also installed state-of-the-art IT equipment and systems to thwart, recover from and/or reduce losses incurred by such crime.

68 ANNUAL REPORT 2007 • Risks Related to Capital Adequacy - Market Discipline - we encourage transparency in informational As of December 31, 2007, the Bank’s capital adequacy disclosures to investors and all related parties concerning ratio, including the risk assets of Phethai AMC, was at 14.62 risk assessments associated with our banking operations. percent, which is significantly above the BOT minimum All these steps have been taken into consideration for requirement of 8.50 percent. To ensure that our current compliance with other international standards, such as capital level is fairly sufficient to absorb possible impacts International Accounting Standard No. 39 (IAS 39), to from any change in the economic situation and BOT’s ensure regulatory compliance and, moreover, best practice regulations, for the present and future, the Bank continues in risk management. to manage and monitor capital adequacy closely. • Performance Measurement using Risk-adjusted • Preparations for the ‘Basel II’ Capital Accord Return on Capital (RAROC) and Economic Profit In order to ensure that financial institutions’ capital Throughout 2007, the Bank continued with development reserves adequately cover and better reflect risks, the BOT of the Value-based Management (VBM) framework and efforts has designated that Basel II standards on capital adequacy, to put it into practice. With the VBM framework, the Bank is comprising Pillar 1 (Minimum Capital Requirements), Pillar 2 confident that the highest value creation will be achieved (Supervisory Review Processes) and Pillar 3 (Market for our shareholders through the adoption of Risk-adjusted Discipline), shall be implemented at banking institutions in Return on Capital (RAROC) and Economic Profit (EP). Thailand as of 2008 year-end. Economic Profit shows net profit after adjusting for both the The Basel II project has proceeded as planned under risk charge and the cost of capital. We have developed both the responsibility of the Basel II Project Taskforce, which is tools and procedures for the more accurate measurement composed of representatives from all relevant divisions. This of EP and value-added. This work included adjustments in is under the supervision of the Bank’s Risk Management our core internal management procedures, such as strategic Committee. The Bank has continuously enhanced both our planning, value-based business targeting, business planning, organizational structure and information systems to ensure and resource allocation, appropriate for and consistent with compliance with the Basel II standards. Capital per Basel II growth strategies for attainment of long-term value-added criteria has been reported to the Risk Management Committee and risk-based pricing strategy. Also, the Bank has started for internal management on a monthly basis since January measuring our performance and analyzing our value-based 2007, and starting in 2008, the Bank will submit parallel-run profits expressed in the dimensions of customer segments, reports on capital using current criteria along with the Basel product domains and individual products, by continually II-type report to the BOT on a quarterly basis for one-year in promoting common understanding towards key value drivers advance of full implementation effective by the end of 2008. among all concerned. Meanwhile, related business units have Also, in 2007, the Bank has representatives participating adopted the value-based analysis for assessment of business in a working team established by the Thai Bankers’ viability of products and investment projects, for the Association in cooperation with the Bank of Thailand. This measurement of returns at appropriate risk levels considered team has been an important channel for sharing information acceptable to the Bank. Next, we will move on to the adoption and experiences about Basel II preparations among commercial of VBM principles across the whole KASIKORNBANKGROUP. banks and the BOT, paving the way for a smooth transition to the new capital standards. For 2008, the Bank will continue our project to ensure ongoing development, whereas for Pillar 1 - the Minimum Capital Requirements - we will continue to enhance our risk management tools and ensure other preparations for advance criteria. For Pillar 2 - Supervisory Review Processes - the Bank will ensure continuing improvements in our risk management systems and procedures. And for Pillar 3

ANNUAL REPORT 2007 69

FINANCIAL REPORTS • Report of the Board of Directors’ Responsibilities for Financial Reports • Report of the Audit Committee • Audit Report of Certified Public Accountant • Financial Statements

KASIKORNBANKGROUP A financial service network that caters to our customers’ every financial need

Report of the Board of Directors’ Responsibilities for Financial Reports The Board of Directors of KASIKORNBANK PCL places useful to all shareholders and investors, in general. The significance on roles and responsibilities in supervising Board has also adopted and maintains an effective system corporate governance activities in compliance with the of risk management and internal controls so that the Bank Statement of Corporate Governance Principles. The Board can be reasonably assured that the financial records are is held accountable for the Bank’s Consolidated Financial accurate, complete and adequate to protect the Bank’s Statements and the Bank-only Financial Statements, assets. These controls also serve as preventive measures including financial data as shown in the Annual Report. against any significant operational mishandling of the Bank. The financial statements for the accounting year ending December 31, 2007 has been prepared under the generally The Board of Directors has appointed an Audit Committee accepted accounting standards in Thailand, in compliance comprising independent directors responsible for the quality with the Accountancy Act, B.E. 2543. The Bank has chosen of Bank’s financial reporting, the internal control systems as proper accounting policies that have always been strictly well as complete and appropriate disclosure of connected adhered to. The financial statements have also been prepared transactions and other processes. The opinion of the Audit with careful consideration to detail, using best estimations Committee with regard to these matters appears in the Report only where necessary. All material information has been of the Audit Committee in this annual report. sufficiently disclosed in the Notes to Financial Statements. The statements have been audited by qualified, independent The Board is of the view that the Bank has maintained authorized auditors whose unconditional opinions are stated an effective internal control system at an adequate and therein, so that the financial statements reflect the actual appropriate level of protection, which can assure the credibility financial standing and operating results of the Bank and of the Bank’s Consolidated Financial Statements of the subsidiaries over the past year, thus being transparent and Bank-only Financial Statements, as of December 31, 2007.

Banyong Lamsam Dr. Prasarn Trairatvorakul Chairman President

72 ANNUAL REPORT 2007 REPORT OF THE AUDIT COMMITTEE

The Audit Committee of KASIKORNBANK PCL • Review of the compliance management system under comprises with four independent board members of the Bank, statutory requirements for the commercial banking M.R. Sarisdiguna Kitiyakara as Chairman, Mr. Somchai business, including actions in compliance with regulatory Bulsook, Professor Khunying Suchada Kiranandana, and requirements of the Stock Exchange of Thailand, the Ms. Elizabeth Sam as members. During 2007 the Committee Anti-Money Laundering Law, and laws governing held eleven meetings to perform the following: consumer protection. This included joint meeting • At quarterly intervals, the Audit Committee reviewed sessions with responsible executives and internal the Bank’s financial statements with the Finance and auditors. Control Division executives, and with external auditors • Review of performance of external auditors during the of the Bank to discuss any observations they may have year, in order to propose recommendations for the raised. Moreover, the Committee held regular meetings annual appointment of external auditors and the annual with the external auditors without the presence of the audit fees for 2008, for consideration by the Board of executives in charge to discuss all the points arising Directors. from their observations. • Review of the internal control system with internal In sum, the Audit Committee has reviewed all aspects auditors in order to assess effectiveness and adequacy, of the Bank’s major operations and has had discussions including the control of IT security. The Committee with appropriate executives, internal and external auditors. brought up for consideration the monitoring and The Audit Committee is of the view that there has been reviewing report on the internal control system in appropriate and sufficient safeguard over the financial statement order to ensure that IT security and risk were under an preparation process and that the Bank’s financial statements appropriate control system. Management audit results, are deemed to be reliable, having been prepared in accordance conducted by internal auditors, had been brought up with generally accepted accounting standards, also taking for discussion at the meetings. account of appropriate risk management and internal audit • Approval of the audit master plan for internal audit and procedures. audit plan for 2008. • An ongoing oversight of risk management through a The Audit Committee has evaluated the performance of review of the assessment of the adequacy and the external auditors over the past year, and has decided to effectiveness of risk management processes regarding nominate KPMG Phoomchai Audit Ltd. and their designated credit risks, liquidity risks, market risks, as well as auditors to the Board of Directors as the external auditors foreign exchange and interest rate risks, through regular for the year 2008 and to recommend the annual audit fees, meeting sessions with executives of the Internal Risk for approval of the shareholders at the Annual General Management Department. Meeting. • An oversight of the efficiency and independence of risk asset review functions. • Review of connected and related transactions and to ensure that they are transactions in compliance with the Bank’s policy and the Statement of Corporate Governance Principles, with proper transparency and M.R. Sarisdiguna Kitiyakara information disclosure. Chairman of the Audit Committee January 31, 2008

ANNUAL REPORT 2007 73 FINANCIAL Statements

74 ANNUAL REPORT 2007 AUDIT REPORT OF CERTIFIED PUBLIC ACCOUNTANT To the Shareholders of KASIKORNBANK PUBLIC I conducted my audit in accordance with generally COMPANY LIMITED accepted auditing standards. Those standards require that I plan and perform the audit to obtain reasonable assurance I have audited the accompanying consolidated and about whether the financial statements are free of material Bank-only balance sheets as at 31 December 2007 and the misstatement. An audit includes examining, on a test basis, related statements of income, changes in shareholders’equity evidence supporting the amounts and disclosures in the and cash flows for the year then ended of KASIKORNBANK financial statements. An audit also includes assessing the PUBLIC COMPANY LIMITED and its subsidiaries and of accounting principles used and significant estimates made KASIKORNBANK PUBLIC COMPANY LIMITED, respectively. by management, as well as evaluating the overall financial The Bank’s management is responsible for the correctness statement presentation. I believe that my audit provides and completeness of the information presented in these a reasonable basis for my opinion. financial statements. My responsibility is to express an opinion on these financial statements based on my audit. In my opinion, the consolidated and the Bank-only The consolidated and the Bank-only financial statements financial statements referred to above present fairly, for the year ended 31 December 2006 of KASIKORNBANK in all material respects, the financial position as at PUBLIC COMPANY LIMITED and its subsidiaries, and of 31 December 2007 and the results of operations and KASIKORNBANK PUBLIC COMPANY LIMITED, respectively, cash flows for the year then ended of KASIKORNBANK were audited by another auditor whose report dated 21 PUBLIC COMPANY LIMITED and its subsidiaries, and February 2007 expressed an unqualified opinion on those of KASIKORNBANK PUBLIC COMPANY LIMITED, financial statements. As described in note 3 to the financial respectively, in accordance with generally accepted statements, the Bank-only financial statements for the year accounting principles. ended 31 December 2006 have been restated for the effects of the change in accounting policy for investments in subsidiaries and associates from the equity method of accounting to the cost method. I have audited the adjustments that were applied to the restatement of the Bank-only financial statements for the year ended 31 December 2006 and in my opinion these adjustments are appropriate and have Thirdthong Thepmongkorn been properly applied. Certified Public Accountant Registration No. 3787

KPMG Phoomchai Audit Ltd. Bangkok February 22, 2008

ANNUAL REPORT 2007 75 KASIKORNBANK PUBLIC COMPANY LIMITED AND SUBSIDIARIES BALANCE SHEETS

Baht Consolidated The Bank Notes 31 December 2007 31 December 2006 31 December 2007 31 December 2006 (Restated) ASSETS Cash 18,050,910,229 18,410,830,013 18,050,394,496 18,410,306,404 Interbank and money market items 5 Domestic items Interest bearing 23,955,521,230 1,375,213,647 23,839,948,330 1,321,941,570 Non-interest bearing 2,068,509,349 1,734,958,038 2,141,352,645 1,825,246,581 Foreign items Interest bearing 31,758,252,444 79,098,887,215 31,758,252,444 79,098,887,215 Non-interest bearing 941,653,023 632,913,627 941,653,023 632,913,627 Total Interbank and Money Market Items - net 58,723,936,046 82,841,972,527 58,681,206,442 82,878,988,993 Securities purchased under resale agreements 6 10,700,000,000 22,200,000,000 10,700,000,000 22,200,000,000 Investments 7, 27 Current investments - net 55,074,215,621 51,338,397,288 54,873,146,691 51,022,672,788 Long-term investments - net 39,862,883,907 50,165,758,536 39,569,807,339 49,298,641,340 Investments in subsidiaries and associated companies - net 588,881,492 482,468,003 9,357,459,219 9,740,599,219 Total Investments - net 95,525,981,020 101,986,623,827 103,800,413,249 110,061,913,347 Loans and accrued interest receivables 8, 9 Loans 762,504,956,478 677,206,708,758 761,304,679,205 673,336,007,420 Accrued interest receivables 1,263,006,905 1,812,524,654 1,246,446,594 1,628,509,275 Total Loans and Accrued Interest Receivables 763,767,963,383 679,019,233,412 762,551,125,799 674,964,516,695 Less Allowance for doubtful accounts 10 (24,217,164,752) (31,703,046,675) (22,616,459,945) (26,712,345,878) Less Revaluation allowance for debt restructuring 11 (1,634,565,710) (1,289,861,157) (1,630,308,817) (1,259,159,749) Total Loans and Accrued Interest Receivables - net 737,916,232,921 646,026,325,580 738,304,357,037 646,993,011,068 Properties foreclosed - net 12 15,365,479,015 16,495,560,785 11,252,507,216 11,639,583,138 Customers’ liability under acceptances 1,461,617,321 525,174,569 1,461,617,321 525,174,569 Premises and equipment - net 14 24,533,966,976 22,292,665,684 23,982,109,592 22,003,601,511 Intangible assets - net 15 6,818,580,952 5,318,301,809 5,610,638,942 3,971,149,316 Derivative revaluation 10,639,678,300 9,827,153,438 10,639,678,300 9,827,153,438 Other assets - net 14,781,395,369 9,584,138,480 11,666,418,362 8,359,596,812 Total Assets 994,517,778,149 935,508,746,712 994,149,340,957 936,870,478,596

The accompanying notes are an integral part of these financial statements.

76 ANNUAL REPORT 2007 KASIKORNBANK PUBLIC COMPANY LIMITED AND SUBSIDIARIES BALANCE SHEETS

Baht Consolidated The Bank Notes 31 December 2007 31 December 2006 31 December 2007 31 December 2006 (Restated) LIABILITIES AND SHAREHOLDERS’ EQUITY Deposits 16 Deposits in baht 774,692,309,728 740,206,038,844 775,278,056,653 741,274,153,739 Deposits in foreign currencies 9,129,597,621 6,053,801,858 9,129,597,621 6,053,801,858 Total Deposits 783,821,907,349 746,259,840,702 784,407,654,274 747,327,955,597 Interbank and money market items 17 Domestic items Interest bearing 11,383,205,288 14,860,644,100 11,516,209,208 15,254,910,562 Non-interest bearing 2,611,442,211 1,611,005,942 2,614,103,480 1,613,577,609 Foreign items Interest bearing 131,673 523,464,526 131,673 523,464,526 Non-interest bearing 190,267,593 694,379,641 190,267,593 694,379,641 Total Interbank and Money Market Items 14,185,046,765 17,689,494,209 14,320,711,954 18,086,332,338 Liabilities payable on demand 11,116,765,544 6,757,266,252 11,116,765,544 6,757,266,252 Borrowings Short-term borrowings 18 39,074,886,887 29,425,530,994 38,678,337,602 29,613,900,000 Long-term borrowings 19 19,024,904,223 21,038,953,347 19,024,904,223 21,038,953,347 Total Borrowings 58,099,791,110 50,464,484,341 57,703,241,825 50,652,853,347 Bank’s liability under acceptances 1,461,617,321 525,174,569 1,461,617,321 525,174,569 Derivative revaluation 6,593,620,276 6,611,065,357 6,593,620,276 6,611,065,357 Other liabilities 19,243,695,278 18,963,102,758 18,410,592,161 18,491,808,220 Total Liabilities 894,522,443,643 847,270,428,188 894,014,203,355 848,452,455,680

The accompanying notes are an integral part of these financial statements.

ANNUAL REPORT 2007 77 KASIKORNBANK PUBLIC COMPANY LIMITED AND SUBSIDIARIES BALANCE SHEETS

Baht Consolidated The Bank Notes 31 December 2007 31 December 2006 31 December 2007 31 December 2006 (Restated) Shareholders’ equity Share capital 21 Authorized share capital 3,048,614,697 ordinary shares, Baht 10 par value 30,486,146,970 30,486,146,970 30,486,146,970 30,486,146,970 Issued and paid-up share capital 2,388,202,317 ordinary shares, Baht 10 par value 23,882,023,170 23,882,023,170 2,382,147,733 ordinary shares, Baht 10 par value 23,821,477,330 23,821,477,330 Premium on ordinary shares 18,012,978,628 17,903,743,235 18,012,978,628 17,903,743,235 Appraisal surplus on asset revaluation 14 9,741,700,884 9,883,084,524 9,741,700,884 9,883,084,524 Revaluation surplus (deficit) on investments 7 568,261,240 (156,538,488) 567,324,250 (159,689,649) Retained earnings Appropriated Legal reserve 23 2,920,000,000 2,160,000,000 2,920,000,000 2,160,000,000 Unappropriated 44,870,320,954 34,626,532,765 45,011,110,670 34,809,407,476 99,995,284,876 88,238,299,366 100,135,137,602 88,418,022,916 Minority interests 49,630 19,158 - - Total Shareholders’ Equity 99,995,334,506 88,238,318,524 100,135,137,602 88,418,022,916 Total Liabilities and Shareholders’ Equity 994,517,778,149 935,508,746,712 994,149,340,957 936,870,478,596

Off-balance sheet items - contingencies 28 Aval to bills and guarantees of loans 1,142,268,369 639,151,298 1,142,268,369 639,151,298 Liability under unmatured import bills 5,674,257,724 5,162,800,555 5,674,257,724 5,162,800,555 Letters of credit 20,496,880,543 19,200,000,401 20,496,880,543 19,200,000,401 Other contingencies 1,703,175,812,080 1,125,293,704,165 1,702,844,824,803 1,125,098,630,625

(Pol. Gen. Pow Sarasin) (Banthoon Lamsam) Vice Chairman Director and Chief Executive Officer

The accompanying notes are an integral part of these financial statements.

78 ANNUAL REPORT 2007 KASIKORNBANK PUBLIC COMPANY LIMITED AND SUBSIDIARIES STATEMENTS OF INCOME FOR THE YEARS ENDED 31 DECEMBER 2007 AND 2006 Baht Consolidated The Bank Notes 2007 2006 2007 2006 (Restated) Interest and dividend income Loans 45,842,526,406 42,410,591,935 46,494,896,375 42,692,392,759 Interbank and money market items 3,840,564,048 4,487,164,570 3,839,126,538 4,481,960,163 Hire purchase and financial lease 1,183,121,874 465,496,151 - - Investments 4,650,150,821 4,446,501,158 5,509,587,924 4,714,254,864 Total Interest and Dividend Income 55,516,363,149 51,809,753,814 55,843,610,837 51,888,607,786 Interest expense Deposits 15,946,420,441 14,554,369,552 15,956,732,825 14,558,171,220 Interbank and money market items 207,608,572 512,838,642 219,291,720 532,721,822 Short-term borrowings 902,425,544 1,001,797,591 917,700,987 1,004,034,378 Long-term borrowings 1,028,808,707 1,128,151,479 1,028,749,233 1,128,151,479 Total Interest Expense 18,085,263,264 17,197,157,264 18,122,474,765 17,223,078,899 Net income from interest and dividends 37,431,099,885 34,612,596,550 37,721,136,072 34,665,528,887 Bad debt and doubtful accounts 25 4,289,972,963 651,534,903 4,279,506,141 1,053,009,665 Loss on debt restructuring 26 1,596,768,338 4,767,110,670 1,379,938,751 4,327,030,907 Net income from interest and dividends after bad debt and doubtful accounts and loss on debt restructuring 31,544,358,584 29,193,950,977 32,061,691,180 29,285,488,315 Non-interest income Gain on investments 7 1,176,103,020 210,923,046 1,080,251,125 207,132,935 Share of profit from investments on equity method 7 120,034,778 177,690,489 - - Fees and service income Acceptances, aval and guarantees 1,008,829,453 810,752,253 1,008,829,453 810,752,253 Others 12,333,753,499 9,826,666,141 10,966,820,582 8,788,352,932 Gain on exchanges 2,717,533,649 1,670,153,565 2,717,533,649 1,670,153,565 Other income 1,540,927,633 1,458,694,119 958,051,119 1,249,534,910 Total Non-interest Income 18,897,182,032 14,154,879,613 16,731,485,928 12,725,926,595 Non-interest expenses Personnel expenses 9,344,190,639 8,177,502,017 8,636,041,267 7,612,771,901 Premises and equipment expenses 14 6,169,664,771 5,222,199,290 5,993,167,001 5,068,566,417 Taxes and duties 2,420,454,466 2,241,101,482 2,367,296,326 2,179,005,408 Fees and service expenses 3,333,155,767 2,931,062,620 3,150,559,731 2,786,761,289 Directors’ remuneration 86,666,078 86,167,705 80,666,078 80,127,705 Contributions to Financial Institutions Development Fund 3,042,403,837 2,768,801,015 3,042,403,837 2,768,801,015 Other expenses 4,632,588,752 4,133,763,165 4,265,420,650 3,792,994,678 Total Non-interest Expenses 29,029,124,310 25,560,597,294 27,535,554,890 24,289,028,413 Income before income tax 21,412,416,306 17,788,233,296 21,257,622,218 17,722,386,497 Income tax expense 6,407,529,880 4,125,618,483 6,254,104,387 3,981,150,189 Net income before minority interests 15,004,886,426 13,662,614,813 15,003,517,831 13,741,236,308 (Income) loss of minority interests (7,068) 1,426,379 - - Net income 15,004,879,358 13,664,041,192 15,003,517,831 13,741,236,308 Basic earnings per share 21 6.28 5.74 6.28 5.77 Weighted average number of ordinary shares (shares) 21 2,387,438,198 2,381,473,532 2,387,438,198 2,381,473,532

(Pol. Gen. Pow Sarasin) (Banthoon Lamsam) Vice Chairman Director and Chief Executive Officer

ANNUAL REPORT 2007 79 KASIKORNBANK PUBLIC COMPANY LIMITED AND SUBSIDIARIES

80 STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY FOR THE YEARS ENDED 31 DECEMBER 2007 AND 2006 ANNUAL REPORT2007 Baht Consolidated Issued and Premium on Appraisal Revaluation (Deficit) Retained Earnings Minority Total Paid-up Share Share Capital Surplus on Asset Surplus on Appropriated Unappropriated Interests Notes Capital Revaluation Investments Legal Reserve

Beginning balance as of 31 December 2005 23,732,936,670 17,737,192,156 10,024,386,669 (529,067,201) 1,470,000,000 25,678,644,954 1,508,034 78,115,601,282 Appraisal surplus on asset revaluation - - (141,302,145) - - 141,302,145 - - Revaluation surplus on investments - - - 372,528,713 - - - 372,528,713 Net gain (loss) not recognised in the statement of income - - (141,302,145) 372,528,713 - 141,302,145 - 372,528,713 Ordinary shares 88,540,660 ------88,540,660 Premium on ordinary shares - 166,551,079 - - - - - 166,551,079 Legal reserve - - - - 690,000,000 (690,000,000) - - Reduction in the accumulated deficit ------(62,497) (62,497) Net income (loss) - - - - - 13,664,041,192 (1,426,379) 13,662,614,813 Dividend paid 24 - - - - - (4,167,455,526) - (4,167,455,526) Ending balance as of 31 December 2006 23,821,477,330 17,903,743,235 9,883,084,524 (156,538,488) 2,160,000,000 34,626,532,765 19,158 88,238,318,524

Beginning balance as of 31 December 2006 23,821,477,330 17,903,743,235 9,883,084,524 (156,538,488) 2,160,000,000 34,626,532,765 19,158 88,238,318,524 Appraisal surplus on asset revaluation - - (136,685,596) - - 136,685,596 - - Others - - (4,698,044) - - 40,723,468 - 36,025,424 Revaluation surplus on investments - - - 724,799,728 - - 37,540 724,837,268 Net gain (loss) not recognised in the statement of income - - (141,383,640) 724,799,728 - 177,409,064 37,540 760,862,692 Ordinary shares 60,545,840 ------60,545,840 Premium on ordinary shares - 109,235,393 - - - - - 109,235,393 Legal reserve - - - - 760,000,000 (760,000,000) - - Net income (loss) - - - - - 15,004,879,358 (7,068) 15,004,872,290 Dividend paid 24 - - - - - (4,178,500,233) - (4,178,500,233) Ending balance as of 31 December 2007 23,882,023,170 18,012,978,628 9,741,700,884 568,261,240 2,920,000,000 44,870,320,954 49,630 99,995,334,506

The accompanying notes are an integral part of these financial statements. KASIKORNBANK PUBLIC COMPANY LIMITED AND SUBSIDIARIES STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY FOR THE YEARS ENDED 31 DECEMBER 2007 AND 2006 Baht The Bank (Restated) Issued and Premium on Appraisal Revaluation (Deficit) Retained Earnings Paid-up Share Share Capital Surplus on Asset Surplus on Appropriated Total Notes Capital Revaluation Investments Legal Reserve Unappropriated Beginning balance as of 31 December 2005 23,732,936,670 17,737,192,156 10,024,386,669 (529,067,201) 1,470,000,000 25,678,644,954 78,114,093,248 Change in accounting policy 3 - - - (126,008) - 105,679,595 105,553,587 Beginning balance as of 31 December 2005, restated 23,732,936,670 17,737,192,156 10,024,386,669 (529,193,209) 1,470,000,000 25,784,324,549 78,219,646,835 Appraisal surplus on asset revaluation - - (141,302,145) - - 141,302,145 - Revaluation surplus on investments - - - 369,503,560 - - 369,503,560 Net gain (loss) not recognised in the statement of income - - (141,302,145) 369,503,560 - 141,302,145 369,503,560 Ordinary shares 88,540,660 - - - - - 88,540,660 Premium on ordinary shares - 166,551,079 - - - - 166,551,079 Legal reserve - - - - 690,000,000 (690,000,000) - Net income - - - - - 13,741,236,308 13,741,236,308 Dividend paid 24 - - - - - (4,167,455,526) (4,167,455,526) Ending balance as of 31 December 2006, restated 23,821,477,330 17,903,743,235 9,883,084,524 (159,689,649) 2,160,000,000 34,809,407,476 88,418,022,916 Beginning balance as of 31 December 2006 23,821,477,330 17,903,743,235 9,883,084,524 (156,538,488) 2,160,000,000 34,626,532,765 88,238,299,366 Change in accounting policy 3 - - - (3,151,161) - 182,874,711 179,723,550 Beginning balance as of 31 December 2006, restated 23,821,477,330 17,903,743,235 9,883,084,524 (159,689,649) 2,160,000,000 34,809,407,476 88,418,022,916 ANNUAL REPORT2007 Appraisal surplus on asset revaluation - - (136,685,596) - - 136,685,596 - Others - - (4,698,044) - - - (4,698,044) Revaluation surplus on investments - - - 727,013,899 - - 727,013,899 Net gain (loss) not recognised in the statement of income Ordinary shares - - (141,383,640) 727,013,899 - 136,685,596 722,315,855

Ordinary shares 60,545,840 - - - - - 60,545,840

81 Premium on ordinary shares - 109,235,393 - - - - 109,235,393 Legal reserve - - - - 760,000,000 (760,000,000) - Net income - - - - - 15,003,517,831 15,003,517,831 Dividend paid 24 - - - - - (4,178,500,233) (4,178,500,233) Ending balance as of 31 December 2007 23,882,023,170 18,012,978,628 9,741,700,884 567,324,250 2,920,000,000 45,011,110,670 100,135,137,602

The accompanying notes are an integral part of these financial statements. KASIKORNBANK PUBLIC COMPANY LIMITED AND SUBSIDIARIES STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED 31 DECEMBER 2007 AND 2006 Baht Consolidated The Bank Notes 2007 2006 2007 2006 (Restated) CASH FLOWS FROM OPERATING ACTIVITIES Net income 15,004,879,358 13,664,041,192 15,003,517,831 13,741,236,308 Add(Less) Adjustments to reconcile net income to net cash from operating activities Depreciation and amortization 1,967,529,914 1,736,106,007 1,847,547,104 1,645,172,282 Bad debt and doubtful accounts 4,289,972,963 651,534,903 4,279,506,141 1,053,009,665 Loss on debt restructuring 1,596,768,338 4,767,110,670 1,379,938,751 4,327,030,908 Interest income from amortization of revaluation allowance for debt restructuring (168,114,408) (135,338,363) (136,663,966) (83,731,450) Gain on foreign exchange translation of long-term loans (453,214,487) (1,000,205,918) (453,214,487) (1,000,205,918) (Gain) loss on revaluation of investments (50,351,988) 110,716,524 (50,351,988) 110,716,524 Reversal of loss on impairment of investments in securities (102,243,344) (172,987,030) (94,056,921) (169,631,353) Amortization of goodwill 143,609,091 143,593,255 - - Gain on disposal of securities for investment (690,348,664) (55,325,191) (687,832,854) (23,191,178) (Discount) premium amortization on debt instruments (323,493,423) 314,153,164 (318,624,024) 325,534,237 Loss on impairment of investments in receivables 106,756,662 88,784,579 79,072,931 880,602 Loss on impairment of foreclosed properties 545,080,638 612,297,898 428,010,197 540,536,746 Reversal of loss on impairment of other assets (44,985,334) (62,391,733) (41,317,214) (56,269,724) Reversal of loss on impaiment of intangible assets - (45,689,000) - (45,689,000) Loss from a capital reduction in a subsidiary - - 43,140,000 - (Gain) loss on disposal of premises and equipment (800,668) (21,663,003) 5,909,587 (1,785,597) Reversal of loss on impaiment of premises and equipment - (110,793,723) - - (Gain) loss on transfer of financial assets (9,834,159) 15,699,695 (5,055,426) - Share of profit from investments on equity method (120,034,778) (177,690,489) - - Dividend income from associated companies 48,785,000 121,194,040 - - Amortization of discount on promissory note receivables (14,439,716) - (5,056,154) - Amortization of discount on debentures 3,462,416 3,785,346 3,462,416 3,785,346 Decrease (increase) in accrued interest receivables 549,517,749 (67,165,833) 382,062,681 (309,566,266) (Decrease) increase in accrued interest payables 933,952,108 (395,442,510) 986,940,125 (396,307,591) (Decrease) increase in accrued interest payables (735,046,377) 2,332,754,424 (741,835,959) 2,344,234,508 Increase (decrease) in other accrued expenses 2,107,384,983 (1,187,190,482) 1,916,426,486 150,537,285 Increase in other reserves 405,114,152 540,504,720 405,114,152 540,504,720 Income (loss) of minority interests 7,068 (1,426,379) - - Net income from operations before changes in operating assets and liabilities 24,989,913,094 21,668,966,763 24,226,639,409 22,696,801,054

The accompanying notes are an integral part of these financial statements.

82 ANNUAL REPORT 2007 KASIKORNBANK PUBLIC COMPANY LIMITED AND SUBSIDIARIES STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED 31 DECEMBER 2007 AND 2006 Baht Consolidated The Bank Notes 2007 2006 2007 2006 (Restated) (Increase) decrease in operating assets Interbank and money market items (assets) 24,122,294,357 (16,870,298,346) 24,202,040,427 (16,967,758,163) Securities purchased under resale agreements 11,500,000,000 (12,700,000,000) 11,500,000,000 (12,700,000,000) Investment for trading 3,592,670,599 (5,576,967,672) 3,592,670,596 (5,576,967,669) Loans (102,288,154,187) (62,454,615,364) (100,638,984,929) (60,603,213,844) Properties foreclosed 4,902,786,458 5,247,988,095 3,615,897,603 4,392,650,133 Other assets (6,894,827,107) (7,595,496,373) (5,055,718,068) (7,530,488,527) Increase (decrease) in operating liabilities Deposits 37,562,066,647 60,647,867,600 37,079,698,677 60,585,864,768 Interbank and money market items (liabilities) (3,504,447,444) (84,286,151) (3,765,620,384) 571,518,137 Liabilities payable on demand 4,359,499,292 966,535,024 4,359,499,292 966,535,024 Short-term borrowings 9,649,355,893 19,803,930,994 9,064,437,602 19,992,300,000 Other liabilities (1,220,796,453) 6,733,582,912 (1,404,356,224) 5,335,003,119 Net Cash Provided by Operating Activities 6,770,361,149 9,787,207,482 6,776,204,001 11,162,244,032 CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from disposal of available for sale investments 96,824,599,623 78,957,574,523 96,802,608,033 78,905,464,701 Proceeds from redemption of held to maturity debt instruments 4,641,580,573 22,315,228,390 4,152,580,573 21,215,228,390 Proceeds from disposal of general investments 603,422,935 763,952,659 592,854,454 757,342,535 Proceeds from a capital reduction in a subsidiary - - 440,000,000 37,104,245 Purchase of available for sale investments (97,452,897,004) (98,370,974,871) (97,437,897,004) (98,350,789,371) Proceeds from collection of investments in receivables 226,079,048 153,001,276 33,627,649 46,325,630 Purchase of held to maturity debt instruments (253,183,413) (3,367,141,295) (253,183,413) (2,497,988,576) Purchase of general investments (29,197,850) (71,530,425) (129,197,850) (71,531,682) Purchase of investments in subsidiaries - (4,300,000) - (694,300,000) Proceeds from disposal of premises and equipment 14,687,689 459,697,876 6,891,975 5,798,617 Purchase of premises and equipment (3,552,353,644) (2,310,641,650) (3,208,135,924) (2,267,501,106) Purchase of intangible assets (2,580,002,837) (1,455,155,256) (2,563,248,349) (1,390,616,838) Net Cash Used in Investing Activities (1,557,264,880) (2,930,288,773) (1,563,099,856) (4,305,463,455) CASH FLOWS FROM FINANCING ACTIVITIES Decrease in long-term borrowings (1,564,297,053) - (1,564,297,053) - Increase in share capital 60,545,840 88,540,660 60,545,840 88,540,660 Increase in premium on share capital 109,235,393 166,551,078 109,235,393 166,551,078 Payment of dividend (4,178,500,233) (4,167,455,525) (4,178,500,233) (4,167,455,525) Net Cash Used in Financing Activities (5,573,016,053) (3,912,363,787) (5,573,016,053) (3,912,363,787) Net (decrease) increase in cash and cash equivalents (359,919,784) 2,944,554,922 (359,911,908) 2,944,416,790 Cash and cash equivalents at beginning of the year 4 18,410,830,013 14,912,704,474 18,410,306,404 14,912,318,996 Cash and cash equivalents at end of the year 4 18,050,910,229 17,857,259,396 18,050,394,496 17,856,735,786 SUPPLEMENTAL DISCLOSURES OF CASH FLOWS INFORMATION Cash paid during the year Interest expense 18,820,309,641 14,864,402,839 18,864,310,724 14,878,844,390 Income tax 4,322,775,781 4,288,585,078 4,163,131,239 4,114,234,980

The accompanying notes are an integral part of these financial statements.

ANNUAL REPORT 2007 83 KASIKORNBANK PUBLIC COMPANY LIMITED AND SUBSIDIARIES NOTES TO THE FINANCIAL STATEMENTS FOR THE YEARS ENDED 31 DECEMBER 2007 AND 2006 (RESTATED)

These notes form an integral part of the financial statements. branches covering all parts of Thailand and certain major 1 GENERAL INFORMATION parts of the world. As of 31 December 2007 and 2006, the KASIKORNBANK PUBLIC COMPANY LIMITED, Bank had a total staff of 12,320 and 11,219 persons, (“the Bank”), is a registered public company located in the respectively. Kingdom of Thailand and listed on the Stock Exchange The consolidated financial statements of the Bank for the of Thailand. The registered office of the Bank is at 1 Soi years ended 31 December 2007 and 2006 consist of the Bank Kasikornthai, Ratburana Road, Bangkok. and its subsidiaries. Details of the Bank’s subsidiaries are The principal activity of the Bank is commercial banking as follows: and the Bank conducts its businesses through a network of % Shareholding of the Bank Directly and Indirectly 2007 2006 Phethai Asset Management Co., Ltd. (“Phethai-AMC”) 100.00 100.00 Kasikorn Research Center Co., Ltd. (“KResearch”) 100.00 100.00 Kasikorn Asset Management Co., Ltd. (“KAsset”) 100.00 100.00 Kasikorn Securities Public Co., Ltd. (“KSecurities”) 99.99 99.99 Kasikorn Factoring Co., Ltd. (“KFactoring”) 100.00 100.00 Kasikorn Leasing Co., Ltd. (“KLeasing”) 100.00 100.00 Progress Land and Buildings Co., Ltd. (“PLB”) 100.00 100.00 KHAO KLA Venture Capital Management Co., Ltd. (“KHAO KLA”) * 100.00 - K-SME Venture Capital Co., Ltd. (“K-SME”) 100.00 - * Kasikorn Asset Management Co., Ltd. directly and indirectly holds 100% shares in KHAO KLA Venture Capital Management Co., Ltd. Phethai Asset Management Company Limited is a company Kasikorn Asset Management Company Limited is a registered in the Kingdom of Thailand on 24 September 1999, company which was registered in the Kingdom of Thailand on was approved by the Bank of Thailand (BoT) on 13 October 18 March 1992 and is located at 252/6 Muang Thai-Phatra 1999 to register as an asset management company under Office Tower 1, Floor 30-32, office No. 252/38-41, the Ministerial Regulation (B.E. 2541) issued with regard to the Ratchadaphisek Road, Huaykwang, Bangkok. The company’s provisions of the Asset Management Company Act (B.E. 2541). main business is assets and funds management. The company is located at 252/6 Muang Thai-Phatra Office Kasikorn Securities Public Company Limited is a company Tower 1, Floor 13-14, Ratchadaphisek Road, Huaykwang, which was registered in the Kingdom of Thailand on 13 August Bangkok and was established with the objective of managing 1974, and is located at 400/22 Kasikornbank Building, Floor 19, substandard assets transferred from the Bank. Phaholyothin Road, Samsennai, Phayathai, Bangkok. The Kasikorn Research Center Company Limited is a company company’s main businesses are securities and investment which was registered in the Kingdom of Thailand on 16 banking. December 1994, and is located at 400/22 Kasikornbank Kasikorn Factoring Company Limited is a company which Building, Floor 9 Phaholyothin Road, Samsennai, Phayathai, was registered in the Kingdom of Thailand on 9 July 1990, Bangkok. The company’s main business is to support the and is located at 252/20 Muang Thai-Phatra Tower 1, Floor 16, Bank with research work and public relations. Ratchadapisek Road, Huaykwang, Bangkok. The company was established to furnish commercial financial services to businesses and provide factoring, finance leases, operating leases and hire purchases.

84 ANNUAL REPORT 2007 Kasikorn Leasing Company Limited is a company which and with the Bank of Thailand (BoT) directive dated 10 May was registered in the Kingdom of Thailand on 24 December 2001, prescribing the format for balance sheets and profit 2004, and is located at 400/22 Kasikornbank Building, Floor and loss accounts for commercial banks and in accordance 17, Phaholyothin Road, Samsennai, Phayathai, Bangkok. The with Thai Accounting Standards (“TAS”) including related company’s main businesses are leasing and hire purchases. interpretations and guidelines promulgated by the Federation Progress Land and Buildings Company Limited is a of Accounting Professions and in conformity with generally company which was registered in the Kingdom of Thailand accepted accounting principles in Thailand. on 18 November 1999, and is located at 252/9 Muang The financial statements are presented in Thai Baht and Thai-Phatra Tower 1, Floor 5, Ratchadapisek Road, Huaykwang, prepared under the historical cost basis except as disclosed Bangkok. The company was established to receive, manage in the accounting policies. and sell properties that have been foreclosed as well as the The financial statements issued for Thai reporting premises of Phatra Thanakit Public Company Limited. purposes are prepared in the Thai language. This English KHAO KLA Venture Capital Management Company Limited translation of the financial statements has been prepared is a company which was registered in the Kingdom of Thailand for the convenience of readers not conversant with the Thai on 26 July 2007, and is located at 252/38 Muang Thai-Phatra language. Tower 1, Floor 30, Ratchadapisek Road, Huaykwang, Bangkok. The preparation of financial statements in conformity with The company’s main business is securities investment TAS and generally accepted accounting principles in Thailand management. requires management to make judgements, estimates and K-SME Venture Capital Company Limited is a company assumptions that affect the application of policies and reported which was registered in the Kingdom of Thailand on 12 amounts of assets, liabilities, income and expenses. The October 2007, and is located at 252/38 Muang Thai-Phatra estimates and associated assumptions are based on historical Tower 1, Floor 30, Ratchadapisek Road, Huaykwang, Bangkok. experience and various other factors that are believed to be The company’s main business is venture capital. reasonable under the circumstances, the results of which The consolidated financial statements exclude the financial form the basis of making the judgements about carrying statements of subsidiaries whose financial statements are amounts of assets and liabilities that are not readily apparent not material to the Bank. The financial position and results from other sources. of operations of subsidiaries, which are not included in The estimates and underlying assumptions used in the the consolidated financial statements, are presented as preparation of these financial statements are reviewed on supplementary information in the accompanying Note 7 to an ongoing basis. Revisions to accounting estimates are these financial statements. recognized in the period in which the estimate is revised The consolidated and the Bank only financial statements if the revision affects only that period, or in the period of the include the accounts of all branches; domestic and outside revision and future periods if the revision affects both current Thailand. Interbranch transactions have been eliminated. and future periods.

2 BASIS OF PREPARATION OF THE 3 SIGNIFICANT ACCOUNTING POLICIES FINANCIAL STATEMENTS 3.1 Basis of consolidation The consolidated and Bank-only financial statements The consolidated financial statements comprise the Bank, are prepared in accordance with the regulations of the its subsidiaries and its interest in associates. Significant Stock Exchange of Thailand (SET), dated 22 January 2001, intra-group transactions between the Bank and its subsidiaries regarding the “Preparation and Filing of Financial Statements are eliminated on consolidation. and Reports Concerning the Financial Status and Results Subsidiaries of Business Operations of Listed Companies” (B.E. 2544), Subsidiaries are those entities controlled by the Bank. Control exists when the Bank has the power, directly and

ANNUAL REPORT 2007 85 indirectly, to govern the financial and operating policies of an 3.2 Change in accounting policy entity so as to obtain benefits from its activities. The financial The following change of accounting policy by the Bank has statements of subsidiaries are included in the consolidated no effect on the consolidated financial statements of the Bank. financial statements from the date that control commences Until 31 December 2006, the Bank accounted for its until the date that control ceases. investments in subsidiaries and associates in the Bank-only Associates financial statements using the equity method. Associates are those entities in which the Bank has On 11 October 2006, the Federation of Accounting significant influence, but not control, over the financial and Professions (FAP) announced that the Thai Accounting operating policies. The consolidated financial statements Standard No. 44 (TAS No. 44) “Consolidated Financial include the Bank’s share of the total recognized gains and Statements and Accounting for Investments in Subsidiaries” losses of associates on an equity accounting basis, from the is to be revised. FAP announcement No. 26/2006 requires a date that significant influence commences until the date that parent company which has investments in a subsidiary company, significant influence ceases. When the Bank’s share of losses an entity under joint control, or an associate company, which exceeds its interest in an associate, the Bank’s carrying amount is not classified as a “held for sale” investment, to record such of investment is reduced to nil and recognition of further losses investment in accordance with either the cost method or with is discontinued except to the extent that the Bank has incurred the recognition and measurement basis for financial instruments legal or constructive obligations or made payments on behalf (when an announcement is made), instead of the equity of an associate. method currently used. Business combinations Starting from 1 January 2007, the Bank has, accordingly, Business combinations are accounted for using the changed its accounting policy for its investments in subsidiaries purchase method. The cost of an acquisition is measured and associates in the Bank-only financial statements from the at the fair value of the assets given at the date of exchange, equity method to the cost method. The change in accounting plus cost directly attributable to the acquisition. policy has been applied retrospectively and the Bank-only 2006 financial statements, which are included in the Bank-only 2007 financial statements for comparative purposes, have been restated accordingly.

The effects of the change in accounting policy on the Bank-only annual 2006 financial statements are as follows: ( Million Baht ) Increase (decrease) 2007 2006 Retained earnings as at 1 January 183 106 Revaluation Surplus on Investments as at 1 January (3) (1) Shareholders’ equity / Total assets as at 1 January 180 105 For the Years Ended 31 December Investment in shares of subsidiaries and associates as at 1 January 180 105 Dividend income from subsidiaries and associates for the year ended 31 December 387 Share of profits from investments accounted for using the equity method, net, for the year ended 31 December (312) Total assets / Shareholders’ equity as at 31 December 180 Net income for the year ended 31 December 77 Earnings per share (Baht) 0.03

86 ANNUAL REPORT 2007 3.3 Cash and cash equivalents An impairment review for investments is carried out Cash and cash equivalents represent cash in hand and when there is a factor indicating that an investment might cash items in the process of collection. be impaired. Losses on impairment for all classifications of 3.4 Investments investments are charged to the statement of income. Investments in subsidiaries and associates Interest and dividend income from investments is recognized Investments in subsidiaries and associates in the Bank-only on an accrual basis. Gains or losses on sales of securities are financial statements are accounted for using the cost method. recognized in the statement of income upon disposal. Interest (See change in accounting policy disclosure in note 3.2) income from investments in receivables is recognized by using Investments in other debt and equity securities the effective yield method. Investments in debt instruments or marketable equity Investments in marketable equity securities classified as securities held for trading are classified as trading investments trading investments and available-for-sale investments are and are stated at fair value, with any resultant gain or loss stated at fair value based on the last Stock Exchange of being recognized in the statement of income. Thailand (SET) bid prices as of the end of the year. Investments in debt instruments that the Bank and its Investments in marketable unit trusts classified as trading subsidiaries intend and are able to hold to maturity are investments and available-for-sale investments are stated classified as held-to-maturity investments and are stated at fair value based on the net assets value as of the end of at amortized cost after deduction of allowance for impairment. the year. The difference between the acquisition cost and redemption Investments in government securities and state enterprise value of such debt securities is amortized using the effective securities guaranteed by the government, classified as trading interest rate method over the period to maturity. investments or available-for-sale investments, are stated at Investments in debt instruments or marketable equity fair value based on the Thai Bond Market Association securities other than those securities held for trading or Government Bond Yield Curve as of the end of the year. intended to be held to maturity are classified as available- State enterprise securities not guaranteed by the government for-sale investments and are stated at fair value with any and private debt instruments are stated at fair value based resultant gain or loss being recognized directly in equity. The on bid prices from the Thai Bond Market Association as of exceptions are impairment losses and foreign exchange gains the end of the year. If not available, the Government Bond and losses, which are recognized in the statement of income. Yield for the same period, adjusted by an appropriate risk When these investments are derecognized, the cumulative gain premium, is used. or loss previously recognized directly in equity is accounted Disposal of investments for in the statement of income. Where these investments are On disposal of an investment, the difference between net interest-bearing, interest calculated using the effective interest disposal proceeds and the carrying amount together with the rate method is recognized in the statement of income. associated cumulative gain or loss that was reported in equity Investments in non-marketable equity securities that are is recognized in the statement of income. not investments in subsidiaries or associated companies are Cost of investments sold is calculated by using the stated at cost, after deduction of allowance for impairment. weighted average method. Investments in receivables are stated at acquisition cost 3.5 Loans after deducting the allowance for impairment. When debt Except in case of loans affected through overdraft restructuring is required, the balance is recorded as a loan agreements, loans represent only principal amounts. Unearned at fair value, in accordance with the transfer of financial asset discounts received in advance are presented as a reduction accounting procedure. The difference between the book value in loans. and the fair value is recognized as gain or loss on transfer of financial assets in the statement of income.

ANNUAL REPORT 2007 87 3.6 Allowance for doubtful accounts The difference between the present value of the future cash Allowance for doubtful accounts is determined through flows expected to be received and the outstanding balances methods based on the Bank of Thailand’s regulations and of investment in loans is recorded in the revaluation allowance based on the Bank’s estimated loan loss. The allowance for for debt restructuring. This revaluation allowance for debt non-performing loans has been specifically determined by restructuring is amortized to the statement of income the natures of loans and the related factors such as payment according to the amounts received over the remaining period ability, collateral, historical loss and estimated loss, etc. The of the debt-restructuring contracts except for restructured allowance for performing loans has been assessed based loans with a high probability of default on their contractual upon general related factors such as historical loss, credit obligations and agreement. In this latter case, the Bank will risk, economic conditions and management experience, etc. stop amortizing to the statement of income. The recognition For corporate loans, the allowance is determined on a case by in the statement of income occurs when such risk is eliminated. case basis while the allowance for retail loans is determined 3.8 Properties foreclosed on portfolio basis with similar risk characteristics. Properties foreclosed are recorded at the lower of market Based on BoT’s regulations, with amended criteria in value or the amount of the legal claim on the related debt, accordance with International Accounting Standards No. 39 including interest receivable. The market value is estimated (IAS 39) dated 7 December 2006, the Bank and certain by using the latest appraisal value after deduction of estimated subsidiaries have classified their loan portfolios into six disposal expenses and holding cost. categories, primarily based on the non-accrual period. For Losses on impairment are charged to the statement of loans classified as pass and special-mention, the calculation income. Gains or losses on disposal of properties foreclosed of allowances for doubtful accounts is based on the regulatory are recorded as other income or expenses upon disposal. minimum percentage requirement, taking into consideration 3.9 Premises and equipment and depreciation the collateral value, where the collateral type and date of the Premises and equipment are stated at cost less accumulated latest appraisal are qualifying factors. For loans classified as depreciation and impairment losses except for land and sub-standard, doubtful and doubtful of loss, the allowances buildings which are stated at their revalued amounts. The on these accounts will be set at 100 percent for the difference revalued amount is the fair value determined on the basis of between the outstanding book value of the debt and the the property’s existing use at the date of revaluation less any present value of future cashflows expected to be received subsequent accumulated depreciation and subsequent or the expected proceeds from the disposal of collateral in accumulated impairment losses. accordance with the BoT’s regulations. - Revalued assets Under the BoT’s directive, commercial banks were allowed Land and buildings revaluations are performed by to gradually raise the allowance for loans classified as sub- independent professional appraisers according to the Bank standard, doubtful and doubtful of loss by the end of 2007. of Thailand’s criteria with sufficient regularity to ensure that In the fourth quarter of 2006 the Bank raised the allowance the carrying amount of these assets does not differ materially for these loan classifications to fully comply with the new from that which would be determined using fair values at the BoT’s regulations. balance sheet date. 3.7 Troubled debt restructuring When an asset’s carrying amount is increased as a result The Bank and the asset management subsidiary record of a revaluation, the increase is credited directly to equity foreclosed assets acquired from troubled debt restructuring under the heading of revaluation surplus. However, a revaluation at fair value up to the legal claim for the debt, including interest increase is recognized as income to the extent that it receivable. Where restructuring a loan involves modification reverses a revaluation decrease of the same asset previously of its terms, the present value of the expected future cash recognized as an expense. collections is calculated by using discount rates equivalent When an asset’s carrying amount is decreased as a result to the market rates of interest at the time of restructuring. of a revaluation, the decrease is recognized as an expense.

88 ANNUAL REPORT 2007 However, a revaluation decrease is charged directly against 3.10 Intangible assets any related revaluation surplus to the extent that the decrease - Goodwill does not exceed the amount held in the revaluation surplus Goodwill in a business combination represents the excess in respect of that same asset. of the cost of acquisition over the fair value of the Bank’s Upon disposal, any related revaluation surplus is transferred share of the identifiable net assets acquired. Negative goodwill directly from the revaluation reserve to retained earnings and in a business combination represents the excess of the fair is not taken into account when calculating the gain or loss value of the Bank’s share of the identifiable net assets acquired on disposal. over the cost of acquisition. - Leased assets Goodwill and negative goodwill are stated at cost less Leases under which the Bank and its subsidiaries accumulated amortization and impairment losses. substantially assume all the risk and rewards of ownership - Other intangible assets are classified as finance leases. Equipment acquired by way Other intangible assets are stated at cost less accumulated of finance leases is capitalized at the lower of its fair value amortization and impairment losses. and the present value of the minimum lease payments at - Amortization the inception of the lease, less accumulated depreciation Amortization is charged to the statement of income on a and impairment losses. Lease payments are apportioned straight-line basis over the estimated useful lives of intangible between the finance charges and reduction of the lease liability assets unless such lives are indefinite. Intangible assets with so as to achieve a constant rate of interest on the remaining an indefinite useful life are systematically tested for impairment balance of the liability. Finance charges are charged directly to at each balance sheet date. Goodwill, negative goodwill and the statement of income. other intangible assets are amortized from the date they are - Subsequent expenditure available for use. The estimated useful lives are as follows: Subsequent expenditure relating to an item of premises Goodwill 10 years and equipment is added to the carrying amount of the asset Leasehold rights Over the lease periods when it is probable that the future economic benefits in excess Software licenses 5-15 years of the originally assessed standard of performance of the Deferred underwriting license fee existing asset will flow to the Bank and its subsidiaries. All and deferred stock exchange other subsequent expenditure is recognized as an expense membership fee 5 years in the period in which it is incurred. 3.11 Impairment - Depreciation The carrying amount of the Bank and its subsidiaries’ assets Depreciation is charged to the statement of income over are reviewed at each balance sheet date to determine whether the estimated useful lives of each item of premises and there is any indication of impairment. If any such indication equipment. exists, the assets’ recoverable amounts are estimated. Depreciation on buildings acquired before July 1996 is An impairment loss is recognized whenever the carrying computed using the declining-balance method. Depreciation amount of an asset or its cash-generating unit exceeds its on buildings acquired after July 1996 and on equipment is recoverable amount. The impairment loss is recognized in the computed using the straight-line method. The estimated useful statement of income unless it reverses a previous revaluation lives are as follows: credited to equity, in which case it is charged to equity. Buildings 50 years 3.12 Interest-bearing liabilities Equipment 5-15 years Interest-bearing liabilities are recognized initially at fair Gains or losses on disposal of premises and equipment value less attributable transaction charges. Subsequent to are recorded as other income or expense upon disposal. initial recognition, interest-bearing liabilities are stated at

ANNUAL REPORT 2007 89 amortized cost with any difference between cost and redemption Hybrid Instrument includes a non-derivative host contract value being recognized in the statement of income over the and an embedded derivative. The host contract shall be period of the borrowings. accounted for under the classification of the host contract. 3.13 Provisions An embedded derivative shall be separated from the host A provision is recognized in the balance sheet when the contract and accounted for as a derivative which is carried Bank has a present legal or constructive obligation as a result at fair value, if and only if: of a past event, and it is probable that an outflow of economic 1. The economic characteristics and risks of the host benefits will be required to settle the obligation and a reliable contract and the embedded derivative are not closely estimate can be made of the amount of the obligation. related; Provisions for commitments as off-balance sheet items 2. A separate instrument with the same terms as the are determined by credit risk transactions ie., Avals on bills, embedded derivative would meet the definition of a Acceptances, letters of indemnity - borrowing, other guarantees derivative and; and letters of credit, etc. A provision is recognized when the 3. The hybrid instrument is not recognized at fair value transactions relate to loans that are classified as sub-standard, through the statement of income. doubtful, doubtful of loss and loss assets. The provisions have If an embedded derivative is not separated, the hybrid been specifically determined by using the same rate as the instrument shall be accounted for under the classification allowance for doubtful accounts on each of those loans. of the host contract. Changes in the fair value of separable 3.14 Derivatives embedded derivatives are recognized in the statement of Trading Derivative Trading derivatives are carried at fair income. value. The fair value of derivatives is determined based upon Deposit and borrowing transactions with embedded liquid (observable) market prices evidenced by exchange derivatives traded prices, broker/dealer quotations, or prices of other The Bank’s management approach relating to deposit and transactions with similarly rated counterparties or based upon borrowing transactions with embedded derivatives (structured a valuation technique incorporating observable market data. notes) has always been prudent and strict. In addition, the It includes an adjustment for individual counterparty credit Bank’s accounting and fair value assessment to processes risk and other adjustments, as appropriate, to reflect liquidity relating to structured note products are consistent with those and ongoing servicing costs. The changes in fair value which of International Accounting Standard No. 39 (IAS 39). As such, include realized and unrealized gains or losses are recognized when BOT enforced the notification titled “Permission for in the statement of income as part of gain on exchange and Commercial Banks to Undertake Deposit or Borrowing assets or liabilities in the balance sheet. Transactions with Embedded Derivatives:, dated 16 November Hedging Derivative The Bank manages its banking 2007, requiring commercial banks to apply IAS 39 to structured exposures to market rate movements outside the trading note products, there was no significant impact to the Bank’s activities through the use of derivatives, including interest rate financial statements. swaps, interest rate future and forward exchange contracts. Day One Profit Gains or losses from trading derivative and Gain or loss resulting from the changes in fair values of hybrid instrument are recognized at inception in the statement contracts are recognized in accordance with the standard of income when the fair value of that derivative is determined accounting treatment for revenues or expenses on hedged based upon observable market data or supported by items as follows: comparison to other observable market transactions, or based 1. Where hedged items are carried at fair value, hedging upon a valuation technique incorporating observable market instruments are carried at fair value consistently. data. The Bank amortizes initial gains or losses on derivative 2. Where hedged items are carried on an accrual basis, transactions on a straight-line basis or on an effective interest then hedging instruments carry the accrual consistently. rate basis over the life of the contract where the fair value is

90 ANNUAL REPORT 2007 based upon unobservable market data. The unamortized The lease income of a subsidiary is recognized as follows: gains or losses are recognized in the statement of income - Income under finance lease agreements is recognized when the market data becomes observable. on the basis of installment payments due by using the 3.15 Employee benefits effective interest rate method, calculated from the - Staff retirement benefits balance of the net investment in each installment. Staff members are entitled to retirement pay upon When installment payments are in arrears for more termination of employment depending upon length of service than three months, the cash basis is adopted. and other conditions. It is management’s policy to recognize - Income under operating lease agreements is recognized an appropriate amount as a provision for each period. on the basis of installment payments due. When - Provident fund installment payments are in arrears for more than The Bank established a provident fund under the three months, the cash basis is adopted. Provident Fund Act (B.E. 2530), and registered this Fund 3.17 Recognition of interest expense with the Ministry of Finance on 16 August 1994. According Interest expense is recognized on an accrual basis. to the Fund’s Articles, every employee is entitled to apply for 3.18 Income tax membership, and each member must contribute to the Fund at Current tax is the expected tax payable on the taxable the rate of 3% of their basic salary, while the Bank contributes income for the year, using tax rates enacted at the balance an additional 3.0 - 4.5%. Upon termination of employment, sheet date. employees are entitled to receive this benefit except when 3.19 Earnings per share terminated “without compensation”. Basic earnings per share is computed by dividing net 3.16 Recognition of interest income income by the weighted average number of ordinary shares Interest and discount income on loans are recognized on in issue during the year. an accrual basis, except when interest payments are in arrears There is no diluting effect on earnings per share that for more than three months when, regardless of collateral, might result from an assumed exercise of warrants. the cash basis is adopted. 3.20 Translation of foreign currencies In compliance with the Bank of Thailand’s regulation, the Assets and liabilities denominated in foreign currencies Bank reverses accrued interest receivable on loans for which are translated into Thai Baht at the rates of exchange prevailing repayments are more than three months in arrears. on the dates of the transactions. Assets and liabilities including The asset management subsidiary recognizes interest the balance sheet of the Bank’s foreign branches that are income on investments in receivables and loans on a cash denominated in foreign currencies at the end of the year are basis. translated into Thai Baht at the reference rates announced Income from factoring of a subsidiary is recognized on by the BoT on that date. The statements of income of the an accrual basis. Bank’s foreign branches are translated into Thai Baht at the Income from hire-purchase agreements is recognized reference rates announced by the BoT at the month end rate. on the basis of installment payments due by using the Exchange gains or losses on translation and on transactions effective interest rate method, calculated from the balance in foreign currencies including foreign exchange differences of the net investment in each installment. When installment arising on the translation of financial statements of the Bank’s payments are in arrears for more than three months, the foreign branches are included in revenues and expenses for cash basis is adopted. the year.

ANNUAL REPORT 2007 91 4 SUPPLEMENTARY INFORMATION OF CASH FLOWS Non-cash items are as follows: The Bank and its subsidiaries have provided for a revaluation surplus on investments and have presented it as a change in shareholders’ equity for the years ended 31 December 2007 and 2006 as follows:

( Million Baht ) Consolidated 2007 2006 Revaluation surplus on investments 725 373 The Bank 2007 2006 Revaluation surplus on investments 727 370 For the years ended 31 December 2007 and 2006, the For the years ended 31 December 2007 and 2006, the Bank Bank recognized the realized portion of the appraised surplus and its subsidiaries received foreclosed properties arising on asset revaluation amounting to Baht 137 million and from debt settlement amounting to Baht 1,591 million and Baht 142 million, respectively, by transferring these amounts Baht 1,441 milion, respectively, on a consolidated basis, and to retained earnings from appraisal surplus on asset Baht 1,364 million and Baht 1,238 million, respectively, for revaluation. the Bank only.

92 ANNUAL REPORT 2007 5 INTERBANK AND MONEY MARKET ITEMS (ASSETS) Interbank and money market items (assets) at of 31 December 2007 and 2006 consisted of:

( Million Baht ) Consolidated 2007 2006 At call Term Total At call Term Total 1. Domestic The BoT and FIDF 1,925 23,000 24,925 1,626 - 1,626 Commercial banks 859 40 899 162 1,056 1,218 Other banks - - - 2 - 2 Finance, securities and credit foncier companies 200 - 200 75 - 75 Other financial institutions - - - 9 190 199 Total Domestic 2,984 23,040 26,024 1,874 1,246 3,120 Add Accrued interest receivables - 8 8 - 2 2 Less Allowance for doubtful accounts (8) - (8) - (12) (12) Total 2,976 23,048 26,024 1,874 1,236 3,110 2. Foreign US Dollar 4,483 26,678 31,161 3,182 76,017 79,199 Japanese Yen 6 - 6 65 - 65 Other currencies 741 476 1,217 473 - 473 Total Foreign 5,230 27,154 32,384 3,720 76,017 79,737 Add Accrued interest receivables 6 314 320 - - - Less Allowance for doubtful accounts (4) - (4) (5) - (5) Total 5,232 27,468 32,700 3,715 76,017 79,732 Total Domestic and Foreign 8,208 50,516 58,724 5,589 77,253 82,842

ANNUAL REPORT 2007 93 ( Million Baht ) The Bank 2007 2006 At call Term Total At call Term Total 1. Domestic The BoT and FIDF 1,925 23,000 24,925 1,626 - 1,626 Commercial banks 816 40 856 199 1,056 1,255 Other banks - - - 2 - 2 Finance, securities and credit foncier companies 200 - 200 75 - 75 Other financial institutions - - - 9 190 199 Total Domestic 2,941 23,040 25,981 1,911 1,246 3,157 Add Accrued interest receivables - 8 8 - 2 2 Less Allowance for doubtful accounts (8) - (8) - (12) (12) Total 2,933 23,048 25,981 1,911 1,236 3,147 2. Foreign US Dollar 4,483 26,678 31,161 3,182 76,017 79,199 Japanese Yen 6 - 6 65 - 65 Other currencies 741 476 1,217 473 - 473 Total Foreign 5,230 27,154 32,384 3,720 76,017 79,737 Add Accrued interest receivables 6 314 320 - - - Less Allowance for doubtful accounts (4) - (4) (5) - (5) Total 5,232 27,468 32,700 3,715 76,017 79,732 Total Domestic and Foreign 8,165 50,516 58,681 5,626 77,253 82,879

6 SECURITIES PURCHASED UNDER RESALE AGREEMENTS Securities purchased under resale agreements at of 31 December 2007 and 2006 consisted of: ( Million Baht ) Consolidated and The Bank 2007 2006 Government Bonds and BoT Bonds 10,700 22,200

94 ANNUAL REPORT 2007 7 INVESTMENTS Investments as of 31 December 2007 and 2006 consisted of: ( Million Baht ) Consolidated 2007 Cost Value/ Amortized Cost Value Unrealized Gain Unrealized Loss Fair Value 1. Current Investments 1.1 Trading investments 1.1.1 Government and state enterprise securities 1,816 15 (8) 1,823 1.1.2 Private enterprise debt instruments 1,339 1 (1) 1,339 1.1.3 Marketable equity securities - domestic 325 10 - 335 Total 3,480 26 (9) 3,497 Add Allowance for revaluation 17 - Total 3,497 3,497 1.2 Available-for-sale investments 1.2.1 Government and state enterprise securities 32,279 315 (138) 32,456 1.2.2 Private enterprise debt instruments 445 5 - 450 1.2.3 Foreign debt instruments 17,217 39 (6) 17,250 1.2.4 Marketable equity securities - domestic 949 247 (661) 535 1.2.5 Others 20 1 - 21 Total 50,910 607 (805) 50,712 Add Allowance for revaluation 395 - Less Allowance for impairment (593) - Total 50,712 50,712 1.3 Held-to-maturity debt instruments 1.3.1 Government and state enterprise securities 561 - (1) 560 1.3.2 Private enterprise debt instruments 28 - - 28 1.3.3 Foreign debt instruments 271 - - 271 Total 860 - (1) 859 1.4 General investments 1.4.1 Non-marketable equity securites - domestic 253 - (248) 5 Less Allowance for impairment (248) - Total 5 5 Total Current Investments - net 55,074 55,073

ANNUAL REPORT 2007 95 ( Million Baht ) Consolidated 2007 Cost Value/ Amortized Cost Value Unrealized Gain Unrealized Loss Fair Value 2. Long-term Investments 2.1 Available-for-sale investments 2.1.1 Government and state enterprise securities 25,351 50 (105) 25,296 2.1.2 Private enterprise debt instruments 560 3 (47) 516 2.1.3 Foreign debt instruments 1,496 13 (5) 1,504 2.1.4 Marketable equity securities - domestic 85 218 - 303 Total 27,492 284 (157) 27,619 Add Allowance for revaluation 173 - Less Allowance for impairment (46) - Total 27,619 27,619 2.2 Held-to-maturity debt instruments 2.2.1 Government and state enterprises securities 7,437 37 (20) 7,454 2.2.2 Private enterprises debt instruments 1,467 15 (585) 897 2.2.3 Foreign debt instruments 1,520 - - 1,520 Total 10,424 52 (605) 9,871 Less Allowance for impairment (585) - Total 9,839 9,871 2.3 General investments 2.3.1 Non-marketable equity securities - domestic 1,730 - (102) 1,628 2.3.2 Non-marketable equity securities - overseas 306 - (264) 42 2.3.3 Investments in receivables 1,009 - (274) 735 Total 3,045 - (640) 2,405 Less Allowance for impairment (640) - Total 2,405 2,405 Total Long-term Investments - net 39,863 39,895

96 ANNUAL REPORT 2007 ( Million Baht ) Consolidated 2006 Cost Value/ Amortized Cost Value Unrealized Gain Unrealized Loss Fair Value 1. Current Investments 1.1 Trading investments 1.1.1 Government and state enterprise securities 6,155 1 (32) 6,124 1.1.2 Private enterprise debt instruments 493 1 (1) 493 1.1.3 Marketable equity securities - domestic 240 2 - 242 Total 6,888 4 (33) 6,859 Less Allowance for revaluation (29) - Total 6,859 6,859 1.2 Available-for-sale investments 1.2.1 Government and state enterprise securities 23,685 125 (355) 23,455 1.2.2 Private enterprise debt instruments 410 - (10) 400 1.2.3 Foreign debt instruments 16,443 12 (10) 16,445 1.2.4 Marketable equity securities - domestic 1,019 171 (656) 534 1.2.5 Others 20 - - 20 Total 41,577 308 (1,031) 40,854 Less Allowance for revaluation (183) - Less Allowance for impairment (540) - Total 40,854 40,854 1.3 Held-to-maturity debt instruments 1.3.1 Government and state enterprises securities 2,906 11 (6) 2,911 1.3.2 Foreign debt instruments 720 2 - 722 Total 3,626 13 (6) 3,633 Total Current Investments - net 51,339 51,346

ANNUAL REPORT 2007 97 ( Million Baht ) Consolidated 2006 Cost Value/ Amortized Cost Value Unrealized Gain Unrealized Loss Fair Value 2. Long-term Investments 2.1 Available-for-sale investments 2.1.1 Government and state enterprise securities 20,783 56 (140) 20,699 2.1.2 Private enterprise debt instruments 1,072 16 (53) 1,035 2.1.3 Foreign debt instruments 13,474 7 (83) 13,398 2.1.4 Marketable equity securities - domestic 85 177 - 262 Total 35,414 256 (276) 35,394 Add Allowance for revaluation 26 - Less Allowance for impairment (46) - Total 35,394 35,394 2.2 Held-to-maturity debt instruments 2.2.1 Government and state enterprises securities 8,220 1 (111) 8,110 2.2.2 Private enterprises debt instruments 1,566 4 (587) 983 2.2.3 Foreign debt instruments 2,343 - - 2,343 Total 12,129 5 (698) 11,436 Less Allowance for impairment (586) - Total 11,543 11,436 2.3 General investments 2.3.1 Non-marketable equity securities - domestic 2,428 - (589) 1,839 2.3.2 Non-marketable equity securities - overseas 438 - (312) 126 2.3.3 Investments in receivables 1,614 - (350) 1,264 Total 4,480 - (1,251) 3,229 Less Allowance for impairment (1,251) - Total 3,229 3,229 Total Long-term Investments - net 50,166 50,059

98 ANNUAL REPORT 2007 ( Million Baht ) The Bank 2007 Cost Value/ Amortized Cost Value Unrealized Gain Unrealized Loss Fair Value 1. Current Investments 1.1 Trading investments 1.1.1 Government and state enterprises 1,816 15 (8) 1,823 1.1.2 Private enterprises debt instruments 1,339 1 (1) 1,339 1.1.3 Marketable equity securities - domestic 325 10 - 335 Total 3,480 26 (9) 3,497 Add Allowance for revaluation 17 - Total 3,497 3,497 1.2 Available-for-sale investments 1.2.1 Government and state enterprises securities 32,279 315 (138) 32,456 1.2.2 Private enterprises debt instruments 445 5 - 450 1.2.3 Foreign debt instruments 17,217 39 (6) 17,250 1.2.4 Marketable equity securities - domestic 949 247 (661) 535 Total 50,890 606 (805) 50,691 Add Allowance for revaluation 394 - Less Allowance for impairment (593) - Total 50,691 50,691 1.3 Held-to-maturity debt instruments 1.3.1 Government and state enterprises securities 381 - (1) 380 1.3.2 Private enterprises debt instruments 28 - - 28 1.3.3 Foreign debt instruments 271 - - 271 Total 680 (1) 679 1.4 General investments 1.4.1 Non-marketable equity securities - domestic 253 - (248) 5 Less Allowance for impairment (248) - Total 5 5 Total Current Investments - net 54,873 54,872

ANNUAL REPORT 2007 99 ( Million Baht ) The Bank 2007 Cost Value/ Amortized Cost Value Unrealized Gain Unrealized Loss Fair Value 2. Long-term Investments 2.1 Available-for-sale investments 2.1.1 Government and state enterprises securities 25,351 50 (105) 25,296 2.1.2 Private enterprises debt instruments 560 3 (47) 516 2.1.3 Foreign debt instruments 1,496 13 (5) 1,504 2.1.4 Marketable equity securities - domestic 85 218 - 303 Total 27,492 284 (157) 27,619 Add Allowance for revaluation 173 - Less Allowance for impairment (46) - Total 27,619 27,619 2.2 Held-to-maturity debt instruments 2.2.1 Government and state enterprises securities 7,437 37 (20) 7,454 2.2.2 Private enterprises debt instruments 1,467 15 (585) 897 2.2.3 Foreign debt instruments 1,520 - - 1,520 Total 10,424 52 (605) 9,871 Less Allowance for impairment (585) - Total 9,839 9,871 2.3 General investments 2.3.1 Non-marketable equity securities - domestic 1,673 - (84) 1,589 2.3.2 Non-marketable equity securities - overseas 306 - (265) 41 2.3.3 Investments in receivables 733 - (251) 482 Total 2,712 - (600) 2,112 Less Allowance for impairment (600) - Total 2,112 2,112 Total Long-term Investments - net 39,570 39,602

100 ANNUAL REPORT 2007 ( Million Baht ) The Bank 2006 Cost Value/ Amortized Cost Value Unrealized Gain Unrealized Loss Fair Value 1. Current Investments 1.1 Trading investments 1.1.1 Government and state enterprises 6,155 1 (32) 6,124 1.1.2 Private enterprises debt instruments 493 1 (1) 493 1.1.3 Marketable equity securities - domestic 240 2 - 242 Total 6,888 4 (33) 6,859 Less Allowance for revaluation (29) - Total 6,859 6,859 1.2 Available-for-sale investments 1.2.1 Government and state enterprises securities 23,685 125 (355) 23,455 1.2.2 Private enterprises debt instruments 410 - (10) 400 1.2.3 Foreign debt instruments 16,443 12 (10) 16,445 1.2.4 Marketable equity securities - domestic 1,019 171 (656) 534 Total 41,557 308 (1,031) 40,834 Less Allowance for revaluation (183) - Less Allowance for impairment (540) - Total 40,834 40,834 1.3 Held-to-maturity debt instruments 1.3.1 Government and state enterprises securities 2,610 12 (6) 2,616 1.3.2 Foreign debt instruments 720 1 - 721 Total 3,330 13 (6) 3,337 Total Current Investments - net 51,023 51,030

ANNUAL REPORT 2007 101 ( Million Baht ) The Bank 2006 Cost Value/ Amortized Cost Value Unrealized Gain Unrealized Loss Fair Value 2. Long-term Investments 2.1 Available-for-sale investments 2.1.1 Government and state enterprises securities 20,783 56 (140) 20,699 2.1.2 Private enterprises debt instruments 1,072 15 (52) 1,035 2.1.3 Foreign debt instruments 13,474 7 (83) 13,398 2.1.4 Marketable equity securities - domestic 85 175 - 260 Total 35,414 253 (275) 35,392 Add Allowance for revaluation 24 - Less Allowance for impairment (46) - Total 35,392 35,392 2.2 Held-to-maturity debt instruments 2.2.1 Government and state enterprises securities 8,040 1 (111) 7,930 2.2.2 Private enterprises debt instruments 1,566 4 (587) 983 2.2.3 Foreign debt instruments 2,343 - - 2,343 Total 11,949 5 (698) 11,256 Less Allowance for impairment (586) - Total 11,363 11,256 2.3 General investments 2.3.1 Non-marketable equity securities - domestic 2,354 - (565) 1,789 2.3.2 Non-marketable equity securities - overseas 438 - (312) 126 2.3.3 Investments in receivables 808 - (179) 629 Total 3,600 - (1,056) 2,544 Less Allowance for impairment (1,056) - Total 2,544 2,544 Total Long-term Investments - net 49,299 49,192

102 ANNUAL REPORT 2007 As of 31 December 2007 and 2006, investments in held-to-maturity debt instruments, which are government or state enterprise securities, included promissory notes from Thai Asset Management Corporation of Baht 3,981 million and Baht 4,169 million, respectively. Gain on investments presented in the statement of income for the years ended 31 December 2007 and 2006 consisted of: ( Million Baht ) Consolidated The Bank 2007 2006 2007 2006 Gain on disposal of investments Held for trading investments 565 291 565 291 Available-for-sale investments 878 184 871 180 General investments 228 211 226 210 Investments in receivables 68 99 - - Total 1,739 785 1,662 681 Loss on disposal of investments Held for trading investments (159) (100) (158) (99) Available-for-sale investments (363) (404) (363) (404) General investments (96) (29) (88) (29) Total (618) (533) (609) (532) Gain (loss) on transfer of financial assets 10 (15) 5 - Loss from a capital reduction in a subsidiary - - (43) - Gain (loss) from revaluation of investments 50 (111) 50 (111) (Loss) reversal on impairment Investments in securities 102 173 94 170 Investments in receivables (107) (88) (79) (1) Total (5) 85 15 169 Total Gain on Investments 1,176 211 1,080 207

Revaluation (deficit) surplus on investments as of 31 December 2007 and 2006 consisted of: ( Million Baht ) Consolidated The Bank 2006 2007 2006 2007 (Restated) Revaluation (deficit) surplus on investments Debt instruments 170 (389) 170 (389) Equity securities 397 229 397 229 Share of revaluation surplus in subsidiaries and associated companies using the equity method 1 3 - - Total 568 (157) 567 (160)

ANNUAL REPORT 2007 103 As of 31 December 2007 and 2006 a maturity analysis for debt instruments resulted in the following: ( Million Baht ) Consolidated 2007 2006 Maturity Maturity Over Over 1 year 1 year to 5 Over 5 Total 1 year 1 year to 5 Over 5 Total years years years years 1. Available-for-sale investments 1.1 Government and state enterprise securities 15,764 26,058 15,808 57,630 2,547 24,035 17,886 44,468 1.2 Private enterprise debt instruments 1,005 - - 1,005 410 1,072 - 1,482 1.3 Foreign debt instruments 17,217 1,496 - 18,713 16,443 4,376 9,098 29,917 Total 33,986 27,554 15,808 77,348 19,400 29,483 26,984 75,867 Add (Less) Allowance for revaluation 36 (26) 161 171 (27) (295) (68) (390) Less Allowance for impairment - (46) - (46) - (45) - (45) Total 34,022 27,482 15,969 77,473 19,373 29,143 26,916 75,432 2. Held-to-maturity debt instruments 2.1 Government and state enterprise securities 561 6,355 1,082 7,998 2,905 6,662 1,558 11,125 2.2 Private enterprise debt instruments 28 882 585 1,495 - 980 586 1,566 2.3 Foreign debt instruments 270 1,521 - 1,791 720 2,343 - 3,063 Total 859 8,758 1,667 11,284 3,625 9,985 2,144 15,754 Less Allowance for impairment - - (585) (585) - - (585) (585) Total 859 8,758 1,082 10,699 3,625 9,985 1,559 15,169 Total Debt Instruments 34,881 36,240 17,051 88,172 22,998 39,128 28,475 90,601

104 ANNUAL REPORT 2007 ( Million Baht ) The Bank 2007 2006 Maturity Maturity Over Over 1 year 1 year to 5 Over 5 Total 1 year 1 year to 5 Over 5 Total years years years years 1. Available-for-sale investments 1.1 Government and state enterprise securities 15,764 26,058 15,808 57,630 2,547 24,035 17,886 44,468 1.2 Private enterprise debt instruments 1,005 - - 1,005 410 1,072 - 1,482 1.3 Foreign debt instruments 17,217 1,496 - 18,713 16,443 4,376 9,098 29,917 Total 33,986 27,554 15,808 77,348 19,400 29,483 26,984 75,867 Add (Less) Allowance for revaluation 36 (26) 161 171 (27) (295) (68) (390) Less Allowance for impairment - (46) - (46) - (45) - (45) Total 34,022 27,482 15,969 77,473 19,373 29,143 26,916 75,432 2. Held-to-maturity debt instruments 2.1 Government and state enterprise securities 381 6,355 1,082 7,818 2,610 6,482 1,558 10,650 2.2 Private enterprise debt instruments 28 882 585 1,495 - 980 586 1,566 2.3 Foreign debt instruments 270 1,521 - 1,791 720 2,343 - 3,063 Total 679 8,758 1,667 11,104 3,330 9,805 2,144 15,279 Less Allowance for impairment - - (585) (585) - - (585) (585) Total 679 8,758 1,082 10,519 3,330 9,805 1,559 14,694 Total Debt Instruments 34,701 36,240 17,051 87,992 22,703 38,948 28,475 90,126

ANNUAL REPORT 2007 105 As of 31 December 2007 and 2006 investments held to continue as a going concern is uncertain, or unlisted by the Bank and its subsidiaries in financial institutions that companies whose financial position and operating results were closed on 8 December 1997, or investments in listed are the same as companies which meet SET’s criteria for companies which meet SET’s criteria for delisting, and are delisting or investments in receivables with uncertainty in in default on debt instruments, or companies whose ability settlement or in default, were as follows:

( Million Baht ) Consolidated 2007 Cost Value / Book Value Fair Value Investments Equity Debt Investments Equity Debt Allowance for In Receivables Securities Instruments In Receivables Securities Instruments Impairment 1. Closed financial institutions - - 131 - - - (131) 2. Listed companies which meet SET’s criteria for delisting, and are in default on debt instruments ------3. Companies whose ability to continue as a going concern is uncertain, or unlisted companies whose financial position and operating results are the same as companies which meet SET’s criteria for delisting - 896 498 - 1 - (1,393) 4. Investment in receivables with uncertainty in settlement or in default 979 - - 705 - - (274) Total 979 896 629 705 1 - (1,798)

( Million Baht ) Consolidated 2006 Cost Value / Book Value Fair Value Allowance for Investments Equity Debt Investments Equity Debt Impairment In Receivables Securities Instruments In Receivables Securities Instruments 1. Closed financial institutions - 1 131 - - - (132) 2. Listed companies which meet SET’s criteria for delisting, and are in default on debt instruments 3 1 - - 8 - (3) 3. Companies whose ability to continue as a going concern is uncertain, or unlisted companies whose financial position and operating results are the same as companies which meet SET’s criteria for delisting - 743 498 - 2 - (1,240) 4. Investment in receivables with uncertainty in settlement or in default 1,734 - - 1,395 - - (339) Total 1,737 745 629 1,395 10 - (1,714)

106 ANNUAL REPORT 2007 ( Million Baht ) The Bank 2007 Cost Value / Book Value Fair Value Allowance for Investments Equity Debt Investments Equity Debt Impairment In Receivables Securities Instruments In Receivables Securities Instruments 1. Closed financial institutions - - 131 - - - (131) 2. Listed companies which meet SET’s criteria for delisting, and are in default on debt instruments ------3. Companies whose ability to continue as a going concern is uncertain, or unlisted companies whose financial position and operating results are the same as companies which meet SET’s criteria for delisting - 896 498 - 1 - (1,393) 4. Investment in receivables with uncertainty in settlement or in default 702 - - 451 - - (251) Total 702 896 629 451 1 - (1,775)

( Million Baht ) The Bank 2006 Cost Value / Book Value Fair Value Allowance for Investments Equity Debt Investments Equity Debt Impairment In Receivables Securities Instruments In Receivables Securities Instruments 1. Closed financial institutions - 1 131 - - - (132) 2. Listed companies which meet SET’s criteria for delisting, and are in default on debt instruments 3 1 - - 8 - (3) 3. Companies whose ability to continue as a going concern is uncertain, or unlisted companies whose financial position and operating results are the same as companies which meet SET’s criteria for delisting - 743 498 - 2 - (1,240) 4. Investment in receivables with uncertainty in settlement or in default 928 - - 761 - - (167) Total 931 745 629 761 10 - (1,542)

ANNUAL REPORT 2007 107 For the years ended 31 December 2007 and 2006, change in the investments in subsidiaries and associated companies were as follows: ( Million Baht ) Consolidated The Bank 2006 2007 2006 2007 (Restated) Net book value at 1 January 483 450 9,740 11,127 Share of profit from investments on equity method 120 178 - - Acquisitions - 4 100 694 Sale (2) - (14) - Liquidation - - - (2,046) Dividend income (49) (121) - - Reversal of allowance for impairment 16 24 14 11 Decrease in share capital - (39) (483) (35) Write - off - (11) - (11) Others 21 (2) - - Net book value at 31 December 589 483 9,357 9,740

108 ANNUAL REPORT 2007 income

( Million Baht ) Bank The Investments 2006 (Restated) method Dividend follows: as were

method Cost companies

Investments Consolidated associated

method Equity and

Cost subsidiaries of indirectly

and

Shareholding shares

% Directly 2007 2006 2007 2006 2007 2006 2007 2007 2006 99.99% 99.99% - - - - 1,312 1,312 - - 100.00% 100.00% - - - - 5,998 5,998 - - ordinary in

Fund Business Type Management Business Service 100.00% 100.00% 18 18 107 106 18 18 20 6 Service Service 100.00% 100.00% 100.00% 100.00% 21 4 21 144 4 107 31 21 32 21 4 - 4 - 5 - Lending 100.00% 100.00% - - - - 900 900 - - Lending 100.00% 100.00% - - - - 237 237 - - of Management 100.00% 100.00% - - - - 2,003 2,003 825 268 Development 100.00% 100.00% - - - - 639 1,122 - - Asset Securities investments

Ltd. Service 100.00% 100.00% 5 5 15 15 5 5 5 5 2006

Ltd. Mutual Ltd. Property Ltd. and Co.,

Ltd. Service 100.00% 100.00% - - - - 6 6 - - Ltd. Co., Co., Co., Ltd. Service 100.00% 100.00% 6 6 27 24 6 6 1 - Co., 2007 Co.,

Ltd. Ltd. Co., Ltd. Ltd. Public Buildings Center Ltd. Co., Co., Management Co., Co., Management December and

Co., Management 31

Software Management Facilities Land Gunpai Plus of Securities Asset Leasing Research Factoring

Asset As Phethai Kasikorn Kasikorn Progress Kasikorn Kasikorn Progress Progress Progress Progress Progress Kasikorn

ANNUAL REPORT 2007 109 389

income

( Million Baht ) 874

Bank 355 - - The Investments 9,740 2006 (Restated)

method Dividend

355 9,357

26 483

method Cost

12 589

74 355 Investments Consolidated

method Equity

355 (356) (370) (12) (28) (2,268) (2,282)

Cost

74 indirectly

Co.,Ltd. and

Shareholding

% Directly 2007 2006 2007 2006 2007 2006 2007 2007 2006 Management l Asset Capita Capital 100.00% - - - Capital - 27.50% 27.50% - 2 100 2 - 2 - 2 - 2 2 - -

430 444 601 511 11,625 12,022 874 389 Type Hotel 20.00% 20.00% Business Service 100.00% 100.00% Service 3 100.00% 100.00% 3 2 18 2 15 21 3 19 2 3 3 2 10 6 10 Service Service 100.00% 100.00% Service 100.00% 100.00% 1 30.00% 30.00% 5 1 3 5 11 3 45 11 160 39 1 107 5 3 1 5 - 3 - 5 - - 94 Trading 28.23% 28.23% 1 1 - - 1 1 - - Kasikorn of Management 100.00% ------Through and indirectly Ltd. Service 100.00% 100.00% 4 4 8 6 4 4 - - Net - Ltd. Venture shares Ltd. Venture Co., Ltd. Service - 20.00% - 14 - 2 - 14 - - Ltd. Co., Ltd. Ltd. * Ltd. Co., Subsidiaries Co., impairment 100.00% Ltd. Ltd. Capital Venture in Co., Co., Support Co., Ltd. Companies Ltd. Co., for Capital holds Co., Co., Co., Partners Co., Venture Center Bank Hotel Services Services HR Storage Appraisal Information Venture The KLA * Capital Associate Allowance Grand Less Investments Associated Progress Progress Progress Rural KHAO Management K-SME Progress Progress Processing N.C. Progress M. Total

110 ANNUAL REPORT 2007 The recording of investments in subsidiaries and associated As of 31 December 2007 and 2006 investments held companies using the equity method in the consolidated by the Bank and its subsidiaries, that were more than 10% financial statements is based on financial information obtained of those companies’ shares and were not investments in from audited or unaudited financial statements and from subsidiaries and associated companies, classified by industry management information that has not been audited or reviewed were as follows: by the auditors. ( Million Baht ) Consolidated The Bank 2007 2006 2007 2006 Agricultural and mining 49 34 - - Manufacturing and commerce 20 20 20 20 Property development and construction 568 733 568 733 Infrastructure and services 276 277 271 272 Others 336 354 336 354 Total 1,249 1,418 1,195 1,379

The financial position and results of operations of the Bank’s subsidiaries in the consolidated financial statements are set out below:

Phethai Asset Management Company Limited Condensed Balance Sheets As of 31 December 2007 and 2006 Million Baht 2007 2006 ASSETS Cash and deposits at financial institution 32 50 Long-term investments 34 46 Investments in receivables 774 2,290 Loans, receivables and accrued interest receivables 1,360 3,194 Properties foreclosed 3,646 4,374 Equipment 1 2 Other assets 2,276 771 Total Assets 8,123 10,727 LIABILITIES AND SHAREHOLDERS’ EQUITY Liabilities Borrowings from financial institution 3,745 6,550 Other liabilities 110 90 Shareholders’ Equity 4,268 4,087 Total Liabilities and Shareholders’ Equity 8,123 10,727

ANNUAL REPORT 2007 111 Phethai Asset Management Company Limited Condensed Statements of Income For the Years Ended 31 December 2007 and 2006 Million Baht 2007 2006 Interest and dividend income 217 363 Interest expense 178 281 Net income from interest and dividend 39 82 Reversal bad debt and doubtful accounts (81) (355) Loss on debt restructuring 217 440 Net income (expense) from interest and dividend after (reversal) bad debt and doubtful accounts and loss on debt restructuring (97) (3) Gain on sale of investments in receivables and loans, receivables and accrued interest receivables 378 - Non-interest income 187 468 Non-interest expense 283 293 Net profit 185 172 Earnings per share (Baht) 0.31 0.29

112 ANNUAL REPORT 2007 Phethai Asset Management Company Limited Statements of Cash Flows For the Years Ended 31 December 2007 and 2006 Million Baht 2007 2006 CASH FLOWS FROM OPERATING ACTIVITIES Net profit 185 172 Adjustments to reconcile net loss to net cash from operating activities Gain on transfer of financial assets (36) (130) Loss on impairment of investments in receivables 99 69 Reversal of bad debt and doubtful accounts (81) (355) Loss on debt restructuring 217 440 Interest income from amortization of revaluation allowance for debt restructuring (32) (52) Depreciation and amortization 8 7 Loss on impairment of properties foreclosed 103 98 Loss on impairment of assets to be transferred - 7 Gain on investment in securities (7) (7) Reversal of loss on impairment of other assets (4) (8) Gain on investment in securities (9) - (Decrease) increase in accrued interest payables (16) 12 Decrease (Increase) in accrued expenses 7 (9) Net profit from operations before changes in operating assets and liabilities 434 244 (Increase) decrease in operating assets Investments in receivables 152 371 Loans and receivables 1,044 1,111 Properties foreclosed 659 733 Other assets 454 (87) Increase (decrease) in operating liabilities Other liabilities 28 (22) Net Cash Provided by Operating Activities 2,771 2,350

ANNUAL REPORT 2007 113 Phethai Asset Management Company Limited Statements of Cash Flows (Continued) For the Years Ended 31 December 2007 and 2006 Million Baht 2007 2006 CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from disposal of long-term investments 16 4 Net Cash Provided by Investing Activities 16 4 CASH FLOWS FROM FINANCING ACTIVITIES Cash paid for repayment of borrowings from financial institutions (2,805) (2,375) Net Cash Used in Financing Activities (2,805) (2,375) Net decrease in cash and cash equivalents (18) (21) Cash and cash equivalents at the beginning of the year 50 71 Cash and cash equivalents at the end of the year 32 50 SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION Cash paid (received) during the year Interest expense paid 194 269 Income tax paid 11 14 Income tax received (13) -

Progress Land and Buildings Company Limited Condensed Balance Sheets As of 31 December 2007 and 2006 Million Baht 2007 2006 ASSETS Cash and deposits at financial institutions 17 449 Other current assets 8 10 Properties foreclosed 460 481 Premises and equipment 3 3 Total Assets 488 943 LIABILITIES AND SHAREHOLDERS’ EQUITY Liabilities 4 14 Shareholders’ equity 484 929 Total Liabilities and Shareholders’ Equity 488 943

114 ANNUAL REPORT 2007 Progress Land and Buildings Company Limited Condensed Statements of Income For the Years Ended 31 December 2007 and 2006 Million Baht 2007 2006 Revenues 23 71 Expense 30 66 Net (loss) profit (7) 5 Earnings (loss) profit per share (Baht) (0.64) 0.37

Kasikorn Factoring Company Limited Condensed Balance Sheets As of 31 December 2007 and 2006 Million Baht 2007 2006 ASSETS Current Assets Cash and deposits at financial institutions 159 253 Current portion of factoring receivables 2,626 2,904 Current portion of finance lease receivables 409 247 Current portion of hire purchase receivables 14 11 Other current assets 87 66 Non-Current Assets Factoring receivables 27 57 Finance lease receivables 985 806 Hire purchase receivable 5 4 Other assets 23 27 Total Assets 4,335 4,375 LIABILITIES AND SHAREHOLDERS’ EQUITY Liabilities Short-term loans from financial institutions 2,865 3,305 Current portion of long-term loan 240 140 Long term loan 720 520 Other liabilities 102 124 Shareholders’ Equity 408 286 Total Liabilities and Shareholders’ Equity 4,335 4,375

ANNUAL REPORT 2007 115 Kasikorn Factoring Company Limited Condensed Statements of Income For the Years Ended 31 December 2007 and 2006 Million Baht 2007 2006 Revenues 392 388 Expense 269 480 Net profit (loss) 123 (92) Earnings (loss) per share (Baht) 76.69 (57.52)

Kasikorn Research Center Company Limited Condensed Balance Sheets As of 31 December 2007 and 2006 Million Baht 2007 2006 ASSETS Cash and cash equivalents 30 21 Other assets 14 7 Total Assets 44 28 LIABILITIES AND SHAREHOLDERS’ EQUITY Liabilities 16 9 Shareholders’ Equity 28 19 Total Liabilities and Shareholders’ Equity 44 28

Kasikorn Research Center Company Limited Condensed Statements of Income For the Years Ended 31 December 2007 and 2006 Million Baht 2007 2006 Revenues 68 62 Expense 58 59 Net profit 10 3 Earnings per share (Baht) 94.61 32.98

116 ANNUAL REPORT 2007 Kasikorn Leasing Company Limited Condensed Balance Sheets As 31 of December 2007 and 2006 Million Baht 2006 2007 (Restated) ASSETS Current assets Cash and deposits at financial institution 108 193 Current portion of hire purchase receivables 5,955 2,852 Current portion of finance lease receivables 264 131 Loans to sales representatives receivables 890 1,039 Other current assets 428 228 Non-current assets Hire purchase receivables 14,230 6,779 Finance lease receivables 740 467 Leasehold office improvement and equipment 77 22 Other non current assets 252 10 Total Assets 22,944 11,721 LIABILITIES AND SHAREHOLDERS’ EQUITY Liabilities Short-term loans from financial institutions 240 905 Current portion of long-term loan 6,916 3,241 Other current liabilities 289 94 Long term loan 14,680 6,697 Other non current liabilities 28 19 Shareholders’ Equity 791 765 Total Liabilities and Shareholders’ Equity 22,944 11,721

Kasikorn Leasing Company Limited Condensed Statements of Income For the Years Ended 31 December 2007 and 2006 Million Baht 2006 2007 (Restated) Revenues 1,337 515 Expense 1,312 578 Net profit (loss) 25 (63) Earnings (loss) per share (Baht) 0.28 (0.93)

ANNUAL REPORT 2007 117 Kasikorn Securities Public Company Limited Condensed Balance Sheets As of 31 December 2007 and 2006 Million Baht 2007 2006 ASSETS Cash and cash equivalents 258 249 Long-term deposit with financial institution - 140 Investments in debt and equity securities 21 21 Receivables from Clearing House 22 16 Securities business receivables 1,039 298 Leasehold office improvement and equipment 82 90 Other assets 165 96 Total Assets 1,587 910 LIABILITIES AND SHAREHOLDERS’ EQUITY Short-term loans from financial institutions - 75 Payable to Clearing Houses 373 60 Securities business payables 329 66 Other liabilities 238 99 Shareholders’ Equity 647 610 Total Liabilities and Shareholders’ Equity 1,587 910

Kasikorn Securities Public Company Limited Condensed Statements of Income For the Years Ended 31 December 2007 and 2006 Million Baht 2007 2006 Revenues 350 136 Expense 314 212 Net profit (loss) 36 (76) Earnings (loss) per share (Baht) 0.60 (1.26)

118 ANNUAL REPORT 2007 Kasikorn Asset Management Company Limited Condensed Balance Sheets As of 31 December 2007 and 2006 Million Baht 2007 2006 ASSETS Cash and deposits at financial institution 303 369 Long-term deposits at financial institutions 62 99 Investments in debt and equity securities 186 482 Investments in subsidiary 5 - Fee receivables 150 101 Premises and equipment 138 147 Deferred assets from business purchased 161 214 Other assets 27 27 Total Assets 1,032 1,439 LIABILITIES AND SHAREHOLDERS’ EQUITY Liabilities 238 176 Shareholders’ Equity 794 1,263 Total Liabilities and Shareholders’ Equity 1,032 1,439

Kasikorn Asset Management Company Limited Condensed Statements of Income For the Years Ended 31 December 2007 and 2006 Million Baht 2006 2007 (Restated) Revenues 1,179 1,105 Expense 823 772 Net profit 356 333 Earnings per share (Baht) 13.12 12.27

ANNUAL REPORT 2007 119 K-SME Venture Capital Company Limited Condensed Balance Sheets As of 31 December 2007 Million Baht 2007 ASSETS Cash and deposits at financial institution 100 Total Assets 100 LIABILITIES AND SHAREHOLDERS’ EQUITY Liabilities 1 Shareholders’ Equity 99 Total Liabilities and Shareholders’ Equity 100

K-SME Venture Capital Company Limited Condensed Statements of Income For the Period From 12 October 2007 to 31 December 2007 Million Baht 2007 Revenues - Expense 1 Net loss (1) Loss per share (Baht) (0.03)

120 ANNUAL REPORT 2007 The summary of financial position and results of operations of its subsidiaries which are not included in the consolidated financial statements is as follows: ( Million Baht ) Balance Sheets 2007 2006 (Unaudited) (Audited) Total Total Shareholders’ Total Total Shareholders’ Assets Liabilities Equity Assets Liabilities Equity Progress Gunpai Co., Ltd. 293 149 144 246 138 108 Progress Plus Co., Ltd. 115 84 31 89 57 32 Progress Facilities Management Co., Ltd. 31 16 15 28 13 15 Progress Services Co., Ltd. 29 10 19 28 9 19 Progress Management Co., Ltd. 35 8 27 31 7 24 Progress Storage Co., Ltd. 22 4 18 19 4 15 Progress Appraisal Co., Ltd. 63 24 39 51 12 39 Progress Software Co., Ltd. 165 58 107 160 54 106 Progress HR Co., Ltd. 50 41 9 30 19 11 Progress Services Support Co., Ltd. 30 23 7 15 9 6 833 417 416 697 322 375

(Million Baht except for Earnings (Loss) per Share) Statements of Income For the Years Ended 31 December 2007 2006 (Unaudited) (Audited) Net Earnings Net Earnings Profit (Loss) per Profit (Loss) per Revenue Expenses (Loss) Share (Baht) Revenue Expenses (Loss) Share (Baht) Progress Gunpai Co., Ltd. 365 329 36 179.64 295 261 34 170.96 Progress Plus Co., Ltd. 319 316 3 13.72 238 228 10 39.84 Progress Facilities Management Co., Ltd. 77 72 5 100.89 73 68 5 96.04 Progress Services Co., Ltd. 167 157 10 520.10 162 151 11 550.42 Progress Management Co., Ltd. 62 57 5 78.06 55 48 7 110.21 Progress Storage Co., Ltd. 36 30 6 192.60 33 27 6 184.57 Progress Appraisal Co., Ltd. 205 195 10 1,982.05 157 166 (9) (1,662.00) Progress Software Co., Ltd. 241 218 23 226.83 256 210 46 461.09 Progress HR Co., Ltd. 415 417 (2) (155.00) 299 291 8 800.29 Progress Services Support Co., Ltd. 102 100 2 56.35 63 62 1 21.59 1,989 1,891 98 1,631 1,512 119

ANNUAL REPORT 2007 121 8 LOANS AND ACCRUED INTEREST RECEIVABLES Loans and accrued interest receivables as of 31 December 2007 and 2006 consisted of: 1. Classified by Type of Loans ( Million Baht ) Consolidated The Bank 2007 2006 2007 2006 Overdrafts 143,053 131,095 141,737 128,125 Loans 305,247 272,105 325,268 277,940 Bills 262,254 236,567 268,992 245,844 Others 51,951 37,440 25,308 21,427 Total 762,505 677,207 761,305 673,336 Add Accrued interest receivable 1,263 1,812 1,246 1,628 Total 763,768 679,019 762,551 674,964 Less Allowance for doubtful accounts (24,217) (31,703) (22,617) (26,712) Less Revaluation allowance for debt restructuring (1,635) (1,290) (1,630) (1,259) Total 737,916 646,026 738,304 646,993

2. Classified by Maturity of Contracts ( Million Baht ) Consolidated The Bank 2007 2006 2007 2006 Within 1 year 453,108 429,598 454,264 432,589 Over 1 year 310,660 249,421 308,287 242,375 Total 763,768 679,019 762,551 674,964

3. Classified by Currencies and Residency of Borrowers ( Million Baht ) Consolidated 2007 2006 Domestic Foreign Total Domestic Foreign Total Baht 737,926 - 737,926 659,985 12 659,997 US Dollars 22,504 459 22,963 16,376 451 16,827 Other currencies 2,874 5 2,879 2,187 8 2,195 Total 763,304 464 763,768 678,548 471 679,019

( Million Baht ) The Bank 2007 2006 Domestic Foreign Total Domestic Foreign Total Baht 736,708 - 736,708 655,930 12 655,942 US Dollars 22,504 459 22,963 16,376 451 16,827 Other currencies 2,875 5 2,880 2,187 8 2,195 Total 762,087 464 762,551 674,493 471 674,964

122 ANNUAL REPORT 2007 4. Classified by Type of Business and Account Status ( Million Baht ) Consolidated 2007 Special Sub- Doubtful Pass Mention Standard Doubtful of Loss Total Agricultural and mining 21,828 506 225 176 723 23,458 Manufacturing and commerce 434,363 6,015 3,458 6,014 10,982 460,832 Property development and construction 40,938 1,041 365 1,366 2,220 45,930 Infrastructure and services 61,234 1,042 260 2,633 1,459 66,628 Housing loans 91,093 1,177 455 649 2,277 95,651 Others 67,048 1,244 656 444 816 70,208 Total 716,504 11,025 5,419 11,282 18,477 762,707 Kasikorn Securities Public Co., Ltd. 1,061 Total 763,768

( Million Baht ) Consolidated 2006 Special Sub- Doubtful Pass Mention Standard Doubtful of Loss Total Agricultural and mining 17,730 487 224 177 1,058 19,676 Manufacturing and commerce 387,605 4,515 4,389 6,026 16,344 418,879 Property development and construction 35,735 701 750 1,437 4,667 43,290 Infrastructure and services 57,555 864 1,386 1,754 2,570 64,129 Housing loans 72,119 1,217 670 635 2,968 77,609 Others 52,386 685 358 269 1,423 55,121 Total 623,130 8,469 7,777 10,298 29,030 678,704 Kasikorn Securities Public Co., Ltd. 315 Total 679,019

( Million Baht ) The Bank 2007 Special Sub- Doubtful Pass Mention Standard Doubtful of Loss Total Agricultural and mining 20,694 381 210 172 688 22,145 Manufacturing and commerce 424,487 5,526 3,380 6,000 9,863 449,256 Property development and construction 39,967 964 356 1,364 1,508 44,159 Infrastructure and services 59,183 695 239 2,619 944 63,680 Housing loans 91,021 1,142 455 649 2,010 95,277 Others 85,707 709 547 416 655 88,034 Total 721,059 9,417 5,187 11,220 15,668 762,551

ANNUAL REPORT 2007 123 ( Million Baht ) The Bank 2006 Special Sub- Doubtful Pass Mention Standard Doubtful of Loss Total Agricultural and mining 17,580 485 224 177 949 19,415 Manufacturing and commerce 380,129 4,342 4,371 6,016 12,537 407,395 Property development and construction 34,701 593 746 1,436 2,491 39,967 Infrastructure and services 55,692 823 1,385 1,749 1,568 61,217 Housing loans 72,042 1,145 670 635 2,441 76,933 Others 68,221 529 327 250 710 70,037 Total 628,365 7,917 7,723 10,263 20,696 674,964

5. Classified by Account Status ( Million Baht ) Consolidated 20072007 Outstanding Debt affter Deduction of Loans and Collateral Value/ % Used for Accrued Interest NPV of Cash Flow from Calculating Allowance for Receivables Debtors or Sale of Collateral The Allowance Doubtful Accounts Pass 716,504 330,160 1 3,302 Special Mention 11,025 3,802 2 85* Sub-Standard 5,419 2,505 100 2,505 Doubtful 11,282 5,863 100 5,863 Doubtful of Loss 18,477 8,906 100 8,906 Allowance established in excess of BoT regulations - - 3,556 Kasikorn Securities Public Co.,Ltd. 1,061 - - Total 763,768 351,236 24,217 * Includes the allowance for doubtful accounts of asset management companies as per the BoT’s audit results, which has been transferred from the allowance provided in excess of the BoT’s regulations.

124 ANNUAL REPORT 2007 ( Million Baht ) Consolidated 2006 Outstanding Debt affter Deduction of Loans and Collateral Value/ % Used for Accrued Interest NPV of Cash Flow from Calculating Allowance for Receivables Debtors or Sale of Collateral The Allowance Doubtful Accounts Pass 623,130 313,721 1 3,152* Special Mention 8,469 2,114 2 42 Sub-Standard 7,777 3,242 100 3,242 Doubtful 10,298 3,805 100 3,805 Doubtful of Loss 29,030 14,130 100 14,130 Allowance established in excess of BoT regulation - - 7,332 Kasikorn Securities Public Co.,Ltd. 315 - - Total 679,019 337,012 31,703 * Includes the allowance for doubtful accounts of asset management companies as per the BoT’s audit results, which has been transferred from the allowance provided in excess of the BoT’s regulations.

( Million Baht ) The Bank 2007 Outstanding Debt affter Deduction of Loans and Collateral Value/ % Used for Accrued Interest NPV of Cash Flow from Calculating Allowance for Receivables Debtors or Sale of Collateral The Allowance Doubtful Accounts Pass 721,059 355,265 1 3,553 Special Mention 9,417 3,708 2 74 Sub-Standard 5,187 2,477 100 2,477 Doubtful 11,221 5,847 100 5,847 Doubtful of Loss 15,667 7,813 100 7,813 Allowance established in excess of BoT regulations - - 2,853 Total 762,551 375,110 22,617

ANNUAL REPORT 2007 125 ( Million Baht ) The Bank 20062007 Outstanding Debt affter Deduction of Loans and Collateral Value/ % Used for Accrued Interest NPV of Cash Flow from Calculating Allowance for Receivables Debtors or Sale of Collateral The Allowance Doubtful Accounts Pass 628,365 330,787 1 3,308 Special Mention 7,917 2,056 2 40 Sub-Standard 7,723 3,226 100 3,226 Doubtful 10,263 3,794 100 3,794 Doubtful of Loss 20,696 10,201 100 10,201 Allowance established in excess of BoT regulations - - 6,143 Total 674,964 350,064 26,712

Unearned interest are as follows: ( Million Baht ) 2007 2006 The Bank and The Bank and The Bank Subsidiaries The Bank Subsidiaries Unearned interest 347 3,228 408 1,721

Non-performing loans (NPL) - NPL net refers to the non-performing loan value, net According to the BoT’s directive dated 16 January 2003, of total allowances for doubtful accounts. non-performing loans (NPL) were redefined as sub-quality - The ratio of total loans, net of allowances for doubtful loans, being outstanding loans of sub-standard, doubtful, accounts means the ratio of NPL net to total loans, net of doubtful of loss and loss loan accounts in accordance with total allowances for doubtful accounts. the BoT’s guidelines. This included fully-provisioned loans which had previously been written-off. Previously, commercial banks were required to report only information on non-performing loans (NPL gross) and According to the Bank of Thailand’s new regulations, the percentage of NPLs to total loans. dated 7 December 2006, commercial banks are required to report additional information on non-performing loans, which includes:

126 ANNUAL REPORT 2007 As of 31 December 2007 and 2006, non-performing loans, net, (including financial institutions) based on the above directive can be summarized as follows: ( Million Baht ) 2007 The Bank The Bank and Subsidiaries Non-performing loans, net 15,776 17,600 Total loans used for NPL net ratio calculation (1) 769,419 769,842 (2) Ratio of total loans 2.05 2.29

( Million Baht ) 2006 The Bank The Bank and Subsidiaries Non-performing loans, net 20,886 27,282 Total loans used for NPL net ratio calculation (1) 657,798 659,545 (2) Ratio of total loans 3.18 4.14 (1) Total loans used for NPL ratio calculation are loans to general customers as presented in the balance sheet and loans to financial institutions as included in interbank and money market items. (2) Excluding loans to subsidiaries, as of 31 December 2007 and 2006 amounting to Baht 29,406 million and Baht 21,358 million, respectively.

As of 31 December 2007 and 2006, non-performing loans, gross, (including financial institutions) based on the above directive can be summarized as follows: ( Million Baht ) 2007 The Bank The Bank and Subsidiaries Non-performing loans, gross 31,915 34,980 Total loans used for NPL gross ratio calculation (1) 785,557 787,222 (2) Ratio of total loans 4.06 4.44

( Million Baht ) 2006 The Bank The Bank and Subsidiaries Non-performing loans, gross 38,291 46,495 Total loans used for NPL gross ratio calculation (1) 675,202 678,758 (2) Ratio of total loans 5.67 6.85 (1) Total loans used for NPL ratio calculation are loans to general customers as presented in the balance sheet and loans to financial institutions as included in interbank and money market items. (2) Excluding loans to subsidiaries, as of 31 December 2007 and 2006 amounting to Baht 29,406 million and Baht 21,358 million, respectively.

ANNUAL REPORT 2007 127 As of 31 December 2007 and 2006, non-accrual loans, gross, (including financial institutions) based on the accrual basis can be summarized as follows: Non-accrual loans (including financial institutions) were as follows: ( Million Baht ) 2007 Phethai - AMC (Original Kasikorn Kasikorn The Bank and The Bank principal) Factoring Leasing Subsidiaries Non-accrual loans 48,357 7,118 241 204 55,920 Total loans used for ratio Calculation* 785,557 7,118 3,718 20,234 787,221 ** Percentage of total loans 6.16 100.00 6.47 1.01 7.10

( Million Baht ) 2006 Phethai - AMC (Original Kasikorn Kasikorn The Bank and The Bank principal) Factoring Leasing Subsidiaries Non-accrual loans 49,637 9,358 232 77 59,304 Total loans used for ratio Calculation* 675,202 9,358 4,277 11,279 678,758 ** Percentage of total loans 7.35 100.00 5.42 0.68 8.74 * Total loans used for NPL ratio calculation are loans to general customers as presented in the balance sheet and loans to financial institutions as included in interbank and money market items. ** Excluding loans to subsidiaries, as of 31 December 2007 and 2006 amounting to Baht 29,406 million and Baht 21,358 million, respectively.

As of 31 December 2007 and 2006 loans to listed companies that meet SET’s criteria for delisting were as follows: ( Million Baht ) Consolidated 2007 2006 Loans and Allowance Loans and Allowance Accrued for Accrued for Interest Collateral Doubtful Interest Collateral Doubtful Receivables Value Accounts Receivables Value Accounts Listed companies which meet SET’s criteria for delisting 37 31 2 69 27 15

( Million Baht ) The Bank 2007 2006 Loans and Allowance Loans and Allowance Accrued for Accrued for Interest Collateral Doubtful Interest Collateral Doubtful Receivables Value Accounts Receivables Value Accounts Listed companies which meet SET’s criteria for delisting 37 31 2 69 27 15

128 ANNUAL REPORT 2007 As of 31 December 2007 and 2006 the outstanding balances of loans to the Bank’s wholly owned subsidiaries were as follows: ( Million Baht ) 2007 Type of loans Maturity Interest rate Amount Phethai Asset Management Co., Ltd. Bills 3 Months 3-Month Fixed Deposit 3,745 Kasikorn Factoring Co., Ltd. Bills 1-6 Months Money Market Rate 2,305 + Spread 1% at least Bills At Call Money Market Rate 560 + Spread 1% at least Loans 1-4 Years Fixed Rate 959 Kasikorn Leasing Co., Ltd. Bills 7-120 Days Money Market Rate 240 Loans 1-5 Years Fixed Rate 21,596

( Million Baht ) 2006 Type of loans Maturity Interest rate Amount Phethai Asset Management Co., Ltd. Bills 3 Months 3-Month Fixed Deposit 6,550 Kasikorn Factoring Co., Ltd. Bills 1-6 Months Money Market Rate 2,690 + Spread 1% at least Bills At Call Money Market Rate 540 + Spread 1% at least Loans 1-2 Years Fixed Rate 735 Kasikorn Leasing Co., Ltd. Bills 7-120 Days Money Market Rate 905 Loans 1-5 Years Fixed Rate 9,938

ANNUAL REPORT 2007 129 Transferring of Sub-Standard Quality Assets which are payable on the fifth and the tenth anniversaries to Thai Asset Management Corporation of the transfers, starting from 1 July 2001. In the case of (TAMC) losses, the Bank will first be responsible for any loss, not In accordance with the Emergency Decree on the Thai exceeding 20% of the transfer price. The second portion of Asset Management Corporation B.E. 2544, on 12 October losses, again not exceeding 20% of the transfer price, will 2001, the Bank signed an Asset Transfer Agreement with be equally shared by TAMC and the Bank. Any remaining TAMC to transfer eligible sub-standard quality assets loss would then be absorbed by TAMC. In addition, expenses outstanding as of 31 December 2000 to TAMC. All rights of TAMC are included in the calculation of the gain or loss and duties associated with each transferred sub-standard sharing. In the case of profit, the first portion of profits up to quality asset were transferred to TAMC at a price determined 20% of the transfer price is to be shared equally by TAMC by the appraised value of the underlying collateral assets, and the Bank. Should there be any profit over and above this, provided that the price did not exceed the book value of the Bank is entitled to the remainder up to the gross book credits extended, less existing provisions outstanding, as value of the assets, less the transfer price and the Bank’s required by law on the transfer date. TAMC has 180 days share in the first portion of the profits. As of 31 December from the date of each transfer to examine any transferred 2007 and 2006 the Bank has set up an estimate for loss assets. TAMC will then quote the transfer price within seven sharing amounting to Baht 782 million and Baht 694 million, days after the end of the examination period. After confirming respectively. the price, TAMC will issue non-transferable 10-year callable For the year ended 31 December 2007, the Bank did not promissory notes guaranteed by FIDF. The notes bear transfer any sub-standard quality assets to TAMC. The gross interest equal to the weighted average of the deposit rates book value of the assets transferred before deducting of five major banks, and are paid at the end of each year allowance for doubtful accounts up to 31 December 2007 by means of a non-transferable, extendable one-year was Baht 14,557 million and the estimated total transfer promissory note, guaranteed by FIDF. The rights to these price up to 31 December 2007 was Baht 10,123 million. As notes and the received notes are included in investments of 31 December 2007, the Bank received promissory notes in held-to-maturity debt instruments. from TAMC of Baht 10,123 million. In accordance with the Emergency Decree and the Asset As at 31 December 2007, the Bank was informed that Transfer Agreement, TAMC and the Bank will share jointly the loss sharing amounting to Baht 29 million was allocated to profits and responsibility for any losses on transferred assets, the Bank from TAMC.

9 TROUBLED DEBT RESTRUCTURING During the years ended 31 December 2007 and 2006, the Bank and its subsidiaries engaged in debt restructuring contracts as follows:

( Million Baht ) Consolidated The Bank 2007 2006 2007 2006 Total Total Total Total Outstanding Outstanding Outstanding Outstanding Debt Before Debt Before Debt Before Debt Before Cases Restructuring Cases Restructuring Cases Restructuring Cases Restructuring Debt restructuring contracts that incurred losses 738 7,469 2,269 14,003 630 6,674 1,975 11,263 Debt restructuring contracts that incurred no losses 23,457 22,491 14,075 17,827 23,403 22,270 13,974 17,273 Total 24,195 29,960 16,344 31,830 24,033 28,944 15,949 28,536

130 ANNUAL REPORT 2007 Losses on debt restructuring for the years ended 31 December 2007 and 2006 were as follows: ( Million Baht ) Consolidated 2007 The Outstanding Debt Transferred Assets Before After Loss on Debt Types of Restructuring Cases Restructuring Restructuring Types Fair Value Restructuring Transfers of assets 135 1,029 - Cash, land, 631 398 premises and investments Changes of repayment conditions 586 6,084 5,956 - - 967 Debt restructuring in various forms 17 356 302 Cash, land, 51 59 premises and investments Total 738 7,469 6,258 682 1,424

( Million Baht ) Consolidated 2006 The Outstanding Debt Transferred Assets Before After Loss on Debt Types of Restructuring Cases Restructuring Restructuring Types Fair Value Restructuring Transfers of assets 1,723 6,255 - Cash, land, 3,524 2,731 premises and investments Changes of repayment conditions 500 5,910 5,546 - - 687 Debt restructuring in various forms 46 1,850 271 Cash, land, 372 1,282 premises and investments Total 2,269 14,015 5,817 3,896 4,700

ANNUAL REPORT 2007 131 ( Million Baht ) The Bank 2007 The Outstanding Debt Transferred Assets Before After Loss on Debt Types of Restructuring Cases Restructuring Restructuring Types Fair Value Restructuring Transfers of assets 78 697 - Cash, land, 374 323 premises and investments Changes of repayment conditions 536 5,628 5,629 - - 828 Debt restructuring in various forms 16 349 298 Cash, land, 51 56 premises and investments Total 630 6,674 5,927 425 1,207

( Million Baht ) The Bank 2006 The Outstanding Debt Transferred Assets Before After Loss on Debt Types of Restructuring Cases Restructuring Restructuring Types Fair Value Restructuring Transfers of assets 1,622 5,892 - Cash, land, 3,276 2,616 premises and investments Changes of repayment conditions 310 3,527 3,440 - - 363 Debt restructuring in various forms 43 1,844 269 Cash, land, 370 1,281 premises and investments Total 1,975 11,263 3,709 3,646 4,260

132 ANNUAL REPORT 2007 The Bank and its subsidiaries measure the expected recoverable amounts of loans restructured by changing repayment conditions by using the present value of future cash flows discounted by the market rate. The terms of debt restructuring agreements with debts which were restructured by changing the repayment conditions and restructured in various other ways and which resulted in losses on debt restructuring during the years ended 31 December 2007 and 2006 are as follows:

( Million Baht ) Consolidated 2007 2006 The Outstanding Debt The Outstanding Debt Terms of debt Before After End of Before After End of restructuring agreements Cases Restructuring Restructuring Year Cases Restructuring Restructuring Year Less than 5 years 468 4,326 4,223 3,749 393 4,068 2,492 1,733 5 to 10 years 54 1,511 1,461 1,406 77 2,415 2,185 1,993 Over 10 years 81 603 574 528 76 1,277 1,140 1,132 Total 603 6,440 6,258 5,683 546 7,760 5,817 4,858

( Million Baht ) The Bank 2007 2006 The Outstanding Debt The Outstanding Debt Terms of debt Before After End of Before After End of restructuring agreements Cases Restructuring Restructuring Year Cases Restructuring Restructuring Year Less than 5 years 430 4,101 4,061 3,680 262 2,964 1,530 960 5 to 10 years 49 1,344 1,334 1,308 54 2,090 1,862 1,705 Over 10 years 73 532 532 521 37 317 317 316 Total 552 5,977 5,927 5,509 353 5,371 3,709 2,981

ANNUAL REPORT 2007 133 The Bank and its subsidiaries recognized interest income from debt restructuring for the years ended 31 December 2007 and 2006 as follows: ( Million Baht ) Consolidated The Bank 2007 2006 2007 2006 Debt restructuring contracts that incurred losses 678 705 625 604

As of 31 December 2007 and 2006 the Bank had commitments to extend additional loans to these borrowers as follows: ( Million Baht ) Consolidated and The Bank 2007 2006 Debt restructuring contracts that incurred losses 237 107

As of 31 December 2007 and 2006 the Bank and its subsidiaries had outstanding balances on debtors which were restructured during the period as follows: ( Million Baht ) Consolidated The Bank 2007 2006 2007 2006 Debt restructuring contracts that incurred losses 5,571 4,858 5,510 2,981 Debt restructuring contracts that incurred no losses 13,922 11,585 13,910 11,516 Total 19,493 16,443 19,420 14,497

As of 31 December 2007 and 2006 the Bank and its subsidiaries had outstanding balances relating to all restructured debtors which had been performing in accordance with debt restructuring agreements as follows: ( Million Baht ) Consolidated The Bank 2007 2006 2007 2006 Debt restructuring contracts that incurred losses 12,196 15,725 11,714 14,539 Debt restructuring contracts that incurred no losses 28,441 27,470 28,334 27,188 Total 40,637 43,195 40,048 41,727

134 ANNUAL REPORT 2007 10 ALLOWANCE FOR DOUBTFUL ACCOUNTS The movements in the allowance for doubtful accounts during the year were as follows: ( Million Baht ) Consolidated 2007 Allowances Established in Excess of Special Sub - Doubtful BoT’s Pass Mention Standard Doubtful of Loss Regulations Total Balance at beginning of the year 3,157 42 3,242 3,805 14,130 7,327 31,703 Transferred from investments in receivables - - - - 9 - 9 Doubtful accounts (reversal) 145 43 (737) 2,058 6,414 (3,629) 4,294 Bad debts recovered - - - - 456 - 456 Bad debts written off - - - - (6,548) - (6,548) Others - - - - (5,555) (142) (5,697) Balance at end of the year 3,302 85 2,505 5,863 8,906 3,556 24,217

( Million Baht ) Consolidated 2006 Allowances Established in Excess of Special Sub - Doubtful BoT’s Pass Mention Standard Doubtful of Loss Regulations Total Balance at beginning of the year 5,688 102 205 2,619 14,730 11,423 34,767 Transferred from investments in receivables - - - - 89 - 89 Doubtful accounts (reversal) (2,531) (60) 3,037 1,186 3,159 (4,096) 695 Bad debts recovered - - - - 605 - 605 Bad debts written off - - - - (7,295) - (7,295) Others - - - - 2,842 - 2,842 Balance at end of the year 3,157 42 3,242 3,805 14,130 7,327 31,703

ANNUAL REPORT 2007 135 ( Million Baht ) The Bank 2007 Allowances Established in Excess of Special Sub - Doubtful BoT’s Pass Mention Standard Doubtful of Loss Regulations Total Balance at beginning of the year 3,313 40 3,226 3,794 10,201 6,138 26,712 Doubtful accounts (reversal) 240 34 (749) 2,053 5,991 (3,285) 4,284 Bad debt recovered - - - - 456 - 456 Bad debt written off - - - - (4,609) - (4,609) Others - - - - (4,226) - (4,226) Balance at end of the year 3,553 74 2,477 5,847 7,813 2,853 22,617

( Million Baht ) The Bank 2006 Allowances Established in Excess of Special Sub - Doubtful BoT’s Pass Mention Standard Doubtful of Loss Regulations Total Balance at beginning of the year 5,728 97 202 2,606 9,304 8,784 26,721 Transferred from investments in receivables - - - - 83 - 83 Doubtful accounts (reversal) (2,420) (57) 3,024 1,188 2,002 (2,641) 1,096 Bad debt recovered - - - - 605 - 605 Bad debt written off - - - - (4,902) - (4,902) Others - - - - 3,109 - 3,109 Balance at end of the year 3,308 40 3,226 3,794 10,201 6,143 26,712

11 REVALUATION ALLOWANCE FOR DEBT RESTRUCTURING The movements in the revaluation allowance for debt restructuring during the year were as follows: ( Million Baht ) Consolidated The Bank 2007 2006 2007 2006 Balance at beginning of the year 1,289 2,672 1,259 2,355 Increase 1,068 552 1,057 505 Decrease due to write off (630) (2,076) (630) (2,076) Change of classification (5) (115) - 167 Amortization to interest income (168) (136) (137) (84) Others 81 392 81 392 Balance at end of the year 1,635 1,289 1,630 1,259

136 ANNUAL REPORT 2007 12 PROPERTIES FORECLOSED Properties foreclosed of 31 December 2007 and 2006 consisted: ( Million Baht ) Consolidated 2007 Type of Foreclosed Properties Beginning Balance Addition Disposal Ending Balance 1. Assets acquired from debt repayment 1.1 Immovable assets 18,021 4,549 (5,888) 16,682 1.2 Movable assets 28 - - 28 Total 18,049 4,549 (5,888) 16,710 2. Others 679 28 (74) 633 Total Foreclosed Properties 18,728 4,577 (5,962) 17,343 Less Allowances for impairment (2,232) (695) 949 (1,978) Total Foreclosed Properties - net 16,496 3,882 (5,013) 15,365

( Million Baht ) Consolidated 2006 Type of Foreclosed Properties Beginning Balance Addition Disposal Ending Balance 1. Assets acquired from debt repayment 1.1 Immovable assets 19,984 5,186 (7,149) 18,021 1.2 Movable assets 28 - - 28 Total 20,012 5,186 (7,149) 18,049 2. Others 752 1 (74) 679 Total Foreclosed Properties 20,764 5,187 (7,223) 18,728 Less Allowances for impairment (3,301) (651) 1,720 (2,232) Total Foreclosed Properties - net 17,463 4,536 (5,503) 16,496

( Million Baht ) The Bank 2007 Type of Foreclosed Properties Beginning Balance Addition Disposal Ending Balance 1. Assets acquired from debt repayment 1.1 Immovable assets 13,301 3,872 (4,546) 12,627 1.2 Movable assets 28 - - 28 Total 13,329 3,872 (4,546) 12,655 2. Others 106 23 (64) 65 Total Foreclosed Properties 13,435 3,895 (4,610) 12,720 Less Allowances for impairment (1,796) (429) 757 (1,468) Total Foreclosed Properties - net 11,639 3,466 (3,853) 11,252

ANNUAL REPORT 2007 137 ( Million Baht ) The Bank 2006 Type of Foreclosed Properties Beginning Balance Addition Disposal Ending Balance 1. Assets acquired from debt repayment 1.1 Immovable assets 15,036 4,197 (5,932) 13,301 1.2 Movable assets 28 - - 28 Total 15,064 4,197 (5,932) 13,329 2. Others 161 1 (56) 106 Total Foreclosed Properties 15,225 4,198 (5,988) 13,435 Less Allowances for impairment (2,622) (541) 1,367 (1,796) Total Foreclosed Properties - net 12,603 3,657 (4,621) 11,639

Transfer of Non-Performing Assets to before confirming to the Bank the purchase price on individual Bangkok Commercial Asset Management assets within 30 days from the date of asset classification Co., Ltd. (BAM) made by the Bank. The Bank and BAM will enter into a sell On 9 October 2006, the Bank entered into an agreement and purchase agreement within 30 days from the signing date with Bangkok Commercial Asset Management Co., Ltd. (BAM) of a NPA transfer agreement. The Bank will then submit for the transfer of non-performing assets (NPA), as of 30 relevant ownership documents to BAM within 30 days from November 2006. The transfer price would be prorated by the signing date of the NPA transfer agreement. Payment for the appraised value of each property varied by liquidity NPA will be in the form of non-interest bearing promissory condition of the asset. This is in compliance with Bank of notes. The term of the promissory notes will depend upon Thailand Directive, Re: “Requirements and Operational the liquidity of NPA being transferred. Procedures for Asset Management Companies,” dated As of 31 December 2007, the Bank has transfered NPA 27 November 2000, and the Royal Decree on Asset under the terms stated above and received non-interest Management Companies, B.E. 2541. The Bank is required bearing promissory notes in the amount of Baht 318 million. to complete the classification of NPA within 120 days from The stated non-interest bearing promissory notes are the agreement-signing date. BAM will examine the assets accounted for using the amortized cost method.

138 ANNUAL REPORT 2007 13 CLASSIFIED ASSETS As of 31 December 2007 and 2006, assets of the Bank and its subsidiaries, classified as investments, loans and accrued interest receivable (including financial institutions), properties foreclosed and other assets, were categorized by quality in compliance with the BoT’s regulations, taking into account analyses of each loan and appraisal of the financial standing of each borrower, as follows: ( Million Baht ) Consolidated 2007 Loans and Accrued Properties Investments Interest Receivables Foreclosed Other Assets Total Pass - 739,772 - - 739,772 Special Mention - 10,924 - - 10,924 Sub-Standard - 5,419 - - 5,419 Doubtful - 11,282 - - 11,282 Doubtful of Loss 4,712 18,477 1,200 617 25,006 Total 4,712 785,874 1,200 617 792,403

( Million Baht ) Consolidated 2006 Loans and Accrued Properties Investments Interest Receivables Foreclosed Other Assets Total Pass - 623,846 - - 623,846 Special Mention - 8,382 - - 8,382 Sub-Standard - 7,777 - - 7,777 Doubtful - 10,298 - - 10,298 Doubtful of Loss 5,459 29,030 1,340 705 36,534 Total 5,459 679,333 1,340 705 686,837

ANNUAL REPORT 2007 139 ( Million Baht ) The Bank 2007 Loans and Accrued Properties Investments Interest Receivables Foreclosed Other Assets Total Pass - 744,328 - - 744,328 Special Mention - 9,315 - - 9,315 Sub-Standard - 5,187 - - 5,187 Doubtful - 11,221 - - 11,221 Doubtful of Loss 4,672 15,668 793 614 21,747 Total 4,672 785,719 793 614 791,798

( Million Baht ) The Bank 2006 Loans and Accrued Properties Investments Interest Receivables Foreclosed Other Assets Total Pass - 629,081 - - 629,081 Special Mention - 7,830 - - 7,830 Sub-Standard - 7,723 - - 7,723 Doubtful - 10,263 - - 10,263 Doubtful of Loss 5,263 20,696 995 691 27,645 Total 5,263 675,593 995 691 682,542

140 ANNUAL REPORT 2007 3,308

Value ( Million Baht ) 1,079

590 22,293 24,534

- - 3,755 3,613 (8) Allowance Book

of Impairment

8 - 8 3,563 3,791 598

100 - - - follows:

as (1) (63) 17,935

(14) summarized Accumulated Change

of Disposal out Balance Balance Balance Decrease Balance Balance are Depreciation for 47 2006

Change Depreciation and 68

2007 2007 Consolidated 3,408

December 31 (15) (1,243) Cost ended

of

- - - (10) 6,957 3,212 137 - (5) 3,344 -

years the

for

equipment 1,147 3,519

Change

Beginning Purchase Balance in Transfer Disposal out Balance Balance Transfer Ending Beginning Transfer Ending Beginning Ending Beginning Ending and cost 6,127 cost - 6,967 - - - - 6,127 ------6,127 6,127 premises in PREMISES AND EQUIPMENT PREMISES Land Cost Building Revalued Cost Revalued 2,925 - 9,074 - - - 124 (16) 2,909 - - (14) 9,184 3,640 - 183 - - - (7) 3,816 - 159 431 - (8) 159 423 5,275 2,494 5,209 2,486 Equipment Others 14,322 34 1,086 (919) (49) 14,474 10,751 879 (905) (50) 10,675 Total 40,562 3,553 1,210 (934) (1,332) 43,059 17,671 1,246 (919) 14 Changes

ANNUAL REPORT 2007 141

to 1,079

Value fully ( Million Baht ) respectively). amounted were 598 21,441 22,293

2006 million, Balance Balance Balance Ending Beginning Ending and - - 3,897 3,755 8 8 2,538 3,563 142 Allowance Book respectively, of Increase 2007 Baht (Decrease) Impairment

- - and 699 (101) million,

December million 8,330 31 137 Baht ended Baht and of years million (14) - 68 - - - 667 Accumulated Change the

of Disposal out Balance Balance 7,883 the Depreciation for revaluation 21 for

Baht Change Depreciation of building 61 on cost 2006

subsidiaries Consolidated its 1,147 original

and an depreciation with Bank the (17) (1,833) of (including Cost

of

equipment 4 income and

of respectively premises million,

statement 728 2,265 2006, the 1,101

in Change

Beginning Transfer Transfer Ending Beginning Transfer Ending Beginning Blne Purchase Balance in Disposal out Balance Balance and Baht use. in 2007 and cost 6,127 cost - 6,967 - - - - - 6,127 - - - 6,967 - 3,070 142 - - - - - 3,212 - - - 6,127 6,127 presented still but million December 31 1,246 of Land Cost Building Revalued Cost Revalued 2,975 29 13 9,460 (91) 2 (1) 2,925 32 (420) - - - 9,074 3,524 197 - (81) - - 3,640 - 250 449 (91) (18) 159 431 5,686 2,526 5,275 2,494 Equipment 12,732 20 1,762 (174) (18) 14,322 10,194 741 (169) (15) 10,751 Others Total 38,989 2,316 1,811 (702) (1,852) 40,562 16,849 1,101 (264) (15) 17,671 depreciated Depreciation As Baht

142 ANNUAL REPORT 2007 2,956

Value ( Million Baht ) 991

590 22,004 23,982

- - - - - 6,127 6,127 - 159 5,170 - 5,115 - 3,755 8 3,613 3,500 3,717

(8) Allowance Book of Impairment

598

- 431 - (8) - 423 2,461 2,454

(60) 17,659

Accumulated Change of Disposal out Balance Balance Balance Decrease Balance Balance ------Depreciation for

Change Depreciation

Bank 2007 The 2,956 -

- (15) - 2,877 - - - 6,127 (14) - 8,986 - (10) 3,546 6,957 173 3,212 137 - - (7) 3,712 (5) 159 3,344 - Cost

of

1,211 (914) (1,330) 42,231 17,454 1,166 (901)

991 3,207 - - (1,242)

Change

Beginning Purchase Balance in Transfer Disposal out Balance Balance Transfer Ending Beginning Transfer Ending Beginning Ending Beginning Ending cost 6,127 cost - 6,967 - - - Total 40,056 3,208 Land Cost Building Revalued Cost Equipment Revalued 2,892 Others - 8,875 - 14,204 - 1 125 1,086 (914) (49) 14,328 10,696 856 (901) (48) 10,603 8

ANNUAL REPORT 2007 143

991 2007

and

Value use. in ( Million Baht ) million still December

- 577 - 3,897 3,755 - 6,127 6,127 but 31 598 20,807 22,004

1,166

of

As - 159 5,319 5,170 - 431 2,420 2,461 - - Baht 8 8 8 2,467 3,500

Allowance Book to

of depreciated Impairment

fully 590

amounted respectively).

were 2006 million,

and 142

(15) 17,454 respectively, 2007

Baht

and

Accumulated Change million, of Disposal out Balance Balance Increase Balance Balance Balance December Depreciation for million

8,285 31 1,040 (160)

137 Change Depreciation

Baht ended Baht

and Bank of 16,589

2006

years The 991 ------million the

for revaluation

7,824 (1) 2,892 - - - - - 431 Bank Baht

the building of

of Cost on

of cost

income 1,805 (163) (1,841) 40,056 of original

depreciation

an with

statement including 577 2,236 - - (1,822)

the

in Change

Beginning Purchase Balance in Transfer Disposal out Balance Balance Transfer Ending Beginning Transfer Ending Beginning Ending Beginning Ending equipment and respectively

cost 6,967 - - - - 6,967 3,070 142 - - 3,212 - cost 6,127 - - - - 6,127 ------presented million, premises

1,040

2006, Total 37,986 2,269 Land Cost Building Cost Revalued 2,851 29 13 8,847 - - 28 - - 8,875 3,369 177 - - 3,546 159 Revalued Equipment 12,617 4 1,764 (163) (18) 14,204 10,150 721 (160) (15) 10,696 - Others Baht and Depreciation

144 ANNUAL REPORT 2007 1 and to

Value Value ( Million Baht ) ( Million Baht ) million

1 - amounted

1,260

2006

Baht

and of

Allowance Book cost 2007

of Impairment - 269 1,311 1,167

(6) 571 433 563 Amortization Book original (11) 4,050 5,319 6,819

an

December

31

with

1 - 12

Accumulated ended follows:

assets of

(4) 3,243 54 (54) - 4,900 5,319 as

years

11 out Balance Balance Decrease Balance Balance Balance Accumulated Change 4 - 11 - - - 5 the

of intangible

for Amortization for

Amortization summarized 2006,

are (18) 143 - 125 - - - 1,454 1,311 and

2006

subsidiaries

2007 2006 2007 its

and

Consolidated Consolidated Cost Change and

2007 of use.

Cost Change - - 1,436 125 144 in Bank December

of 31 the still

- - 12 7 - - 1,436

of of December

but

As

31

12 - - 12 943 197 (6) 1,134 510 67 income 12 6,171 1,436 2,581 (465) 8,287 2,597 606 (5) 3,198 3,574 5,089 8,562 2,778 (471) 10,869 3,243 818

882 62 (1) 943 463 48 (1) 510 - - - 419 433 ended of 7,482 1,458 (378) 8,562 2,528 719 5,152 1,396 1,436 (377) 6,171 2,076 524 (3) 2,597 54 (54) - 3,022 3,574

amortized

Change Beginning Balance Increase out Transfer Ending Beginning Balance Balance Transfer Ending Beginning Ending Beginning Ending Change years respectively. fully

the Beginning Balance Increase out Transfer Ending Balance Beginning Balance Amortization out Balance Transfer Balance Ending Balance Beginning Ending statement

were for

million,

the

in

719

assets Baht

respectively,

and presented

intangible software software in million,

million

1,175 818

INTANGIBLE ASSETS INTANGIBLE Total Others Goodwill Leasehold Application Leasehold Application Goodwill Others Total Baht Baht Amortization 15 Changes

ANNUAL REPORT 2007 145 and

million, Value

Value ( Million Baht ) ( Million Baht ) million

1,152

661

Baht

Baht

and to

Allowance Book million of

Impairment amounted

(6) (5) 571 3,136 433 3,539 5,048 563 1,224 Amortization Book

2006

Baht

and of

cost 2007

Accumulated of original

out Balance Balance Decrease Balance Balance Balance Accumulated Change December an

of 31 Amortization for

with

Amortization ended

assets

Bank Bank years 2006

2007 The The the

intangible Cost Change

for

of Cost Change 2006, Bank

of the and

of

2007

943 197 (6) 1,134 510 67 income 7,029 2,760 (471) 9,318 3,057 661 (11) 3,707 3,972 5,611 6,086 2,563 (465) 8,184 2,547 594

882 62 (1) 943 463 48 (1) 510 - - - 419 433 use. of 5,077 1,386 5,959 (377) 1,448 6,086 (378) 2,038 7,029 2,501 512 560 (3) 2,547 (4) 3,057 54 54 (54) (54) - 2,985 - 3,539 3,404 3,972

in

Change Beginning Balance Increase out Transfer Ending Beginning Balance Balance Transfer Ending Beginning Ending Beginning Ending Change

December

still

31

of Beginning Balance Increase out Transfer Ending Balance Beginning Balance Amortization out Balance Transfer Balance Ending Balance Beginning Ending but

statement

As

the

in

amortized

fully

respectively.

presented

were software software

million,

560

Leasehold Total Leasehold Total Application Application respectively, Baht Amortization

146 ANNUAL REPORT 2007 16 DEPOSITS Deposits as of 31 December 2007 and 2006 were classified as follows: 1. Classified by Type of Deposits ( Million Baht ) Consolidated The Bank 2007 2006 2007 2006 Current 42,507 41,522 42,753 41,860 Savings 391,866 345,358 392,206 345,669 Term - Less than 6 months 211,269 177,525 211,269 177,525 - 6 months and less than 1 year 66,032 107,122 66,032 107,542 - 1 year and over 1 year 72,148 74,733 72,148 74,732 Total 783,822 746,260 784,408 747,328

2. Classified by Maturity of Contracts ( Million Baht ) Consolidated The Bank 2007 2006 2007 2006 Within 1 year 781,963 743,380 782,549 744,448 Over 1 year 1,859 2,880 1,859 2,880 Total 783,822 746,260 784,408 747,328

3. Classified by Currencies and Residency of Depositors ( Million Baht ) Consolidated 2007 2006 Domestic Foreign Total Domestic Foreign Total Baht 754,724 19,968 774,692 722,735 17,471 740,206 US Dollars 8,003 195 8,198 5,314 150 5,464 Other currencies 778 154 932 513 77 590 Total 763,505 20,317 783,822 728,562 17,698 746,260

( Million Baht ) The Bank 2007 2006 Domestic Foreign Total Domestic Foreign Total Baht 755,310 19,968 775,278 723,803 17,471 741,274 US Dollars 8,003 195 8,198 5,314 150 5,464 Other currencies 778 154 932 513 77 590 Total 764,091 20,317 784,408 729,630 17,698 747,328

ANNUAL REPORT 2007 147 17 INTERBANK AND MONEY MARKET ITEMS (LIABILITIES) Interbank and money market items (liabilities) of 31 December 2007 and 2006 consisted: ( Million Baht ) Consolidated 2007 2006 At call Term Total At call Term Total 1. Domestic The BoT and FIDF - 7,475 7,475 - 10,122 10,122 Commercial banks 4,098 43 4,141 1,329 2 1,331 Other banks 98 - 98 133 - 133 Finance, securities and credit foncier companies 881 - 881 1,381 26 1,407 Other financial institutions - 1,400 1,400 898 2,581 3,479 Total Domestic 5,077 8,918 13,995 3,741 12,731 16,472 2. Foreign US Dollars 11 - 11 484 - 484 Yen 27 - 27 - - - Other currencies 152 - 152 733 - 733 Total Foreign 190 - 190 1,217 - 1,217 Total Domestic and Foreign 5,267 8,918 14,185 4,958 12,731 17,689

( Million Baht ) The Bank 2007 2006 At call Term Total At call Term Total 1. Domestic The BoT and FIDF - 7,475 7,475 - 10,122 10,122 Commercial banks 4,234 43 4,277 1,365 3 1,368 Other banks 98 - 98 133 - 133 Finance, securities and credit foncier companies 881 - 881 1,381 386 1,767 Other financial institutions - 1,400 1,400 898 2,581 3,479 Total Domestic 5,213 8,918 14,131 3,777 13,092 16,869 2. Foreign US Dollars 11 - 11 484 - 484 Yen 27 - 27 - - - Other currencies 152 - 152 733 - 733 Total Foreign 190 - 190 1,217 - 1,217 Total Domestic and Foreign 5,403 8,918 14,321 4,994 13,092 18,086

148 ANNUAL REPORT 2007 18 SHORT-TERM BORROWINGS The Bank issued short-term unsubordinated debentures in name certificates without security and not convertible, without debenture holder representative in Thai Baht currency not exceeding Baht 50,000 million, with a maturity of no more than 270 days in order to allow the Bank better flexibility and a wider variety of administration of its funding structure and to expand the investment alternatives to the public and/or depositors of the Bank. Short-term borrowings of 31 December 2007 and 2006 consisted:

( Million Baht ) Consolidated 2007 2006 Project Maturity (Days) Interest Rate (%) Amount Maturity (Days) Interest Rate (%) Amount 1/2548 63-84 3.30-3.40 1,523 2-148 4.98-5.20 6,576 2/2548 1-2 3.00 4,255 1-77 5.13-5.30 5,280 1/2549 - - - 4-154 4.98-5.20 6,545 2/2549 2-71 3.00-3.35 8,300 3-113 4.98-5.00 6,960 Other borrowings 1-278 0.50-3.60 24,997 52-359 4.60-5.00 4,065 Total 39,075 29,426

( Million Baht ) The Bank 2007 2006 Project Maturity (Days) Interest Rate (%) Amount Maturity (Days) Interest Rate (%) Amount 1/2548 63-84 3.30-3.40 1,523 2-148 4.98-5.20 6,576 2/2548 1-2 3.00 4,255 1-77 5.13-5.30 5,280 1/2549 - - - 4-154 4.98-5.20 6,545 2/2549 2-71 3.00-3.35 8,300 3-113 4.98-5.00 6,960 Other borrowings 1-278 0.50-3.60 24,600 52-359 4.60-5.00 4,253 Total 38,678 29,614

ANNUAL REPORT 2007 149 19 LONG-TERM BORROWINGS Long-term borrowings as of 31 December 2007 and 2006 consisted of : ( Million Baht ) Consolidated and The Bank 2007 2006 Domestic Foreign Total Domestic Foreign Total Other borrowings 301 - 301 1,865 - 1,865 Subordinated Debentures - 6,724 6,724 - 7,174 7,174 Subordinated Debentures KASIKORNBANK PCL No.3 12,000 - 12,000 12,000 - 12,000 Total 12,301 6,724 19,025 13,865 7,174 21,039

SUBORDINATED DEBENTURES The Board of Directors in its meeting on 25 July 1996 2003, the Bank issued the Subordinated Debentures of approved the issuance of US$ 200 million of unsecured KASIKORNBANK PUBLIC COMPANY LIMITED No.3 Due subordinated debentures, having a face value of US$ A.D. 2013 in the amount of Baht 12,000 million, with a 100,000 each, with a twenty-year maturity offered at a price ten-year maturity. In accordance with certain terms and of US$ 98,997 each on 21 August 1996 and carrying an conditions and with the approval of the Bank of Thailand, 8.25 percent coupon rate payable semi-annually. the Bank may redeem the debentures before maturity as follows: (1) on the fifth anniversary of the issue date or any SUBORDINATED DEBENTURES NO. 3 subsequent interest payment date after the fifth anniversary The Board of Directors in its meeting on 25 September of the issue date; or (2) if the Bank can demonstrate that 2003 approved the issuance of these Subordinated interest payments under the Debentures are no longer, or Debentures in name certificate without security and not will no longer be, deductible as an expense for income tax convertible, having debenture holder representative in Thai purposes; or (3) in any other case as may be later stipulated Baht currency not exceeding Baht 12,000 million, with a by the Bank of Thailand. The debentures bear interest at the maturity of no more than 10 years in order to raise long-term fixed interest rate for the first five years of 3.75 % per annum funding at a reasonable cost, to efficiently manage the and the fixed interest rate for the second five years of 4.25 % interest rate risk and liquidity risk, as well as to strengthen the per annum. Interest is payable quarterly. status of the Banks tier two capital funds. On 16 October

150 ANNUAL REPORT 2007 20 WARRANTS A resolution was passed by the Extraordinary Meeting of Shareholders held on 11 August 1999 authorizing (i) the issuance and offering for sale of 50,000,000 units of warrants for ordinary shares of the Bank to the Bank’s employees, except for directors, under a three-year scheme and (ii) allocating 50,000,000 new ordinary shares from the increase of the authorized share capital, with a par value of Baht 10 each, to support the exercise of the warrants for ordinary shares of the Bank to be issued and offered for sale to Bank employees, except for directors, under the above scheme. Warrants issued to Bank employees (except directors) consisted of: Details of Warrants Phase 1 Phase 2 Phase 3 1. Offering date 1 - 31 August 2000 7 - 28 December 2001 2 - 30 December 2002 2. Maturity five-year and four-month five-year and one-day five-year 3. Offering price zero Baht zero Baht zero Baht 4. Right to exercise 1 warrant : 1 ordinary share 1 warrant : 1 ordinary share 1 warrant : 1 ordinary share 5. Exercise price 30 Baht 30 Baht 27.82 Baht 6. Exercise date June and December June and December March, June, (every last business day) September and December 7. Term of exercise period 28 Dec 2001 - 30 Dec 2005 30 Dec 2002 - 29 Dec 2006 30 Dec 2003 - 30 Dec 2007 8. Total offered 18,500,000 units 5,000,000 units 26,500,000 units 9. Total allocated 15,612,600 units 3,962,500 units 26,490,560 units 10. Total allocated and accepted 15,586,300 units 3,885,300 units 26,048,380 units

( Number of unit ) The movements of warrants during the year Phase 2 Phase 3 Total Beginning balance as of 1 January 2006 811,520 12,082,868 12,894,388 Less Exercised (635,760) (4,784,398) (5,420,158) Less Exercise right terminated by employee’s retirement (57,340) (428,890) (486,230) Less Exercise right expired (118,420) - (118,420) Ending balance as of 31 December 2006 - 6,869,580 6,869,580 Less Exercised - (6,652,068) (6,652,068) Less Exercise right terminated by employee’s retirement - (60,176) (60,176) Less Exercise right expired - (157,336) (157,336) Ending balance as of 31 December 2007 - - -

ANNUAL REPORT 2007 151 21 SHARE CAPITAL AND EARNINGS PER SHARE The calculation of basic earnings per share for the years ended 31 December 2007 was based on profit attributable to ordinary shareholders of Baht 15,005 million and Baht 15,004 million, respectively (2006: Baht 13,664 million and Baht 13,741 million, respectively) and the weighted average number of ordinary shares outstanding for the years ended 31 December 2007 of 2,387,438,198 shares (2006: 2,381,473,532 shares). The calculation of the weighted average number of ordinary shares outstanding for the year ended 31 December 2007 is as follows:

Consolidated and The Bank Number of the weighted average Share capital number of ordinary shares (Shares) Number of shares Amount (Million Baht) For the years Ended 31 December 2007 2006 Issued ordinary shares as of 1 January 2006 2,373,293,667 23,733 2,373,293,667 Add: - The Bank registered the change in its paid-up share capital as a result of the increases in paid-up capital from the exercise of warrants for ordinary shares which were issued and offered for sale to Bank employees (except for directors) 2006 11 January : 7,894,300 79 7,678,018 11 April : 390,600 4 283,586 12 July : 362,566 3 171,847 11 October : 206,600 2 46,414 8,854,066 88 8,179,865 Issued ordinary shares as of 31 December 2006 2,382,147,733 23,821 2,382,147,733

2007 11 January : 4,460,392 45 4,338,189 11 April : 1,004,336 10 729,175 11 July : 356,852 4 170,116 10 October : 233,004 2 52,985 Issued ordinary shares as of 31 December 2007 2,388,202,317 23,882 5,290,465 Weighted average number of ordinary Shares as of 31 December 2,387,438,198 2,381,473,532

152 ANNUAL REPORT 2007 22 CAPITAL REQUIREMENTS The ratios of capital to assets (Capital Adequacy Ratio) as of 31 December 2007 and 2006 were calculated from the financial statements of the Bank and include the risk assets of the Bank’s subsidiary asset management company as follows:

( Million Baht ) 2007 2006 Tier 1 Capital Issued and fully paid up share capital, premiums on share capital 41,895 41,725 Legal reserves 2,160 1,470 Net income after appropriation 38,662 28,742 Total Tier 1 Capital 82,717 71,937 Tier 2 Capital Surplus on land revaluation 4,288 4,288 Surplus on premises revaluation 1,806 1,877 Surplus on marketable equity securities revaluation 179 105 Provision for normal assets 4,858 4,053 Subordinated debentures 18,685 19,136 Total Tier 2 Capital 29,816 29,459 Total Capital Requirements 112,533 101,396

The BoT’s regulations requires that banks registered in Thailand maintain a ratio of capital funds to assets and contingencies of not less than 8.5% and that tier-1 capital must not be less than 4.25% of such assets and contingencies. Capital adequacy ratios maintained by the Bank were as follows: Percentage 2007 2006 Total Capital Requirements 14.62 14.74 Tier-1 Capital 10.74 10.45

23 RESERVES Section 116 of the Public Companies Act B.E. 2535 requires that the Bank shall allocate not less than 5 percent of its annual net profit, less any accumulated losses brought forward, to a reserve account (“legal reserve”), until this account reaches an amount not less than 10% of the registered authorized capital. In addition, The provisions of the Civil and Commercial Code of Thailand requires that subsidiary companies shall allocate not less 5 percent of its annual net profit each time a dividend is declared, to a reserve account (“legal reserve”) until the reserve reaches 10 percent of authorized share capital. The legal reserve is not available for dividend distribution.

ANNUAL REPORT 2007 153 24 DIVIDEND PAYMENTS On 30 August 2007, the Board of Directors Meeting the Bank approved to pay dividends from the six month operating results at the rate of Baht 0.50 per share, totaling Baht 1,194 million, which was paid on 27 September 2007. On 5 April 2007, the General Meeting of Shareholders of the Bank approved to pay dividends from the operating results of 2006 at the rate of Baht 1.75 per share, totaling Baht 4,175 million, in which Baht 1,191 million was paid on 27 September 2006 and the remaining balance of Baht 2,984 million was paid on 30 April 2007. On 31 August 2006, the Board of Directors Meeting the Bank approved to pay dividends from the six month operating results at the rate of Baht 0.50 per share, totaling Baht 1,191 million, which was paid on 27 September 2006. On 7 April 2006, the General Meeting of Shareholders of the Bank approved to pay dividends from the operating results of 2005 at the rate of Baht 1.25 per share, totaling Baht 2,976 million, which was paid on 18 April 2006.

25 BAD DEBT AND DOUBTFUL ACCOUNTS (REVERSAL) Bad debt and doubtful accounts (reversal) for the years ended 31 December 2007 and 2006 consisted of: ( Million Baht ) Consolidated The Bank 2007 2006 2007 2006 General customers 4,294 695 4,284 1,096 Financial institutions (4) (43) (4) (43) Total 4,290 652 4,280 1,053

26 LOSS ON DEBT RESTRUCTURING Loss on debt restructuring for the years ended 31 December 2007 and 2006 consisted of: ( Million Baht ) Consolidated The Bank 2007 2006 2007 2006 Net present value of cash flows lower than investments in receivables (reversal for non-performing restructured loans) 1,068 552 1,057 505 Transferred assets lower than investments in receivables 529 4,215 323 3,822 Total 1,597 4,767 1,380 4,327

154 ANNUAL REPORT 2007 27 ASSETS PLEDGED AS COLLATERAL Assets pledged as collateral as of 31 December 2007 and 2006 consisted of: ( Million Baht ) Consolidated and The Bank 2007 2006 Deposits 33 438 Government bonds 3,147 5,581 State enterprise bonds 3,155 3,136 Foreign bonds 137 145 Total 6,472 9,300 The Bank has pledged these assets as collateral for derivatives, for electricity consumption, for court collateral and for repurchase agreements.

28 CONTINGENCIES Contingencies as of 31 December 2007 and 2006 consisted of:

( Million Baht ) Consolidated 2007 2006 Baht Foreign Total Baht Foreign Total Currency Currency Avals on bills 925 - 925 441 - 441 Letters of indemnity borrowing - 217 217 20 178 198 Other guarantees 65,438 7,157 72,595 49,767 6,016 55,783 Letters of credit 1,277 19,220 20,497 1,161 18,039 19,200 Exchange rate agreements Purchase agreements 38,162 299,976 338,138 25,911 173,130 199,041 Sale agreements 8,057 364,414 372,471 15,007 293,294 308,301 Interest rate agreements Purchase agreements 318,979 67,813 386,792 165,554 63,315 228,869 Sale agreements 318,579 84,325 402,904 165,129 47,826 212,955 Credit Default Swap - 1,520 1,520 - 721 721 Unused credit line of overdraft 126,933 - 126,933 118,482 - 118,482 Others 1,456 6,041 7,497 760 5,545 6,305 Total 879,806 850,683 1,730,489 542,232 608,064 1,150,296

ANNUAL REPORT 2007 155 ( Million Baht ) The Bank 2007 2006 Baht Foreign Total Baht Foreign Total Currency Currency Avals on bills 925 - 925 441 - 441 Letters of indemnity borrowing - 217 217 20 178 198 Other guarantees 65,341 6,941 72,282 49,753 5,889 55,642 Letters of credit 1,277 19,220 20,497 1,161 18,039 19,200 Exchange rate agreements Purchase agreements 38,162 299,976 338,138 25,911 173,130 199,041 Sale agreements 8,057 364,414 372,471 15,007 293,294 308,301 Interest rate agreements Purchase agreements 318,979 67,813 386,792 165,554 63,315 228,869 Sale agreements 318,579 84,325 402,904 165,129 47,826 212,955 Credit Default Swap - 1,520 1,520 - 721 721 Unused credit line of overdraft 126,933 - 126,933 118,482 - 118,482 Others 1,438 6,041 7,479 706 5,545 6,251 Total 879,691 850,467 1,730,158 542,164 607,937 1,150,101

Under normal business operations, the Bank is a defendant in various litigation against the Bank. These include cases of wrongful acts brought against the Bank, with total claims amounting to Baht 9,201 million and Baht 13,594 million as of 31 December 2007 and 2006, respectively. The Management believes that any liability resulting from this litigation will not be material to the Bank’s financial position or on the results of its operations.

156 ANNUAL REPORT 2007 29 RELATED PARTY TRANSACTIONS AND BALANCES 1. Loans and contingencies made to executive officers and to business entities where the Bank and its subsidiaries, their directors or executive officers, hold 10% or more of their paid-up capital as of 31 December 2007 and 2006 are summarized as follows: ( Million Baht ) Consolidated 2007 2006 End of Year End of Year Loans 1. Executive officers 18 23 2. Business entities where the Bank and subsidiaries, their directors or executive officers, hold 10% or more of the paid-up capital(1) 820 1,159 Total 838 1,182 Contingencies 1. Executive officers - - 2. Business entities where the Bank and subsidiaries, their directors or executive officers, hold 10% or more of the paid-up capital 44 95 Total 44 95 (1) Transactions occurring between the Bank and related business entities are charged at market price as with other normal business.

( Million Baht ) The Bank 2007 2006 End of Year End of Year Loans 1. Executive officers 18 23 2. Business entities where the Bank and subsidiaries, their directors or executive officers, hold 10% or more of the paid-up capital(1) 30,226 22,594 Total 30,244 22,617 Contingencies 1. Executive officers - - 2. Business entities where the Bank and subsidiaries, their directors or executive officers, hold 10% or more of the paid-up capital 56 152 Total 56 152 (1) Transactions occurring between the Bank and related business entities are charged at market price as with other normal business.

ANNUAL REPORT 2007 157 2. Related Party Relationships between the Bank and other business entities where control exists consisted of: % Shareholding Company Name Type of Directly and Indirectly Type of Type of 31 December 31 December share Business Relationship 2007 2006 Phethai Asset Management Co., Ltd. Subsidiary 100.00% 100.00% Ordinary share Asset Management Progress Land and Buildings Co., Ltd. Subsidiary 100.00% 100.00% Ordinary share Property Development Kasikorn Factoring Co., Ltd. Subsidiary 100.00% 100.00% Ordinary share Lending Kasikorn Research Center Co., Ltd. Subsidiary 100.00% 100.00% Ordinary share Service Progress Gunpai Co., Ltd. Subsidiary 100.00% 100.00% Ordinary share Service Progress Plus Co., Ltd. Subsidiary 100.00% 100.00% Ordinary share Service Progress Facilities Management Co., Ltd. Subsidiary 100.00% 100.00% Ordinary share Service Progress Management Co., Ltd. Subsidiary 100.00% 100.00% Ordinary share Service Progress Software Co., Ltd. Subsidiary 100.00% 100.00% Ordinary share Service Kasikorn Leasing Co., Ltd. Subsidiary 100.00% 100.00% Ordinary share Lending Kasikorn Asset Management Co., Ltd. Subsidiary 100.00% 100.00% Ordinary share Mutual Fund Management Kasikorn Securities Public Co., Ltd. Subsidiary 99.99% 99.99% Ordinary share Securities Business KHAO KLA Venture Capital Management Co., Ltd. Subsidiary 100.00% - Ordinary share Venture Capital Management K-SME Venture Capital Co., Ltd Subsidiary 100.00% - Ordinary share Venture Capital Progress Storage Co., Ltd. Subsidiary 100.00% 100.00% Ordinary share Service Progress Service Co., Ltd. Subsidiary 100.00% 100.00% Ordinary share Service Progress HR Co., Ltd. Subsidiary 100.00% 100.00% Ordinary share Service Progress Appraisal Co., Ltd. Subsidiary 100.00% 100.00% Ordinary share Service Progress Service Support Subsidiary 100.00% 100.00% Ordinary share Service

158 ANNUAL REPORT 2007 3. Significant transactions occurring between the Bank and related parties are summarized as follows: ( Million Baht ) The Bank 31 December 2007 31 December 2006 Loans Subsidiary Companies - Phethai Asset Management Co., Ltd. Beginning balance 6,550 8,925 Deduction (2,805) (2,375) Ending balance 3,745 6,550 Accrued interest receivables Subsidiary Companies - Phethai Asset Management Co., Ltd. 10 26 Deposits Subsidiary Companies - Phethai Asset Management Co., Ltd. 32 52

( Million Baht ) The Bank For the Year Ended 31 December 2007 2006 Interest income Subsidiary Companies - Phethai Asset Management Co., Ltd. 178 281

Loans to Phethai Asset Management Company Limited Income and expenses shared between the Bank and are 3-month bills with interest rates equal to the interest Phethai Asset Management Company Limited are charged rate of a 3-month fixed deposit. Deposits were pledged as at cost, except for fee income, which is charged at market collateral. As of 31 December 2007 and 2006 the pledged price. deposits were Baht 32 million and Baht 52 million, respectively. The Bank has provided an allowance for doubtful accounts As at 31 December 2007 and 2006, the Bank has for related business entities using the same method as for provided an allowance for doubtful accounts for Phethai general customers and in accordance with the BoT’s regulations. Asset Management Company Limited, classified as normal loans, amounting to Baht 38 million and Baht 66 million, respectively.

ANNUAL REPORT 2007 159 4. Additional transactions occurring between the Bank and related business entities, which are charged at market price as with other normal business or the price as stipulated in the agreement, are as follows: 4.1 Assets, liabilities and contingencies between the Bank, its subsidiary and associated companies as of 31 December 2007 and 2006 are summarized as follows:

( Million Baht ) Consolidated The Bank 2007 2006 2007 2006 Loans Subsidiary Companies - Kasikorn Leasing Co., Ltd. - - 21,836 10,843 - Kasikorn Factoring Co., Ltd. - - 3,825 3,965 Interbank and Money Market Items (Assets) Subsidiary Company - Kasikorn Securities Public Co., Ltd. - - - 75 Other Assets Subsidiary Companies - Kasikorn Asset Management Co., Ltd. - - 33 23 - Kasikorn Leasing Co., Ltd. - - 15 14 Deposits Subsidiary Companies - Progress Gunpai Co., Ltd. 164 116 164 116 - Kasikorn Factoring Co., Ltd. - - 162 254 - Kasikorn Leasing Co., Ltd. - - 156 269 - Kasikorn Asset Management Co., Ltd. - - 84 23 - Progress Software Co., Ltd. 62 82 62 82 - Progress Plus Co., Ltd. 42 26 42 26 - Kasikorn Research Center Co., Ltd. - - 30 21 - Progress Services Co., Ltd. 26 26 26 26 - Progress Facilities Management Co., Ltd. 23 21 23 21 - Progress Management Co., Ltd. 23 15 23 15 - Progress Appraisal Co., Ltd. 21 24 21 24 - Progress H R Co., Ltd. 19 9 19 9 - Progress Land and Buildings Co., Ltd. - - 19 449 - Progress Storage Co., Ltd. 15 13 15 13 - K-SME Venture Capital Co., Ltd - - 100 - Associated Companies - Processing Center Co., Ltd. 17 8 17 8

160 ANNUAL REPORT 2007 ( Million Baht ) Consolidated The Bank 2007 2006 2007 2006 Interbank and Money Market Items (Liabilities) Subsidiary Company - Kasikorn Securities Public Co., Ltd. - - 324 397 Borrowings Subsidiary Company - Kasikorn Asset Management Co., Ltd. - - 306 314 Other Liabilities Subsidiary Companies - Progress Software Co., Ltd. 73 60 73 60 - Progress Plus Co., Ltd. 47 39 47 39 - Progress Service Support Co., Ltd. 23 - 23 - - Progress Appraisal Co., Ltd. 14 8 14 8 - Progress HR Co., Ltd. - 13 - 13 Associated Companies - Processing Center Co., Ltd. 11 5 11 5 Contingencies Subsidiary Company - Kasikorn Securities Public Co., Ltd. - - 11 4 - Kasikorn Factoring Co., Ltd. - - 10 45

Certain subsidiaries and associated companies have entered into 2-year building lease agreements with the Bank. Rentals are charged at cost. As of 31 December 2007 and 2006, the Bank and its related parties have rental agreements with remaining tenures amounting to Baht 4 million and Baht 7 million, respectively.

ANNUAL REPORT 2007 161 4.2 Revenue and expenses occurring between the Bank, its subsidiary and associated companies for the years ended 31 December 2007 and 2006 are summarized as follows: ( Million Baht ) Consolidated The Bank 2007 2006 2007 2006 Subsidiary Companies Revenue: Interest income - - 994 580 Dividend income - - 830 268 Fee income - - 298 268 Other income - 13 67 42 Expenses: Interest expenses - - 40 29 Personnel expenses - - 174 109 Other expenses 1,802 1,166 1,916 1,227 Associated Companies Expenses: Other expenses 58 48 58 48

The Bank has entered into a staff secondment agreement with Kasikorn Securities Public Company Limited, commencing from January 2006. The agreement shall be terminated at any time by the Bank giving notice 60 days prior to the termination date. The Bank is responsible for salaries, welfare and other benefits and any liabilities that arise or may arise from the actions of the employees. For the year ended 31 December 2007 and 2006, the Bank incurred expenses amounting to Baht 174 million and Baht 109 million, respectively, presented as personnel expenses in the statements of income.

162 ANNUAL REPORT 2007 4.3 Assets, liabilities and contingencies between the Bank and other business entities in which the directors, key executive officers and close members of their families have significant influence as of 31 December 2007 and 2006 were summarized as follows:

( Million Baht ) Consolidated and The Bank 2007 2006 Loans - Dole Thailand Co., Ltd. 393 69 - Charoen Pokphand Foods Public Co., Ltd. 357 655 - Bangkok Glass Industry Co., Ltd. 164 344 - Loxley Public Co., Ltd. 162 47 - Jutha Maritime Public Co., Ltd. 66 10 - Yip In Tsoi & Jacks Ltd. 49 7 - Thanakorn Vegetable Oil Products Co., Ltd. 31 240 - Quality Houses Public Co., Ltd. - 439 - Siam Container Pipe Co., Ltd. - * 227 - Siam Food Products Public Co., Ltd. - * 130 - Manager Media Group Public Co., Ltd. - * 35 Deposits - Thai Airways International Public Co., Ltd. 3,964 342 - Muang Thai Life Assurance Co., Ltd. 408 349 - Com - Link Co., Ltd. 188 95 - Serm Suk Public Co., Ltd. 162 430 - Phatra Insurance Public Co., Ltd. 159 256 - Aspac Oil (Thailand) Co., Ltd. 126 58 - Mitsubishi Elevator Asia Co., Ltd. 83 79 - Smithithada Co., Ltd. 77 52 - Loxley Public Co., Ltd. 74 104 - Thai British Security Printing Public Co., Ltd. 67 121 - Nithi Thamrong Co., Ltd. 50 24 - Loxley Trading Co., Ltd. 42 14 - Sup Wattana Co., Ltd. 37 38 - Bangkok Glass Industry Co., Ltd. 33 37 - Floor Install Co., Ltd. 23 1

* As of 31 December 2007, these companies were not related parties to the Bank.

ANNUAL REPORT 2007 163 ( Million Baht ) Consolidated and The Bank 2007 2006 Deposits - The Deves Insurance Public Co,. Ltd. 18 6 - Charoen Pokphand Foods Public Co., Ltd. 18 5 - Suludee Co., Ltd. 16 1 - Sermsuk Beverage Co., Ltd. 14 46 - SCB Securities Co., Ltd. 14 44 - Avant Development Co., Ltd. 14 10 - National ITMX Co., Ltd. 14 5 - SCG Network Management Co., Ltd. ** 12 - - CS Loxinfo Public Co., Ltd. 11 27 - Chanaporn Co., Ltd. 11 10 - SCT Co., Ltd. 10 1 - Trinity Securities Co., Ltd. 8 12 - The Lamsam Estate Co., Ltd. - 30 - Globex Securities Co., Ltd. - * 14 - Phatra Real Estate Public Co., Ltd. - * 11 - Manager Media Group Public Co., Ltd. - * 11 Contingencies - Charoen Pokphand Foods Public Co., Ltd. 956 717 - Quality Houses Public Co., Ltd. 274 267 - Loxley Public Co., Ltd. 150 388 - Dole Thailand Co., Ltd. 140 76 - SCT Co., Ltd. 128 26 - Thai Airways International Public Co., Ltd. 116 1,110 - Yip In Tsoi & Jacks Ltd. 47 84 - Thai British Security Printing Public Co., Ltd. 41 22 - Samart Telcom Public Co., Ltd. 30 30 - Loxley Trading Co., Ltd. 28 43 - Serm Suk Public Co., Ltd. 20 38 - Thanakorn Vegetable Oil Products Co., Ltd. 19 17 - Com - Link Co., Ltd. 13 71 - Internet Thailand Co., Ltd. 12 - ** - Siam Food Products Public Co., Ltd. - * 713 - Bangkok Glass Industry Co., Ltd. - 132

* As of 31 December 2007 these companies were not related parties to the Bank. ** Name has been changed from Cementhai Sales and Marketing Co., Ltd. since 1 June 2007.

164 ANNUAL REPORT 2007 4.4 Assets, liabilities and contingencies between the Bank and its directors and key executive officers or the Bank’s employees who have authority and responsibility for planning, directing and controlling the activities of the Bank are summarized as follows:

( Million Baht ) Consolidated and The Bank 2007 2006 Loans 32 35 Deposits 1,345 1,338

30 BENEFITS OF DIRECTORS AND EXECUTIVES The Bank and its subsidiary companies have not paid other benefits to directors and executives except for the benefits that are normally paid such as directors’ fee, directors’ bonus (if any) and income tax, executives’ salary and bonus (if any).

31 COMMITMENTS Capital Commitments

( Million Baht ) Consolidated 2007 2006 Contracted but not provided for 4,194 3,507 Authorized but not contracted for 89 26 Total 4,283 3,533

( Million Baht ) The Bank 2007 2006 Contracted but not provided for 4,186 3,498 Authorized but not contracted for 89 26 Total 4,275 3,524

ANNUAL REPORT 2007 165 Long-Term Lease Agreements 1. Lease Agreements The Bank and its subsidiary companies have entered into land/building lease agreements for branch offices and vehicle lease agreements. As of 31 December 2007 and 2006 the Bank and its subsidiary companies were committed to pay future rentals, which are summarized as follows:

( Million Baht ) Type of Lease Agreement Consolidated The Bank Remaining Period 2007 2007 Land/building lease agreements 1 January 2008 - 4 August 2031 698 658 Vehicle lease agreements 1 January 2008 - 2 December 2012 569 533 Others 1 January 2008 - 29 February 2012 16 - Total 1,283 1,191

( Million Baht ) Type of Lease Agreement Consolidated The Bank Remaining Period 2007 2007 Land/building lease agreements 1 January 2007 – 17 October 2027 564 549 Vehicle lease agreements 1 January 2007 – 30 November 2011 429 403 Others 1 January 2007 – 19 January 2011 20 - Total 1,013 952

2. Service Agreement On 12 November 2002 the Bank entered into an Information Technology Service Agreement with IBM Thailand Co., Ltd., under which service will be provided until 31 December 2012 and for which as of 31 December 2007 and 2006, the Bank is committed to pay a total service fee of Baht 2,622 million and Baht 3,919 million respectively.

32 EVENTS AFTER BALANCE SHEET DATE On 10 January 2008, the Bank registered a change in its paid-up share capital as a result of the increase in paid-up capital of 5,057,876 shares at Baht 10 par value, totaling Baht 50,578,760 from the exercise of warrants for ordinary shares, which were issued and offered for sale to Bank employees, except for directors. Therefore, as of 10 January 2008, the Bank had total paid-up share capital of Baht 23,932,601,930.

33 THE FINANCIAL POSITIONS AND RESULTS OF OPERATIONS DIFFERENTIATED BY DOMESTIC AND FOREIGN BUSINESS The financial positions and results of operations differentiated by domestic and foreign business can be summarized as follows:

166 ANNUAL REPORT 2007 1. Financial Position Classified by Types of Business

( Million Baht ) Consolidated 31 December 2007 Domestic Foreign Eliminated Business Business Total Transactions Total Total assets 985,316 31,540 1,016,856 (22,338) 994,518 Interbank and money market items - net (assets) 48,640 10,084 58,724 - 58,724 Investments - net 74,607 20,919 95,526 - 95,526 Loans 762,044 461 762,505 - 762,505 Deposits 783,811 11 783,822 - 783,822 Interbank and money market items (liabilities) 14,185 - 14,185 - 14,185 Borrowings 51,376 6,724 58,100 - 58,100 Contingencies 1,742,477 15,026 1,757,503 (27,014) 1,730,489

( Million Baht ) Consolidated 31 December 2006 Domestic Foreign Eliminated Business Business Total Transactions Total Total assets 925,340 28,097 953,437 (17,928) 935,509 Interbank and money market items - net (assets) 76,929 5,913 82,842 - 82,842 Investments - net 80,421 21,566 101,987 - 101,987 Loans 676,749 458 677,207 - 677,207 Deposits 746,256 4 746,260 - 746,260 Interbank and money market items (liabilities) 17,223 466 17,689 - 17,689 Borrowings 43,290 7,174 50,464 - 50,464 Contingencies 1,163,344 16,040 1,179,384 (29,088) 1,150,296

( Million Baht ) The Bank 31 December 2007 Domestic Foreign Eliminated Business Business Total Transactions Total Total assets 984,947 31,540 1,016,487 (22,338) 994,149 Interbank and money market items - net (assets) 48,597 10,084 58,681 - 58,681 Investments - net 82,881 20,919 103,800 - 103,800 Loans 760,844 461 761,305 - 761,305 Deposits 784,397 11 784,408 - 784,408 Interbank and money market items (liabilities) 14,321 - 14,321 - 14,321 Borrowings 50,979 6,724 57,703 - 57,703 Contingencies 1,742,146 15,026 1,757,172 (27,014) 1,730,158

ANNUAL REPORT 2007 167 ( Million Baht ) The Bank (Restated) 31 December 2006 Domestic Foreign Eliminated Business Business Total Transactions Total Total assets 926,701 28,097 954,798 (17,928) 936,870 Interbank and money market items - net (assets) 76,966 5,913 82,879 - 82,879 Investments - net 88,496 21,566 110,062 - 110,062 Loans 672,878 458 673,336 - 673,336 Deposits 747,324 4 747,328 - 747,328 Interbank and money market items (liabilities) 17,620 466 18,086 - 18,086 Borrowings 43,479 7,174 50,653 - 50,653 Contingencies 1,163,149 16,040 1,179,189 (29,088) 1,150,101

2. Results of Operations Classified by Types of Business

( Million Baht ) Consolidated For the Year Ended 31 December 2007 Domestic Foreign Eliminated Business Business Total Transactions Total Interest and dividend income 54,966 1,727 56,693 (1,177) 55,516 Interest expense 17,500 1,762 19,262 (1,177) 18,085 Net income (expense) from interest and dividend 37,466 (35) 37,431 - 37,431 Non-interest income 18,791 106 18,897 - 18,897 Non-interest expense 34,788 128 34,916 - 34,916 Income (loss) before income tax 21,469 (57) 21,412 - 21,412

( Million Baht ) Consolidated For the Year Ended 31 December 2006 Domestic Foreign Eliminated Business Business Total Transactions Total Interest and dividend income 51,184 1,392 52,576 (766) 51,810 Interest expense 16,531 1,432 17,963 (766) 17,197 Net income (expense) from interest and dividend 34,653 (40) 34,613 - 34,613 Non-interest income 14,152 3 14,155 - 14,155 Non-interest expense 30,833 147 30,980 - 30,980 Income (loss) before income tax 17,972 (184) 17,788 - 17,788

168 ANNUAL REPORT 2007 ( Million Baht ) The Bank For the Year Ended 31 December 2007 Domestic Foreign Eliminated Business Business Total Transactions Total Interest and dividend income 55,293 1,727 57,020 (1,177) 55,843 Interest expense 17,537 1,762 19,299 (1,177) 18,122 Net income (expense) from interest and dividend 37,756 (35) 37,721 - 37,721 Non-interest income 16,626 106 16,732 - 16,732 Non-interest expense 33,067 128 33,195 - 33,195 Income (loss) before income tax 21,315 (57) 21,258 - 21,258

( Million Baht ) The Bank For the Year Ended 31 December 2006 Domestic Foreign Eliminated Business Business Total Transactions Total Interest and dividend income 51,263 1,392 52,655 (766) 51,889 Interest expense 16,557 1,432 17,989 (766) 17,223 Net income (expense) from interest and dividend 34,706 (40) 34,666 - 34,666 Non-interest income 12,723 3 12,726 - 12,726 Non-interest expense 29,522 147 29,669 - 29,669 Income before income tax 17,907 (184) 17,723 - 17,723

34 FINANCIAL INSTRUMENTS A financial instrument is any contract that gives rise to credit risk as a whole. both a financial asset of one enterprise and a financial liability In the credit approval process, the Bank considers the or equity instrument of another enterprise. customer’s ability to repay and the loan objectives as key factors in the approval of credit and may obtain sufficient Credit risk collateral or other securities, where appropriate, as a means Credit risk refers to the risk that a counterparty or a of mitigating the risk of financial losses from default. To borrower may default on its contractual obligations and maximize the effectiveness of the credit approval process, agreements. Such default may be caused by the counterparty’s credit analysis and approval functions are separated from inability to pay due to financial encumbrances or their intention the units responsible for maintaining customer relationships. not to abide by the contractual agreements, resulting in a The Bank also has processes for regularly reviewing customers’ loss to the Bank. credit rating and performance on all approved transactions. The Bank has implemented credit risk management For non-performing loans (NPL), the Bank has closely and processes to measure and control credit risk. Through the continuously monitored, resolved and/or restructured them use of credit risk rating tools for assessing customers’ credit to retain maximum benefits for the organization. risk rating, the Bank is capable of granting better quality loans. For the “loans” item shown in the balance sheet, the In addition, for retail customers, the Bank used credit scoring Bank’s maximum credit loss is the carrying amount of net as a tool to determine an appropriate return given the risk level loans after deduction of applicable allowance for losses without of each loan. In addition, the Bank allocates credit concentration considering the value of collateral. In addition, credit risk to various business sectors and industries, so as to diversify may arise from off-balance sheet items or contingencies.

ANNUAL REPORT 2007 169 Market risk Market risk is any risk due to changes in interest rates, arises from the structure and characteristics of the foreign exchange rates or securities prices that will have an Bank’s assets, liabilities and equities. Most of the Bank’s effect on the Bank’s funding costs, investment position or credit is based on the Bank’s floating interest rates foreign currency position, resulting in possible loss to the (MLR, MOR and MRR). Deposit interest rates are in line Bank. Market risk for the Bank can be categorized as interest with the announcements made by the Bank. As a result, rate risk, foreign exchange risk and equity position risk. the interest rate risk faced by the Bank is generally low. 1. Interest rate risk However, the Bank actively manages such risk by adjusting Interest rate risk refers to any risk that arises from its asset and liability structure in order to maximize returns changes in interest rates which may affect the value of under the acceptable risk levels in order to best fit current the Bank’s financial instruments or may cause volatility market conditions and trends. Management of interest in the Bank’s earnings or fluctuations in the value of the rate risk is under the supervision of the Bank’s Asset Bank’s financial assets and liabilities, both in the current and Liability Management Sub-Committee. reporting period and in future years. Interest rate risk also

An analysis of loans (including financial institutions) at fixed and floating interest rates (MLR, MOR and MRR) as of 31 December 2007 and 2006 is as follows:

( Million Baht ) Consolidated The Bank 2007 2006 2007 2006 Fixed interest rate 157,614 170,065 161,426 170,282 Floating interest rate 629,144 509,008 624,131 504,920 Total Loans (including financial institutions) 786,758 679,073 785,557 675,202

170 ANNUAL REPORT 2007 The average balances of the interest-bearing financial assets and liabilities of the Bank and its subsidiaries, calculated by using the average of the beginning and the ending balances, and the average interest and dividend rates for the year ended 31 December 2007 and 2006 are as follows: ( Million Baht ) Consolidated 2007 2006 Interest and Interest and Dividend Dividend Average Income/ Average Average Income/ Average Balance Expense Rate (%) Balance Expense Rate (%) Interest-bearing Financial Assets Interbank and money market items 75,107 3,502 4.66 76,278 4,102 5.38 Securities purchased under resale agreements 16,450 338 2.06 15,850 386 2.44 Investments 101,973 4,650 4.56 103,610 4,446 4.29 Loans 719,856 47,026 6.53 652,076 42,876 6.58 Total 913,386 55,516 6.08 847,814 51,810 6.11 Interest-bearing Liabilities Deposits 767,363 15,946 2.08 717,020 14,709 2.05 Interbank and money market items 15,937 203 1.27 18,599 491 2.64 Securities sold under repurchase agreements 2,833 5 0.18 12,955 22 0.17 Borrowings 51,947 1,931 3.72 39,096 1,975 5.05 Total 838,080 18,085 2.16 787,670 17,197 2.18

( Million Baht ) The Bank 2006 2007 (Restated) Interest and Interest and Dividend Dividend Average Income/ Average Average Income/ Average Balance Expense Rate (%) Balance Expense Rate (%) Interest-bearing Financial Assets Interbank and money market items 70,630 3,501 4.96 74,406 4,097 5.51 Securities purchased under resale agreements 16,450 338 2.06 15,850 386 2.44 Investments 111,159 5,510 4.96 114,068 4,714 4.13 Loans 717,320 46,495 6.48 647,029 42,692 6.60 Total 915,559 55,844 6.10 851,353 51,889 6.09 Interest-bearing Liabilities Deposits 768,190 15,957 2.08 718,119 14,713 2.05 Interbank and money market items 16,203 214 1.32 18,654 510 2.73 Securities sold under repurchase agreements 2,833 5 0.18 12,955 22 0.17 Borrowings 51,843 1,946 3.75 39,190 1,978 5.05 Total 839,069 18,122 2.16 788,918 17,223 2.18

ANNUAL REPORT 2007 171 Financial assets and liabilities, classified by maturity of interest repricing, as of 31 December 2007 and 2006 are shown below:

( Million Baht ) Consolidated 2007 Immediate Less than 6 months 1 Year Over Non-interest Stop Repricing 6 months to 1 Year to 5 Years 5 Years Bearing Accrued Total Financial Assets Cash - - - - - 18,051 - 18,051 Interbank and money market Items 4,952 50,398 62 - - 2,996 - 58,408 Securities purchased under resale agreements - 10,700 - - - - - 10,700 Investments 18,432 1,633 16,737 31,112 17,763 12,176 1,469 99,322 Loans 552,810 85,304 1,087 34,624 27,711 8,945 52,024 762,505 Accrued interest receivable - - - - - 1,263 - 1,263 Customers’ liability under acceptances - - - - - 1,462 - 1,462 Other assets - - - - - 5,293 - 5,293 Total Financial Assets 576,194 148,035 17,886 65,736 45,474 50,186 53,493 957,004 Financial Liabilities Deposits 392,692 313,778 33,832 1,839 - 41,681 - 783,822 Interbank and money market Items 1,677 8,763 600 343 - 2,802 - 14,185 Liabilities payable on demand - - - - - 11,117 - 11,117 Borrowings - 38,198 877 301 18,724 - - 58,100 Bank’s liability under acceptances - - - - - 1,462 - 1,462 Other liabilities - - - - - 6,107 - 6,107 Total Financial Liabilities 394,369 360,739 35,309 2,483 18,724 63,169 - 874,793 On-balance sheet items 181,825 (212,704) (17,423) 63,253 26,750 (12,983) 53,493 82,211

172 ANNUAL REPORT 2007 ( Million Baht ) Consolidated 2006 Immediate Less than 6 months 1 Year Over Non-interest Stop Repricing 6 months to 1 Year to 5 Years 5 Years Bearing Accrued Total Financial Assets Cash - - - - - 18,411 - 18,411 Interbank and money market Items 3,003 74,267 3,219 - - 2,368 - 82,857 Securities purchased under resale agreements - 22,200 - - - - - 22,200 Investments 10,538 17,160 3,686 30,895 23,727 16,577 2,041 104,624 Loans 490,824 89,540 11,558 19,909 4,706 1,365 59,304 677,206 Accrued interest receivable - - - - - 1,813 - 1,813 Customers’ liability under acceptances - - - - - 525 - 525 Other assets - - - - - 6,535 - 6,535 Total Financial Assets 504,365 203,167 18,463 50,804 28,433 47,594 61,345 914,171 Financial Liabilities Deposits 345,864 181,094 172,834 5,452 - 41,016 - 746,260 Interbank and money market Items 2,246 11,271 1,067 800 - 2,305 - 17,689 Liabilities payable on demand - - - - - 6,757 - 6,757 Borrowings - 27,615 1,811 1,864 19,174 - - 50,464 Bank’s liability under acceptances - - - - - 525 - 525 Other liabilities - - - - - 9,389 - 9,389 Total Financial Liabilities 348,110 219,980 175,712 8,116 19,174 59,992 - 831,084 On-balance sheet items 156,255 (16,813) (157,249) 42,688 9,259 (12,398) 61,345 83,087

ANNUAL REPORT 2007 173 ( Million Baht ) The Bank 2007 Immediate Less than 6 months 1 Year Over Non-interest Stop Repricing 6 months to 1 Year to 5 Years 5 Years Bearing Accrued Total Financial Assets Cash - - - - - 18,050 - 18,050 Interbank and money market items 5,142 50,154 - - - 3,069 - 58,365 Securities purchased under resale agreements - 10,700 - - - - - 10,700 Investments 18,432 1,453 16,737 31,112 17,763 20,867 1,193 107,557 Loans 551,419 89,514 1,359 34,112 27,599 8,945 48,357 761,305 Accrued interest receivable - - - - - 1,246 - 1,246 Customers’ liability under acceptances - - - - - 1,462 - 1,462 Other assets - - - - - 3,705 - 3,705 Total Financial Assets 574,993 151,821 18,096 65,224 45,362 57,344 49,550 962,390 Financial Liabilities Deposits 393,032 313,778 33,832 1,839 - 41,927 - 784,408 Interbank and money market items 1,810 8,763 600 343 - 2,805 - 14,321 Liabilities payable on demand - - - - - 11,117 - 11,117 Borrowings - 37,801 877 301 18,724 - - 57,703 Bank’s liability under acceptances - - - - - 1,462 - 1,462 Other liabilities - - - - - 8,766 - 8,766 Total Financial Liabilities 394,842 360,342 35,309 2,483 18,724 66,077 - 877,777 On-balance sheet items 180,151 (208,521) (17,213) 62,741 26,638 (8,733) 49,550 84,613

174 ANNUAL REPORT 2007 ( Million Baht ) The Bank 2006 (Restated) Immediate Less than 6 months 1 Year Over Non-interest Stop Repricing 6 months to 1 Year to 5 Years 5 Years Bearing Accrued Total Financial Assets Cash - - - - - 18,410 - 18,410 Interbank and money market items 3,363 73,854 3,219 - - 2,458 - 82,894 Securities purchased under resale agreements - 22,200 - - - - - 22,200 Investments 10,538 16,996 3,555 30,715 23,727 25,561 1,235 112,327 Loans 490,324 96,711 11,596 19,052 4,651 1,365 49,637 673,336 Accrued interest receivable - - - - - 1,629 - 1,629 Customers’ liability under acceptances - - - - - 525 - 525 Other assets - - - - - 5,669 - 5,669 Total Financial Assets 504,225 209,761 18,370 49,767 28,378 55,617 50,872 916,990 Financial Liabilities Deposits 346,175 181,094 173,254 5,452 - 41,353 - 747,328 Interbank and money market items 2,280 11,630 1,068 800 - 2,308 - 18,086 Liabilities payable on demand - - - - - 6,757 - 6,757 Borrowings - 27,803 1,811 1,865 19,174 - - 50,653 Bank’s liability under acceptances - - - - - 525 - 525 Other liabilities - - - - - 9,195 - 9,195 Total Financial Liabilities 348,455 220,527 176,133 8,117 19,174 60,138 - 832,544 On-balance sheet items 155,770 (10,766) (157,763) 41,650 9,204 (4,521) 50,872 84,446

ANNUAL REPORT 2007 175 2. Foreign exchange risk The Bank engages in foreign exchange related Foreign exchange risk is the risk that occurs from transactions, which may create foreign exchange risk. changes in exchange rates which may affect the value However, the Bank believes that such risk is low, as most of the Bank’s financial instruments or may cause volatility foreign currency transactions are protected by customers’ in the Bank’s earnings or fluctuations in the value of the underlying transactions. The Bank’s policy is to minimize Bank’s assets and liabilities. foreign exchange risk by closing its foreign exchange position on a daily basis. Management of foreign exchange risk is under the supervision of the Asset and Liability Management Sub-Committee. Foreign currency positions in Baht equivalent, as of 31 December 2007 and 2006 were as follows: ( Million Baht ) Consolidated 2007 Currency US Dollars Yen Pounds Euro Others Total Assets Cash 607 44 99 402 232 1,384 Interbank and money market items - net 31,688 5 89 236 889 32,907 Investments - net 20,896 - - 2 23 20,921 Loans and accrued interest receivables - net 23,047 1,140 86 1,395 255 25,923 Other assets 190 2 2 25 10 229 Total assets 76,428 1,191 276 2,060 1,409 81,364 Liabilities Deposits 8,196 101 73 572 186 9,128 Interbank and money market items 236 27 - 2 2 267 Liability on demand 4,869 83 70 296 449 5,767 Borrowings 6,724 - - - - 6,724 Other liabilities 367 11 20 26 97 521 Total liabilities 20,392 222 163 896 734 22,407 Foreign currency position of on-balance items - net 56,036 969 113 1,164 675 58,957 Off-balance sheet items - net (60,339) (963) (111) (1,191) 248 (62,356) (Forward exchange contracts, cross currency swaps and FX options)

176 ANNUAL REPORT 2007 ( Million Baht ) Consolidated 2006 Currency US Dollars Yen Pounds Euro Others Total Assets Cash 577 29 88 345 188 1,227 Interbank and money market items - net 79,199 65 89 227 157 79,737 Investments - net 36,695 - - 3 52 36,750 Loans and accrued interest receivables - net 17,388 840 59 1,195 250 19,732 Other assets 1,825 - 1 - 2 1,828 Total assets 135,684 934 237 1,770 649 139,274 Liabilities Deposits 5,437 111 36 308 135 6,027 Interbank and money market items 485 - - - 15 500 Liability on demand 3,131 26 129 266 157 3,709 Borrowings 7,174 - - - - 7,174 Other liabilities 4,630 - 18 4 54 4,706 Total liabilities 20,857 137 183 578 361 22,116 Foreign currency position of on-balance items - net 114,827 797 54 1,192 288 117,158 Off-balance sheet items - net (116,363) (776) (48) (1,131) (195) (118,513) (Forward exchange contracts, cross currency swaps and FX options)

ANNUAL REPORT 2007 177 ( Million Baht ) The Bank 2007 Currency US Dollars Yen Pounds Euro Others Total Assets Cash 607 44 99 402 232 1,384 Interbank and money market items - net 31,688 5 89 236 889 32,907 Investments - net 20,896 - - 2 23 20,921 Loans and accrued interest receivables - net 23,047 1,140 86 1,395 255 25,923 Other assets 190 2 2 25 10 229 Total assets 76,428 1,191 276 2,060 1,409 81,364 Liabilities Deposits 8,196 101 73 572 186 9,128 Interbank and money market items 236 27 - 2 2 267 Liability on demand 4,869 83 70 296 449 5,767 Borrowings 6,724 - - - - 6,724 Other liabilities 366 11 14 26 97 514 Total liabilities 20,391 222 157 896 734 22,400 Foreign currency position of on-balance items - net 56,037 969 119 1,164 675 58,964 Off-balance sheet items - net (60,339) (963) (111) (1,191) 248 (62,356) (Forward exchange contracts, cross currency swaps and FX options)

178 ANNUAL REPORT 2007 ( Million Baht ) The Bank 2006 (Restated) Currency US Dollars Yen Pounds Euro Others Total Assets Cash 577 29 88 345 188 1,227 Interbank and money market items - net 79,199 65 89 227 157 79,737 Investments - net 36,695 - - 3 52 36,750 Loans and accrued interest receivables - net 17,388 840 59 1,195 250 19,732 Other assets 1,825 - 1 - 2 1,828 Total assets 135,684 934 237 1,770 649 139,274 Liabilities Deposits 5,437 111 36 308 135 6,027 Interbank and money market items 485 - - - 15 500 Liability on demand 3,131 26 129 266 157 3,709 Borrowings 7,174 - - - - 7,174 Other liabilities 4,629 - 16 4 54 4,703 Total liabilities 20,856 137 181 578 361 22,113 Foreign currency position of on-balance items - net 114,828 797 56 1,192 288 117,161 Off-balance sheet items - net (116,363) (776) (48) (1,131) (195) (118,513) (Forward exchange contracts cross currency swaps and FX options)

3. Equity position risk Liquidity risk Equity position risk is any risk that arises from changes Liquidity risk is the risk that the Bank may not be able in the price of equities or common stock that may cause to meet its obligations as they fall due, because of inability volatility in the Bank’s earnings or fluctuations in the value to realise its assets or to cover funding requirements at an of the Bank’s financial assets. appropriate price which results in a loss to the Bank. The Bank’s policy is not to increase its equity investments, The Bank manages its liquidity position under the Bank of but to divest any equity position that is not directly related Thailand’s liquidity reserve regulations and other applicable to its main banking business. The Bank manages and monitors regulations. The Treasury Department is accountable market situations closely in order to acquire supportive for managing the Bank’s liquidity position by providing information for proper management and retain maximum short-term and long-term funding sources as well as benefits for the Bank. investing in highly liquid assets in both domestic and foreign currencies. The Bank also ensures that its liquidity position is suitable and sufficient for the current and foreseeable market conditions. The Asset and Liabilities Management Sub-Committee supervise management of liquidity risk.

ANNUAL REPORT 2007 179 A maturity analysis of financial assets and liabilities as of 31 December 2007 and 2006 was as follows:

( Million Baht ) Consolidated 2007 Less than 6 months 1 Year Over No At call 6 months to 1 Year to 5 Years 5 Years Maturity Total Financial Assets Cash - - - - - 18,051 18,051 Interbank and money market items 8,214 50,194 - - - - 58,408 Securities purchased under resale agreements - 10,700 - - - - 10,700 Investments 172 14,359 21,985 37,817 18,463 6,526 99,322 Loans 173,842 269,735 8,299 157,722 152,907 - 762,505 Accrued interest receivables 12 1,220 - 13 18 - 1,263 Customers’ liability under acceptance - 1,462 - - - - 1,462 Other assets - 1,086 - - - 4,207 5,293 Total Financial Assets 182,240 348,756 30,284 195,552 171,388 28,784 957,004 Financial Liabilities Deposits 434,373 313,778 33,812 1,859 - - 783,822 Interbank and money market items 4,615 8,127 - 1,143 300 - 14,185 Liability payable on demand 11,117 - - - - - 11,117 Borrowings - 38,198 877 301 18,724 - 58,100 Bank’s liability under acceptances - 1,462 - - - - 1,462 Other liabilities 121 2,481 234 80 - 9,023 11,939 Total Financial Liabilities 450,226 364,046 34,923 3,383 19,024 9,023 880,625 Liquidity-net (267,986) (15,290) (4,639) 192,169 152,364 19,761 76,379

180 ANNUAL REPORT 2007 ( Million Baht ) Consolidated 2006 Less than 6 months 1 Year Over No At call 6 months to 1 Year to 5 Years 5 Years Maturity Total Financial Assets Cash - - - - - 18,411 18,411 Interbank and money market items 5,594 75,099 2,164 - - - 82,857 Securities purchased under resale agreements - 22,200 - - - - 22,200 Investments 446 18,243 8,812 41,800 30,582 4,741 104,624 Loans 157,919 262,247 7,867 120,895 128,278 - 677,206 Accrued interest receivables 40 1,525 - 100 148 - 1,813 Customers’ liability under acceptance - 525 - - - - 525 Other assets - 2,188 - - - 4,347 6,535 Total Financial Assets 163,999 382,027 18,843 162,795 159,008 27,499 914,171 Financial Liabilities Deposits 386,880 177,733 174,645 7,002 - - 746,260 Interbank and money market items 4,588 10,734 1,067 1,100 200 - 17,689 Liability payable on demand 6,757 - - - - - 6,757 Borrowings - 27,614 1,811 1,865 19,174 - 50,464 Bank’s liability under acceptances - 525 - - - - 525 Other liabilities 109 2,944 520 78 - 5,738 9,389 Total Financial Liabilities 398,334 219,550 178,043 10,045 19,374 5,738 831,084 Liquidity-net (234,335) 162,477 (159,200) 152,750 139,634 21,761 83,087

ANNUAL REPORT 2007 181 ( Million Baht ) The Bank 2007 Less than 6 months 1 Year Over No At call 6 months to 1 Year to 5 Years 5 Years Maturity Total Financial Assets Cash - - - - - 18,050 18,050 Interbank and money market items 8,172 50,193 - - - - 58,365 Securities purchased under resale agreements - 10,700 - - - - 10,700 Investments 131 14,179 21,985 37,592 18,453 15,217 107,557 Loans 171,148 273,337 8,532 156,611 151,677 - 761,305 Accrued interest receivables - 1,246 - - - 1,246 Customers’ liability under acceptances - 1,462 - - - - 1,462 Other assets - - - - - 3,705 3,705 Total Financial Assets 179,451 351,117 30,517 194,203 170,130 36,972 962,390 Financial Liabilities Deposits 434,959 313,778 33,812 1,859 - - 784,408 Interbank and money market items 4,615 8,263 - 1,143 300 - 14,321 Liability payable on demand 11,117 - - - - - 11,117 Borrowings - 37,801 877 301 18,724 - 57,703 Bank’s liability under acceptances - 1,462 - - - - 1,462 Other liabilities 121 2,483 234 80 - 8,766 11,684 Total Financial Liabilities 450,812 363,787 34,923 3,383 19,024 8,766 880,695 Liquidity-net (271,361) (12,670) (4,406) 190,820 151,106 28,206 81,695

182 ANNUAL REPORT 2007 ( Million Baht ) The Bank 2006 (Restated) Less than 6 months 1 Year Over No At call 6 months to 1 Year to 5 Years 5 Years Maturity Total Financial Assets Cash - - - - - 18,410 18,410 Interbank and money market items 5,631 75,099 2,164 - - - 82,894 Securities purchased under resale agreements - 22,200 - - - - 22,200 Investments 166 18,080 8,680 41,267 30,409 13,725 112,327 Loans 156,192 267,543 7,294 118,774 123,533 - 673,336 Accrued interest receivables - 1,561 - 68 - - 1,629 Customers’ liability under acceptances - 525 - - - - 525 Other assets - 2,071 - - - 3,598 5,669 Total Financial Assets 161,989 387,079 18,138 160,109 153,942 35,733 916,990 Financial Liabilities Deposits 387,528 177,733 175,065 7,002 - - 747,328 Interbank and money market items 4,588 11,130 1,068 1,100 200 - 18,086 Liability payable on demand 6,757 - - - - - 6,757 Borrowings - 27,803 1,811 1,865 19,174 - 50,653 Bank’s liability under acceptances - 525 - - - - 525 Other liabilities 109 2,953 520 78 - 5,535 9,195 Total Financial Liabilities 398,982 220,144 178,464 10,045 19,374 5,535 832,544 Liquidity-net (236,993) 166,935 (160,326) 150,064 134,568 30,198 84,446

ANNUAL REPORT 2007 183 Fair value Fair value is the estimated value that the Bank and its subsidiaries could receive from the sale of financial assets, or the estimated cost of redeeming their financial liabilities. Fair values are based on market value, or estimated values derived from using general market principles of calculation. The following is a summary of carrying amounts and estimated fair values of financial assets and liabilities and off-balance sheet items as of 31 December 2007 and 2006. ( Million Baht ) Consolidated 2007 2006 Carrying Amount Fair value Carrying Amount Fair value Financial Assets Cash 18,051 18,051 18,411 18,411 Interbank and money market items - net 58,724 58,724 82,842 82,842 Securities purchased under resale agreements 10,700 10,700 22,200 22,200 Investments - net 103,800 92,362 101,986 101,887 Loans and accrued interest receivables - net 737,916 737,916 646,026 646,580 Customers’ liability under acceptances 1,462 1,462 525 525 Other assets 5,293 5,293 6,535 6,535 Total Financial Assets 935,946 924,508 878,525 878,980 Financial Liabilities Deposits 783,822 783,822 746,260 746,260 Interbank and money market items 14,185 14,185 17,689 17,689 Liabilities payable on demand 11,117 11,117 6,757 6,757 Borrowings 58,100 58,596 50,465 51,596 Bank’s liability under acceptances 1,462 1,462 525 525 Other liabilities 6,107 6,107 9,389 9,389 Total Financial Liabilities 874,793 875,289 831,085 832,216

184 ANNUAL REPORT 2007 ( Million Baht ) The Bank 2007 2006 Carrying Amount Fair value Carrying Amount Fair value Financial Assets Cash 18,050 18,050 18,410 18,410 Interbank and money market items - net 58,681 58,681 82,879 82,879 Securities purchased under resale agreements 10,700 10,700 22,200 22,200 Investments - net 103,801 100,179 110,062 109,963 Loans and accrued interest receivables - net 738,304 738,304 646,993 646,993 Customers’ liability under acceptances 1,462 1,462 525 525 Other assets 3,705 3,705 5,669 5,669 Total Financial Assets 934,703 931,081 886,738 886,639 Financial Liabilities Deposits 784,408 784,408 747,328 752,053 Interbank and money market items 14,321 14,321 18,086 18,086 Liabilities payable on demand 11,117 11,117 6,757 6,757 Borrowings 57,703 58,596 50,653 51,596 Bank’s liability under acceptances 1,462 1,462 525 525 Other liabilities 8,766 8,766 9,195 9,195 Total Financial Liabilities 877,777 878,670 832,544 838,212

The following methods and assumptions were used by The fair value of general investments is stated at cost, the Bank in estimating fair values of financial assets and net of allowance for their impairment. liabilities as disclosed herein: The fair values of loans and accrued interest The fair values of cash, interbank and money market receivables are based on the carrying values of loans and items (assets and liabilities), securities purchased under accrued interest receivables, net of allowance for doubtful resale agreements, customers’ liability under acceptances, accounts, since most loans are floating rate ones. accrued income, other assets, liabilities payable on The carrying values of deposits usually approximate fair demand, securities sold under repurchase agreements, values, except for negotiable certificates of deposit (NCD) bank’s liabilities under acceptances, accrued interest for which fair value is calculated by using the expected payables and other liabilities are stated at their carrying yield on borrowings. values at the reporting date. The fair values of borrowings are estimated by using The fair values of held-for-trading investments, market values. available-for-sale investments and held-to-maturity investments are stated according to the Bank’s policy mentioned in Note 3.4.

ANNUAL REPORT 2007 185 The following is a summary of the notional amounts and the fair value of the consolidated and the Bank’s derivative instruments as at 31 December 2007 and 2006:

( Million Baht ) Consolidated and The Bank 2007 Notional Amount Up to 1 year Over 1 year Total Fair Value Forward exchange contracts 598,714 3,344 602,058 495 Cross currency swaps 14,809 93,742 108,551 (22) Interest rate swaps 185,243 604,861 790,104 3,314 Credit default swaps - 100 100 495 Other derivatives 218 1,442 1,660 1

( Million Baht ) Consolidated and The Bank 2006 Notional Amount Up to 1 year Over 1 year Total Fair Value Forward exchange contracts 411,169 924 412,093 2,210 Cross currency swaps 12,361 82,888 95,249 1,074 Interest rate swaps 56,832 178,249 235,081 108 Credit default swaps - 721 721 1 Other derivatives 83 1,001 1,084 -

The fair value is ordinarily derived from quoted market price or from generally accepted pricing models, where no market price is available.

186 ANNUAL REPORT 2007 35 RECLASSIFICATION OF ACCOUNTS Certain accounts in the financial statements for the year ended 31 December 2006 have been reclassified to conform with the presentation in the financial statements for the year ended 31 December 2007.

36 THAI ACCOUNTING STANDARDS (TAS) NOT YET ADOPTED The Bank and its subsidiaries have not adopted the following TAS that have been issued as of the balance sheet date but are not yet effective. The following TAS will become effective for financial periods beginning on or after 1 January 2008. TAS 25 (revised 2007) Cash Flows Statements TAS 29 (revised 2007) Leases TAS 35 (revised 2007) Presentation of Financial Statements TAS 39 (revised 2007) Accounting Policies, Changes in Accounting Estimates and Errors TAS 41 (revised 2007) Interim Financial Reporting TAS 43 (revised 2007) Business Combinations TAS 51 Intangible Assets The adoption and initial application of these TAS is not expected to have any material impact on the consolidated and bank only financial statements.

37 APPROVAL OF FINANCIAL STATEMENTS The financial statements were approved for issue by the Audit Committee on 22 February 2008.

ANNUAL REPORT 2007 187 KASIKORNBANK PUBLIC COMPANY LIMITED AND SUBSIDIARIES FINANCIAL SUMMARY

( Million Baht ) Consolidated 2007 2006 2005 2004 2003 ASSETS Cash 18,051 18,411 14,913 13,536 18,699 Interbank and money market items Domestic items Interest bearing 23,956 1,375 4,926 1,218 419 Non-interest bearing 2,068 1,735 1,709 2,136 2,845 Foreign items Interest bearing 31,758 79,099 58,795 71,969 101,492 Non-interest bearing 942 633 499 927 166 Total Interbank and Money Market Items - net 58,724 82,842 65,929 76,250 104,922 Securities purchased under resale agreements 10,700 22,200 9,500 19,040 31,710 Investments Current investments - net 55,074 51,338 50,105 33,325 65,491 Long-term investments - net 39,863 50,166 49,009 76,770 69,240 Investments in subsidiaries and associated companies - net 589 482 450 462 520 Total Investments - net 95,526 101,986 99,564 110,557 135,251 Loans and accrued interest receivables Loans 762,505 677,207 626,946 592,589 547,918 Accrued interest receivables 1,263 1,813 1,745 2,455 2,971 Total Loans and Accrued Interest Receivables 763,768 679,020 628,691 595,044 550,889 Less Allowance for doubtful accounts (24,217) (31,703) (34,767) (41,468) (60,868) Less Revaluation allowance for debt restructuring (1,635) (1,290) (2,672) (4,878) (6,665) Total Loans and Accrued Interest Receivables - net 737,916 646,027 591,252 548,698 483,356 Properties foreclosed - net 15,365 16,496 17,463 17,397 14,517 Customers’ liability under acceptances 1,462 525 857 743 676 Premises and equipment - net 24,534 22,293 21,441 19,747 20,084 Intangible assets - net 6,819 5,318 4,900 3,524 2,586 Derivative revaluation 10,640 9,827 3,278 6,349 3,713 Other assets - net 14,781 9,584 8,211 9,133 5,771 Total Assets 994,518 935,509 837,308 824,974 821,285

188 ANNUAL REPORT 2007 ( Million Baht ) Consolidated 2007 2006 2005 2004 2003 LIABILITIES AND SHAREHOLDERS’ EQUITY Deposits Deposits in baht 774,692 740,206 686,612 701,713 682,386 Deposits in foreign currencies 9,130 6,054 3,725 3,857 2,560 Total Deposits 783,822 746,260 690,337 705,570 684,946 Interbank and money market items Domestic items Interest bearing 11,383 14,861 14,757 8,068 1,890 Non-interest bearing 2,612 1,611 2,494 3,182 4,222 Foreign items Interest bearing - 523 152 19 486 Non-interest bearing 190 694 290 256 503 Total Interbank and Money Market Items 14,185 17,689 17,693 11,525 7,101 Liability payable on demand 11,117 6,757 5,904 7,426 7,042 Borrowings Short-term borrowings 39,075 29,426 6,816 3,843 - Long-term borrowings 19,025 21,039 20,170 19,767 59,841 Total Borrowings 58,100 50,465 26,986 23,610 59,841 Bank’s liability under acceptances 1,462 525 857 743 676 Derivative revaluation 6,594 6,611 3,035 1,441 720 Other liabilities 19,243 18,963 14,381 7,993 8,845 Total Liabilities 894,523 847,270 759,193 758,308 769,171

ANNUAL REPORT 2007 189 ( Million Baht ) Consolidated 2007 2006 2005 2004 2003 Shareholders’ equity Share capital Authorized share capital Preferred shares - - - - 5 Ordinary shares 30,486 30,486 30,486 30,486 26,895 Issued and paid-up share capital Preferred shares - - - - 5 Ordinary shares 23,882 23,821 23,733 23,636 23,535 Premium on share capital Premium on preferred shares - - - - 27 Premium on ordinary shares 18,013 17,904 17,737 17,555 49,498 Premium on expired warrants - - - - 5,521 Appraisal surplus on asset revaluation 9,742 9,883 10,024 8,763 8,903 Revaluation surplus on investments 568 (157) (529) 952 1,989 Retained earnings (deficit) Appropriated Legal reserve 2,920 2,160 1,470 770 800 Other reserves - - - - 26,675 Unappropriated (deficit) 44,870 34,627 25,679 14,672 (65,187) 99,995 88,238 78,114 66,348 51,766 Minority interests 0 0 1 318 348 Total Shareholders’ Equity 99,995 88,238 78,115 66,666 52,114 Total Liabilities and Shareholders’ Equity 994,518 935,509 837,308 824,974 821,285

Off-balance sheet items - contingencies Aval to bills and guarantees of loans 1,142 639 747 615 5,537 Liability under unmatured import bills 5,674 5,163 5,546 4,291 3,188 Letters of credit 20,497 19,200 13,627 14,103 9,996 Other contingencies 1,703,176 1,125,294 829,779 532,959 431,328

190 ANNUAL REPORT 2007 ( Million Baht ) Consolidated 2007 2006 2005 2004 2003 Interest and dividend income Loans 45,842 42,411 31,604 27,693 26,090 Interbank and money market items 3,841 4,487 2,387 1,527 2,250 Hire purchase and financial lease 1,183 465 24 19 31 Investments 4,650 4,447 4,051 3,760 4,415 Total Interest and Dividend Income 55,516 51,810 38,066 32,999 32,786 Interest expense Deposits 15,946 14,554 5,754 5,548 7,747 Interbank and money market items 208 513 339 230 233 Short-term borrowings 902 1,002 56 5 - Long-term borrowings 1,029 1,128 1,134 1,250 5,232 Total Interest Expense 18,085 17,197 7,283 7,033 13,212 Net income from interest and dividend 37,431 34,613 30,783 25,966 19,574 Reversal of bad debt and doubtful accounts 4,290 652 599 (6,159) (12,026) Loss on debt restructuring 1,597 4,767 3,063 8,919 13,461 Net income from interest and dividend after bad debt and doubtful accounts (reversal) and loss on debt restructuring 31,544 29,194 27,121 23,206 18,139 Non-interest income Gain on investments 1,176 211 427 2,143 1,451 Share of profit (loss) from investments on equity method 120 178 (35) 82 212 Fees and service income Acceptances, aval and guarantees 1,009 811 685 577 598 Others 12,334 9,827 8,656 7,531 6,472 Gain on exchanges 2,717 1,670 1,129 1,805 1,822 (Loss) gain on transfer of financial assets - - - (569) 2,578 Other income 1,541 1,458 1,440 580 560 Total Non-interest Income 18,897 14,155 12,302 12,149 13,693 Non-interest expenses Personnel expenses 9,344 8,177 7,841 6,564 5,246 Premises and equipment expenses 6,170 5,222 4,336 3,814 3,270 Taxes and duties 2,420 2,241 1,677 1,386 1,233 Fees and service expenses 3,333 2,931 2,157 3,210 2,662 Directors’ remuneration 87 86 73 55 55 Contributions to Financial Institutions Development Fund 3,042 2,769 2,826 2,802 2,694 Other expenses 4,633 4,134 2,516 2,016 1,793 Total Non-interest Expenses 29,029 25,560 21,426 19,847 16,953 Income before income tax 21,412 17,789 17,997 15,508 14,879 Income tax expense 6,407 4,126 4,003 116 94 Net income before minority interests 15,005 13,663 13,994 15,392 14,785 Minority interests in net income - 1 (64) (52) (29) Net income 15,005 13,664 13,930 15,340 14,756 Basic earnings per share 6.28 5.74 5.87 6.49 6.27 Number of the weighted average number of ordinary shares (million shares) 2,387 2,381 2,371 2,362 2,353

ANNUAL REPORT 2007 191

CORPORATE GOVERNANCE • Corporate Governance Committee Report • Human Resources and Remuneration Committee Report • Corporate Governance • Dividend Policy • Corporate Social Responsibility Activities • Factors Affecting Investment Decisions

7 Customer Segments To best serve each customer segment with the highest effectiveness

CORPORATE GOVERNANCE COMMITTEE REPORT The Corporate Governance Committee, as assigned The continuing efforts of KASIKORNBANK in promoting by the Board of Directors, is responsible for overseeing and developing corporate governance practices have been corporate governance activities of the KASIKORNBANK in recognized and commended publicly, as represented by compliance with the Statement of Corporate Governance the recent quality assessment of Annual General Meeting Principles and international best practices. The principles arrangement among listed companies in 2007, organized have been strictly adhered to, and activities have been by the Office of the Securities and Exchange Commission promoted continuously as an organizational culture. In in which the Bank has achieved an excellent assessment 2007, the Corporate Governance Committee organized five result. The Bank has been regarded as among those firms meetings to perform the following: having the best practices in Annual General Meeting • Ensuring that the whole organization has undertaken arrangement for two consecutive years. It also won its business operations and actions in line with the an honorary award for best shareholder treatment at Statement of Corporate Governance Principles, as the Shareholders Awards 2007, organized by Thailand specified. Securities Depository Co., Ltd., in cooperation with Thai • Endorsing an action plan and activities to enhance Investors Association, Thai Listed Companies Association good corporate governance, to ensure that all parties and Thai Investor Relations Club. have acted in accordance with the Statement of Corporate Governance Principles, and to promote it The Bank strongly believes that good corporate governance as an organizational culture. and its ongoing development is an important part of stability • Overseeing the implementation of activities under the and will enhance solid foundation of the organization in the Corporate Social Responsibility (CSR) policy and plan. long run. • Providing information on the Statement of Corporate Governance Principles to all staff and publishing the Corporate Governance Manual for distribution among KGroup officers, customers, investors, shareholders and the general public. • Reviewing the Statement of Corporate Governance Pol. Gen. Pow Sarasin Principles, Board Committee Charters, Statement Chairman of the Corporate Governance Committee of Business Conduct and Code of Conduct, in line January 31, 2008 with the best practices, as prescribed by the Stock Exchange of Thailand and all regulatory agencies.

194 ANNUAL REPORT 2007 HUMAN RESOURCES AND REMUNERATION COMMITTEE REPORT KASIKORNBANK’s Board of Directors has appointed In regarding to the recruitment of directors and senior the Human Resources and Remuneration Committee executives, the Committee shall recruit and propose comprising three directors. Dr. Schwin Dhammanungune, qualified candidates based on the criteria specified by Independent Director, is Chairman of the Human Resources the Bank, and take into consideration the succession and Remuneration Committee, and the other two members plan for qualified candidates for the positions of Chief are M.R. Yongswasdi Kridakon, Non-Executive Director, Executive Officer or President. Attention will be duly and Mr. Chaisak Saeng-Xuto, Independent Director. Five paid to maintaining an appropriate proportion, size meetings were held in 2007. and composition of the Board in line with regulatory requirements, the Bank’s Articles of Association, and good The Human Resources and Remuneration Committee Corporate Governance Principles. has, per the Committee Charter, the duties and responsibilities of recruiting new directors, reviewing human resource Upon reviewing the remuneration for directors and and remuneration policy, and reviewing compensation high-ranking executives, as disclosed in the Annual Report, for the Chief Executive Officer, President, Executive the Human Resources and Remuneration Committee Vice Presidents and other high-ranking executives. The deemed it commensurate with their duties and responsibilities, Committee is also responsible for recommending the according to the Bank’s criteria, and also taking into successors for high-ranking executives, management consideration the Bank’s performance results, performance development programs, management rotation, and human assessment, as well as the overall business and economic resources strategies, in line with the business direction of environment. the Bank.

Dr. Schwin Dhammanungune Chairman of the Human Resources and Remuneration Committee January 15, 2008

ANNUAL REPORT 2007 195 CORPORATE GOVERNANCE

1. Rights of Shareholders Recognizing the importance of shareholders, the Board of decision. All of the information sent in documentation form Directors makes every effort to treat its shareholders equally was also posted on the Bank’s website 30 days prior to the and fairly, as specified under the Articles of Association of the meeting date in order that shareholders received the information Bank and related laws. The basic legitimate rights of shareholders in a convenient and timely manner. Moreover, the meeting include the right to participate in shareholders’ meetings, the notice was published in a Thai daily newspaper for at least right to appoint a proxy to participate and vote at shareholders’ three consecutive days and at least three days before the meetings, the right to vote for the appointment or removal of meeting date. The notice of the general meeting of shareholders individual directors, the right to vote on the annual appointment and the meeting documentation were also prepared in English of independent auditors and setting of annual audit fees, and and posted on the Bank’s website to facilitate participation the right to vote on various other businesses of the Bank. by foreign shareholders. Shareholders’ rights also include eligibility to receive dividend In advising about the Annual General Meeting of payment, the right to give opinions and enquire into business Shareholders, the Bank detailed which documents were matters of the Bank during shareholders’ meetings, and the necessary for shareholders to present on the meeting right to receive sufficient information in a timely manner. day in order to have the right to attend the meeting, including Apart from the above basic rights, the Bank emphasizes the a proxy form as per the Ministry of Commerce’s designation. disclosure of accurate, complete, timely, and transparent Also included was a list of independent directors, the Chairman information to shareholders. Information updates are regularly of the Board, the Chief Executive Officer, the President, and provided on the Bank’s website in three languages - Thai, any other persons whom shareholders might wish to appoint English and Chinese - as well as to the public media. In 2007, the as proxy, to vote at the meeting on his/her behalf. Board of Directors undertook the following tasks to facilitate 3. On the meeting day, the Bank arranged for shareholder and promote the rights of shareholders: registration to begin at least one hour before the meeting. 1. The Board of Directors’ Meeting No. 2/2007 on February Preparation of the venue, greeters and an appropriate number 22, 2007 resolved to have the 2007 Annual General Meeting of registration staff were arranged to assist shareholders before of Shareholders scheduled for April 5, 2007. The resolution the meeting. A barcode system was used for shareholder was published on the website of the Stock Exchange of registration and proxy registration, allowing for a quick and Thailand beginning the day the resolution was passed. efficient registration procedure. Printed ballots were handed 2. Before the Annual General Meeting of Shareholders, the out to each shareholder for voting. Bank arranged for delivery of the meeting notice (which 4. Before the meeting commenced, the Chairman of the included information on the date, time and venue of the Board clearly informed all shareholders of voting and vote- meeting), a map of the meeting place, and a detailed agenda counting procedures. The counting of votes was carried out in accordance with the Stock Exchange of Thailand’s in a transparent manner with one share being equal to one requirements and the Bank’s Articles of Association. In addition, vote. Approval of a resolution was based on the majority of proxy forms and a complete set of supporting documents votes, except for special resolutions which required approval for the meeting’s agenda, together with the Bank’s articles of no less than two-thirds or three-quarters of all votes of related to the meeting, were sent to shareholders for their eligible voters present at the meeting. This practice was in consideration more than 14 days prior to the meeting date. line with the Bank’s Articles of Association and the law. Along with the meeting notice, shareholders were sent sufficient In the 95th General Meetings of Shareholders, the information for voting on every agenda item, each of which Chairman of the Board acted as the Chairman of the was identified clearly as either ‘for acknowledgment’ or meeting which was also attended by the Chief Executive ‘consideration’, together with sufficient and concrete comments Officer, the President, and the Chairmen of all Board Committees. by the Board of Directors to help shareholders in their voting Altogether, there were 14 directors in attendance:

196 ANNUAL REPORT 2007 Annual General Meeting of Shareholders at KBank’s Head Office The atmosphere of the Annual General Meeting of Shareholders

1. Mr. Banyong Lamsam ask questions within an appropriate time frame, and allowed Chairman directors in charge of the topics that were raised to clarify and 2. Pol. Gen. Pow Sarasin provide complete information to shareholders. Moreover, Vice Chairman and Chairman of the shareholders were given the opportunity to submit questions Corporate Governance Committee concerning the meeting agenda in advance, since the day 3. Mr. Banthoon Lamsam they were notified of the meeting until one week before the Director, Chief Executive Officer and Shareholders’ Meeting day. These criteria were presented Chairman of the Risk Management Committee via the information dissemination system of the Stock Exchange 4. Dr. Prasarn Trairatvorakul of Thailand and the Bank’s website. For shareholders who Director and President entered the meeting after it had commenced, voting or casting 5. Mr. Sukri Kaocharern of ballots was allowed for agenda items that were still under Director consideration. 6. M.R. Sarisdiguna Kitiyakara Director and Chairman of the Audit Committee 2. Equitable Treatment of Shareholders 7. Mr. Somchai Bulsook Recognizing the importance of equitable treatment Director of shareholders, the Board of Directors has established a 8. Ms. Sujitpan Lamsam Corporate Governance Policy based on shareholders’ rights Director and the equal and fair treatment of all shareholders, and has 9. Professor Khunying Suchada Kiranandana undertaken the following tasks: Director 1. To promote good governance before the Shareholders’ 10. Mr. Charles L. Coltman, III Meeting, the Bank provided shareholders the opportunity to Director propose matters of importance for the Bank to consider including 11. Dr. Abhijai Chandrasen as agenda items, as per specified criteria. Shareholders were Director also allowed the opportunity to propose qualified candidates for 12. Ms. Elizabeth Sam director under the prescribed process for election in the General Director Meeting of Shareholders. Guidelines on the proposing procedure 13. Mr. Chaisak Saeng-Xuto and shareholders’ rights were provided to shareholders through Director the information dissemination system of the Stock Exchange of 14. Dr. Schwin Dhammanungune Thailand and the Bank’s website, including the Bank’s decisions Director and Chairman of the Human Resources and reasoning relating to the proposed matters or candidates. and Remuneration Committee In 2007, the Bank posted this notification 4 months in advance 5. During the meeting, the Chairman of the meeting offered of the meeting but did not receive any responses regarding all shareholders an equal opportunity to give suggestions and new issues for the agenda or candidates for director.

ANNUAL REPORT 2007 197 2. The Bank arranged for the Shareholders’ Meeting to • Employees are prohibited from buying, selling, transferring be conducted in a transparent and efficient manner, in line with or accepting the transfer of securities in any manner that may take the Bank’s Articles of Association. The consideration of items advantage of outsiders by using inside information that may have and voting were conducted in accordance with the announced a significant impact on the price of securities and has not been agenda. This included consideration of the election of each disclosed to the public or the Stock Exchange of Thailand. director and his/her remuneration, together with consideration Though they may have become aware of such information on the annual appointment of independent auditors, the audit in their capacity, or as employees of the Bank, such actions are fee setting and other agenda items as specified in the meeting prohibited whether to favor themselves or others, or to reveal notice. During the meeting, apart from related meeting documents, such information to others to do or receive benefit thereof. the Bank has also prepared video presentation and provided • The Bank has regulated that directors, officers in the English translation for foreign shareholders. position of Executive Vice President, and those in the position 3. Shareholders unable to participate in the meeting had of Department Head or equivalent in the Financial Accounting the option to appoint proxies to the meeting. Proxies could be Division or Finance and Control Division, must report their independent directors, or the Chairman of the Board, or the Chief ownership of securities issued by the Bank, including those Executive Officer, or the President or any other person instructed under ownership by their spouses and minor children. to participate in the vote on behalf of the shareholders. Proxy Moreover, they have to report every change in the holding forms were designed such that shareholders were able to of securities issued by the Bank, i.e. by any purchase, sale, designate the direction of the voting. transfer and acknowledgement of transfer, as regulated by 4. Ballots were used in voting. To enable vote counting to the Office of the Securities and Exchange Commission, be carried out efficiently and rapidly, the Bank collected only the and also submit such reports to the Board of Directors. ballots of shareholders in opposition of or abstaining from the Furthermore, the Bank also requires that all personnel who vote. Concerning the appointment of individual directors, to have access to significant inside information, under the comply with the operating guidelines of the Office of the above criteria, report their ownership of securities issued Securities and Exchange Commission, the Bank collected the by the Bank, including those under the possession of their ballots from all shareholders and proxies present at the spouses and minor children, to the Bank’s compliance unit. meeting and arranged to have officers from a legal advisory • Concerning the supervision of securities trading and firm verify the votes and confirm the correctness of voting, prevention of the use of inside information, the Bank has and to keep the ballots for future reference. stipulated a silent period for securities trading by directors 5. Comprehensive minutes of the meeting were recorded. and staff, prohibiting trading of securities issued by the Bank They comprised details of significance, e.g., meeting resolutions, starting one month prior the Bank’s disclosure of financial the voting result (divided into approval, opposition and abstention statements or quarterly performance, until the second day for each agenda item), questions, explanations and opinions of after the information has been disclosed. Regulations on the meeting. The minutes of the meeting were sent to official the prevention of the use of inside information have been regulatory agencies within 14 days after the shareholders’ meeting, regularly disseminated to directors, staff and related personnel and to shareholders for their acknowledgment, as well as posted through various operating channels of the Bank, including on the Bank’s website. Moreover the Bank arranged for the meeting regular monitoring of actions. to be video recorded for future benefits. 6. The Bank has established regulations to supervise the 3. Roles of Stakeholders use of inside information, concerning securities trading of directors The Bank places particular emphasis on the equal rights and employees, in compliance with the Securities and Exchange of all stakeholders, both internal stakeholders (shareholders, Act. The regulations are reviewed regularly, the essence of which the Board of Directors, and employees of the Bank and is summarized as follows: subsidiary companies) and external stakeholders (customers, • All operational units must set up a system to maintain business allies, creditors, competitors and related government inside information under proper supervision. agencies) as well as the community, the society and the environment. 198 ANNUAL REPORT 2007 KBank’s booth display at the Shareholders’ Day event, held at KBank’s Corporate Governance Manual The Esplanade, Ratchadaphisek Road

The Bank has established procedural guidelines that managers of the Bank are also required to strictly abide by are regarded as the joint responsibility of all directors and the Bank’s Corporate Governance guidelines. employees to adhere to and to practice towards all Shareholders: The Bank is determined to achieve stakeholders. The guidelines are summarized as follows: good operating performance, sustainable growth, and • Fairness: The Bank demonstrates fairness to all competitiveness, with due consideration to both current and parties having business relationships with the Bank, and future risk factors, in order to maximize shareholders’ value does its best to avoid any bias or event that would lead to over the long-term. The Bank discloses all information in a conflict of interest. a fair and transparent manner, and makes every effort to • Ethics: The Bank adheres to its Statement of Business protect the Bank’s assets and uphold its reputation. Conduct and integrity in every business endeavor it pursues. The Board of Directors: The Board of Directors is fully • Professionalism: The Bank maintains professional aware of the rights of stakeholders and undertakes standards, aiming high for superb quality integrated with measures to ensure that these legitimate rights are provided, modern and sophisticated technology. and that all stakeholders are treated equally and fairly. • Responsiveness: The Bank has the readiness to respond Employees: Employees are valuable assets of the Bank. to the needs of the customers and of society, as well as to The Bank continues to seek capable and experienced changes in the economy and technology, both at present and personnel in line with its growth and the demands of the in future. organization. Necessary training programs have been • Discipline and Compliance: The Bank pursues business continuously provided to enhance employees’ capabilities with discipline and ethical principles, and certifies that its and appropriate remuneration is offered comparable to business operations comply with the law, the Statement of other leading companies. A favorable business culture Business Conduct, and the Code of Conduct for employees. and atmosphere is promoted in the workplace, together In order to ensure the rights of stakeholders, the Bank with fair and equal treatment of all employees. The Bank has established a Statement of Business Conduct and a recognizes the need for proper welfare and security for Code of Conduct for all employees in writing, which has employees, and provides such benefits as provident funds, been disseminated through the Bank’s website and internal scholarships for employees and their children, as well as communication medias such as newsletters and KASIKORNTV, safety procedures such as fire drills, the installation of fire for strict adherence by directors, executives and employees prevention systems and other efforts to assure safety and at all levels. In addition, the Bank has assigned the Compliance security. Department to monitor compliance, and to periodically report Customers: The Bank aims to promote customer to the Corporate Governance Committee for their consideration satisfaction by offering high quality financial products and acknowledgement. Later on Jan 1, 2008, the Corporate and services, and through its readiness to respond to Governance Unit under the Office of Corporate Secretary, the needs of customers. The Bank gives due attention Corporate Secretariat Division, was set up to oversee all to and holds itself accountable to customers, and more governance issues of the Bank. All departments and all product importantly, gives high significance to the protection of

ANNUAL REPORT 2007 199 their confidential information. Customers are provided for sound environmental protection through continuing efforts with explanations on the risks related to the use of various and activities, as shown under the topic of Corporate Social financial services and are given the opportunity to express Responsibility Activities in this annual report. opinions through responsible departments that the Bank Realizing the importance of the involvement of stakeholders, has assigned to handle customer complaints. the Bank provides communication channels to receive Counter-parties: The Bank respects compliance with suggestions, information, or complaints of improper action contracted terms and conditions in trade, in fair and acceptable from stakeholders, which are conveyed to the Bank’s Board competition, and refrains from all dishonest practices. of Directors in accordance with the guidelines disclosed on Competitors: The Bank observes fairness in competition the Bank’s website. For transparency purposes, as well as and does not practice any dishonest methods that are for the protection of the rights of the information providers, deleterious to competitors. the Bank has established a policy for receiving information Creditors: The Bank abides by lending terms and conditions, and complaints in writing, with specific management procedures and all legitimate duties to creditors, debenture holders and and the protection of confidential information. Only designated depositors. The Bank also gives clear explanations to customers authorized persons have access to the confidential information on all the possible risks involved with non-deposit financial and are able to investigate complaints and report to the services. Board of Directors. In the case of a stakeholder receiving Responsibility to the Community, the Society and damages from the disregard of their lawful rights, the Bank has the Environment: The Bank operates as a good financial also installed measures to give fair treatment to the stakeholder. institution and conducts business according to the Statement of Corporate Governance Principles. The Bank believes 4. Disclosure and Transparency that social responsibility is a part of sustainable development Realizing the importance of transparent disclosures, the and has established the Corporate Social Responsibilities Bank has set up and supervised clear policies, approved by (CSR) Policy as follows: the Board of Directors, concerning communication with • To strictly adhere to the Statement of Business external parties. The objective of these policies is to ensure Conduct, and to participate in social development and that the disclosures of the Bank’s financial and non-financial environmental protection. information to shareholders, investors, analysts, regulatory • To encourage employees at all levels to strictly abide agencies and the general public are accurate, complete, timely, by the Code of Conduct and CSR Principles. equally accessible to all, transparent, and in accordance with • To embark on CSR activities which encompass related laws and regulations. In addition, the Bank has demonstration of concerns for all stakeholders. evaluated the effectiveness of disclosure procedures. • To arrange for a good working environment by placing The Bank has authorized the Chairman, the Chief considerable emphasis on safety, occupational health, Executive Officer, the President and the Chief Investor environmental concerns and working facilities for employees Relations Officer of the Corporate Secretariat Division, and customers. and/or the Head of Investor Relations to publicly • To promote environmental preservation. disseminate the Bank’s information, as well as to • To refrain from credit grants to any projects not in reply to shareholders’ questions and to those interested compliance with the national environmental protection laws. in investing in the Bank’s securities. On May 18, 1998, The Bank acts as a good citizen, is non-partisan and not the Bank established the Investor Relations and aligned with any political party. The Bank bears in mind its Shareholders’ Services Unit under the Executive Services role as part of the greater society and its responsibility to give Department, Corporate Secretariat Division for the first time. assistance to society and promote activities that benefit the Later in 2007, there was a change in the organizational structure community, the society and the environment, in order to and the unit name was changed to Investor Relations Unit, Office enhance the living standards of the people. The Bank of Corporate Secretary, with the objective and responsibility recognizes the importance of and demonstrates concern of handling investor relations-related activities.

200 ANNUAL REPORT 2007 Analyst meeting at KBank’s Head Office Presenting information at a meeting with fund managers

Responsibilities of the Investor Relations Unit include results. This practice is regarded as one of the key policies of setting up annual investor relations plans, and providing the Investor Relations Unit, which always works to ensure that timely and accurate information to shareholders, investors, operations of investor relations are consistent with the Bank’s analysts and credit rating agencies, both local and international, operations under the Statement of Corporate Governance so as to enhance the good image and reliability of the Bank Principles. By doing so, the Bank can assure that its to investors, and deliver highly efficient service to the Bank’s disclosures are transparent and equally accessible to shareholders. all, especially before the report on the Bank’s quarterly In 2007, the Bank disclosed important and adequate operating results to the Stock Exchange of Thailand. financial information in its financial statements. The disclosures For disclosures on important information, the Bank uses were in line with the Bank of Thailand regulations, the Stock various communication channels, and also communicates Exchange of Thailand, the Office of the Securities and Exchange regularly through the public media in order for the Bank’s Commission and Thai accounting standards, and were shareholders and stakeholders to get good access to the disseminated via the SET Community Portal and the Bank’s information. Information outlets include: website. The financial statements were checked by and 1. The Stock Exchange of Thailand received qualified opinion of certified public accountants, 1) The Annual Report and were approved by the Audit Committee before being 2) The Bank’s Financial Statements disclosed to shareholders, while the Board of Directors 3) Notification of the Board of Directors’ Resolutions of the Bank also disclosed its responsibility for financial and Other Matters statements in the annual report. Moreover, the Bank has 2. The Office of the Securities and Exchange published unreviewed/reviewed and unaudited/audited, Commission quarterly financial statements, as well as other non-financial 3. The Ministry of Commerce information, such as the Management Discussion and 4. Newspapers Analysis and information on the Bank’s corporate governance, 5. Magazines for the benefit of shareholders, investors and analysts. 6. Televisions Information accuracy has been maintained through regular 7. KBank IR/PR News evaluations. 8. KBank website (www.kasikornbankgroup.com) The Investor Relations Unit undergoes a silent period of Information available in three languages: Thai, 7 days before the quarterly operating results are reported English, and Chinese to the Stock Exchange of Thailand. During this period, no 9. Company Visits/One-on-One Meetings information related to the Bank’s performance is revealed 10. Non-deal Roadshows to shareholders, investors or analysts. During this period 11. Analyst Meetings there are no company visits allowed and no participation 12. Press Conferences in one-on-one meetings, group analyst meetings, and 13. Written communications by mail to shareholders no replies to questions related to the Bank’s operating

ANNUAL REPORT 2007 201 In 2007, the Bank’s executives and Investor Relations Unit personally met with various persons to provide information on the following occasions: Type of Meeting No. of Events No. of Companies No. of Persons One-on-one Meetings 194 412 518 Conference Calls 24 25 29 Group Analyst Meetings 13 162 187 Investor Conferences 1 28 34 Roadshows 3 68 92 Total 235 695 860 Of the above figures, 18 meetings were with 193 persons from 146 companies who met with the Bank’s Chief Executive Officer or President. Some companies also met with the Bank more than once and on more than one occasion. In 2007, KBank Investor Relations was widely recognized conducted by various magazines, details of which may be by investors and received the Best Investor Relations award found in this annual report under the topic of Awards and and the Best Investor Relations Officer award from surveys Commendations.

All investors can contact the Investor Relations Unit at: Investor Relations Unit : KASIKORNBANK PCL Head Office, 33rd floor Investor Relations Unit, Office of Corporate Secretary Corporate Secretariat Division 1 Soi Kasikornthai, Ratburana Road, Bangkok 10140 E-mail: [email protected] Chief Investor Relations Office : Tel 0 2470 2673 - 0 2470 2674 Fax 0 2470 2680 For Thai Investors and Registrar Service : Tel 0 2470 2663 - 0 2470 2667 Fax 0 2470 2747 For International Investors : Tel 0 2470 6900 - 0 2470 6901 Fax 0 2470 2690 0 2470 2659 - 0 2470 2662

202 ANNUAL REPORT 2007 5. Responsibilities of the Board of Directors as any director who does not take part in the management 5.1. Structure of the Board of Directors of the Bank or an affiliated company or associated company. Composition of the Board of Directors The Independent Director is independent from management The Bank’s Board of Directors is comprised of qualified and from controlling shareholders, and has no business persons who possess knowledge, abilities and experience relationship with the Bank in a way that might impact his/ which are beneficial to the Bank. According to the company her independence in decision-making. The qualifications registration in the latest update from the Ministry of Commerce, of the Bank’s “Independent Directors”, which have been dated October 10, 2007, the Board of Directors of the Bank is defined more stringently than the criteria set by the Office composed of 16 members. The election of Board members of the Securities and Exchange Commission and the Stock follows the resolutions of the Shareholders’ Meetings, Exchange of Thailand, are as followings: as well as the rules, regulations and the Bank’s Articles of 1. An Independent Director must not hold more than Association. The number of directors is appropriate to the 0.5 percent of the Bank’s shares with voting rights, or those Bank’s business operations and the structure is with the Bank of any affiliated or associated company. of Thailand’s notification on the “Structure of Directors for 2. An Independent Director must not take part in Promoting Corporate Governance at Commercial Banks”. management and not be an employee, staff member, KBank’s Board of Directors includes: or adviser who receives a regular salary; nor be in a - 2 Executive Directors profession such as auditor, lawyer, etc., that might affect - 6 Non-Executive Directors the giving of impartial opinions to the Bank, the affiliated - 8 Independent Directors (accounting for 50% of the or the associated company. Furthermore, the Independent total Board members) Director must not be someone who has control over the The primary authorized directors with signatory authority Bank, the affiliated or the associated company, nor be a on behalf of the Bank are Mr. Banyong Lamsam, person with a conflict of interest, except in cases where Mr. Banthoon Lamsam, Dr. Prasarn Trairatvorakul, or he/she has resigned from any such position at least one Ms. Sujitpan Lamsam. Any of these persons must co-sign year previously. with any of the following directors: Pol. Gen. Pow Sarasin, 3. An Independent Director must have no direct Mr. Sukri Kaocharern, M.R. Yongswasdi Kridakon, or or indirect business relationship that would restrict the Dr. Abhijai Chandrasen. Binding agreements of the Bank Director’s independence and impartiality, in an amount or must be signed by two authorized directors and affixed value significant to the Bank’s income, nor benefit, either with the Company Seal. directly or indirectly from the finances or management of the Bank, the affiliated or the associated company, nor be Qualifications of Independent Directors a person with a conflict of interest that could affect him/her The Bank has defined the meaning of “Independent from giving an unbiased opinion. Director” in conformity with the Statement of Corporate 4. An Independent Director must not be a close Governance Principles of the Stock Exchange of Thailand, relative of any senior executives or a major shareholder of the requirements of the Bank of Thailand on the ‘Structure the Bank, the affiliated or the associated company. Neither of Directors for Promoting Corporate Governance at shall he be a person with a conflict of interest, nor be a Commercial Banks’, and the guidelines of the Office of the representative acting to safeguard the interests of any Securities and Exchange Commission, in order to create confidence in investors and maintain a balance in good governance. The Bank’s “Independent Director” is defined

ANNUAL REPORT 2007 203 Term of Office Separation of the Chairman and the Chief Executive The Board of Directors has an established term of office for Officer Positions directors in the Articles of Association and the Corporate The Chairman of the Board of Directors is not the same Governance Policy of the Bank. At each General Meeting person as the Chief Executive Officer. He is neither a regular of Shareholders, one-third of the directors - or if their employee, nor an executive of the Bank. The Bank has number is not a multiple of three, then the number nearest clearly set the scope of duties, responsibilities and governance to one-third - must retire from office. The directors who authority in the Board of Directors Charter for each of the have been in office the longest shall retire first. If there above positions. If and when the Chairman and the Chief is any disagreement as to who shall retire, it shall be Executive Officer are in any way related, the Board shall decided by drawing lots. The retiring directors may also appoint a senior director who is an independent director be re-elected. Regarding the term of office of Board to perform specific functions, where necessary, that would Committee members, members of the Audit Committee, be expected of an independent Chairman of the Board of the Human Resources and Remuneration Committee, and Directors. the Corporate Governance Committee shall hold office for a term of 3 years, while members of the Risk Management Corporate Secretary Committee shall hold office for a term of 2 years. The Bank has appointed Ms. Tida Samalapa as Corporate Secretary. She has suitable knowledge and experience to Directorship of the Board of Directors and Executives perform this function and assumes the role of the Secretary to in other Companies the Board of Directors. The Office of the Corporate Secretary In compliance with the Statement of Corporate Governance of the Corporate Secretariat Division is a unit supporting Principles, the Board of Directors Meeting No. 11/2006 the secretariat functions of the Bank, consistent with on November 30, 2006, established guidelines that the the Statement of Corporate Governance Principles for Bank’s directors and executives may hold a directorship effective management of the Bank. The main duties and in no more than five listed companies. They shall not hold responsibilities of the Corporate Secretary include: the position of chairman, executive director or director with 1. Provide basic advice pertaining to laws and regulations signatory authority in more than three business groups at governing commercial banking business and the Bank’s other companies, in conformity with the criteria of the Bank Articles of Association, monitoring compliance on a regular of Thailand and the Stock Exchange of Thailand. basis, and reporting on any significant changes to the Board. The details of directorships held by the Bank’s directors 2. Arrange the Shareholders’ Meeting and the Board and executives in other companies are reported in the of Directors’ Meeting in accordance with the laws and Annual Report under the topic of Board of Directors regulations, the Bank’s Articles of Association and related and Executives, as well as the topic of Directorship of procedures. KASIKORNBANK Directors and Executives in Subsidiaries, 3. Prepare minutes of the Shareholders’ Meeting and Associated and Related Companies. At present, no KBank the Board of Directors’ Meeting, and monitor subsequent director or executive holds a directorship in more than five compliance with the resolutions of those meetings. listed companies, nor are any in the position of chairman, 4. Ensure that corporate information disclosures to executive director or director with signatory authority in regulatory agencies are in accordance with the laws and excess of three business groups at other companies. regulations. 5. Communicate with shareholders on their legitimate rights and on the Bank’s information. 6. Assist in Board activities.

204 ANNUAL REPORT 2007 5.2 Board of Directors 5. Supervise and review the balance between the Bank’s The members of the Board of Directors are qualified short-term and long-term objectives. persons who have knowledge, capability and experience 6. Ensure that the Bank shall vest in the Chief beneficial to the Bank. They are: Executive Officer and the President the authority to initiate, 1. Mr. Banyong Lamsam Chairman commit and approve payments for expenditures approved 2. Pol. Gen. Pow Sarasin Vice Chairman in the Capital Expenditure Budget, and other budgets 3. Mr. Banthoon Lamsam Executive Director approved by the Board for the purpose of special projects. 4. Dr. Prasarn Trairatvorakul Executive Director The Board shall also review and approve any credit 5. Mr. Sukri Kaocharern Director proposal beyond the established limits of delegated lending 6. M.R. Sarisdiguna Kitiyakara * Director authority. 7. M.R. Yongswasdi Kridakon Director 7. Review and approve the human resources policies, 8. Mr. Somchai Bulsook * Director management development plans and remuneration policy. 9. Ms. Sujitpan Lamsam Director The Board shall seek and nominate successors to the 10. Prof. Khunying Suchada Kiranandana * Director Chief Executive Officer and the President, as well as 11. Mr. Charles L. Coltman, III * Director appraise their performance and ensure that effective 12. Dr. Abhijai Chandrasen Director performance assessments are undertaken for Bank executives. 13. Ms. Elizabeth Sam * Director 8. Ensure the existence of an effective internal control 14. Mr. Chaisak Saeng-Xuto * Director system and appropriate risk management framework. 15. Dr. Schwin Dhammanungune * Director 9. Ensure an effective audit system executed by both 16. Prof. Dr. Pairash Thajchayapong * Director internal and external auditors. * Independent Directors 10. Approve quarterly, semi-annual and annual financial reports; ensure that the reports are prepared Responsibilities of the Board of Directors under generally accepted accounting standards. The Board of Directors is responsible to KBank’s 11. Ensure that the Bank has a proper system in place shareholders. Each director represents all shareholders and to communicate effectively with all stakeholders and the public. takes part in supervisory and regulatory functions in the Bank’s operations, in an independent and impartial manner, for Selection of Board Members the benefit of all shareholders and other stakeholders. The Bank has established the Human Resources and The Board has roles and responsibilities designated in Remuneration Committee to select and review persons the Board of Directors Charter as follows: nominated for the positions of directors, the Chief Executive 1. Supervise and manage the Bank so that it complies Officer and the President. The appropriate proportion, with the law and the Bank’s objectives, the Articles of number and composition of the committee are taken into Association and the resolutions of Shareholders’ Meetings. consideration, which must also conform to regulatory 2. Approve the Vision, Mission, Values and Statement statutes, the Bank’s regulations and the Bank’s Corporate of Business Conduct. Governance Principles. Selection guidelines include: 3. Review and discuss the Management’s proposed 1. Consider persons with the necessary prerequisite strategic options and approve major proposals with respect qualifications specified by the Bank, and not having to the Bank’s direction and policies. The Board also reviews characteristics prohibiting them from holding a directorship and approves the Annual Business Plan, Capital Expenditure in a commercial bank or securities company per the criteria Budget, and performance goals proposed by the Management. of the Bank of Thailand, the Office of the Securities and 4. Monitor the Bank’s performance and progress toward Exchange Commission, and other related agencies. achieving set objectives as well as compliance with the laws, regulations and related policies.

ANNUAL REPORT 2007 205 2. Review their qualifications based on the 4) Persons receiving the highest number of approving questionnaire on the qualifications of a commercial bank votes among all candidates are to be elected in a director in accordance with related laws. respective order, in proportion to the number of 3. Each Board member must have the qualifications, positions to be filled at that meeting. skills, knowledge and basic experience defined by the Bank. 5) In the event of a tied vote on candidates for the last The Bank gives shareholders the opportunity to opening for a director, the chairman of the meeting propose candidates for consideration and election to such shall have the deciding vote. positions in the Annual General Meeting of Shareholders 2. At each Annual General Meeting of Shareholders, (AGM), according to specified criteria and procedures. The one-third of the directors, or if the number is not a multiple Human Resources and Remuneration Committee may of three, then the number nearest to one-third must retire propose to the Board of Directors to set up a special from office. The directors who have been in office the committee comprising the Bank’s Directors or external longest shall retire first. If there is disagreement as to who personnel to undertake the duty of making nominations. should retire, it shall be decided by drawing lots. The If there is no suitable person available, the recruitment retiring directors may be re-elected. process will be restarted and new qualified candidates will 3. Any director who passes away, or tenders his/her be proposed. resignation prior to the end of his/her term, or is resolved For the nomination of Independent Directors, the Human to be removed by a meeting, or ordered by a court of Resources and Remuneration Committee will consider law to resign, or whose qualifications fall short of criteria qualified persons who do not have characteristics prohibiting and prerequisites specified, shall be removed from office them from holding such positions as prescribed by the immediately. regulations of the Bank of Thailand and other official agencies 4. If a vacancy in the Board of Directors occurs for that regulate the Bank. Qualified candidates will be reasons other than the expiration of the director’s term of recommended to the Board of Directors for consideration office, the remaining Board members shall elect a person and proposed to the Annual General Meeting of Shareholders who has the proper qualifications, and has no prohibited to elect them individually. characteristic, as a substitute director at the next meeting After the Shareholders’ Meeting has passed a resolution of the Board of Directors, unless the remaining term of to appoint a director, responsible agencies must register the office of the said director is less than two months. Such change of director, and/or report to related official agencies resolution by the Board of Directors shall require not less within a defined period of time. than three-quarters of the remaining directors’ votes for approval. The substitute director shall hold office only Appointment and Removal of Directors for the remaining term of the director whom he or she 1. The Bank’s shareholders shall appoint not less than replaces. 7 and not more than 18 directors, whereby not fewer than half of all directors shall reside in the Kingdom of Empowerment by the Board of Directors Thailand and not less than three-quarters of all directors The Chairman and the Vice Chairman may approve the shall be of Thai nationality. A director may or may not be empowerment of executive authority to the Bank’s Chief a shareholder. Directors shall be elected by the meeting Executive Officer or President to legally act on behalf of the of shareholders in accordance with the following rules and Bank in conducting transactions up to a limit of Baht 3,000 procedures: million per transaction. Either the Chief Executive Officer 1) Directors shall be elected individually. or the President may delegate this authority to a Bank 2) Each shareholder shall have one vote per share held. employee to act on behalf of the Bank within the limits of 3) Each shareholder shall use all of his/her votes in the each employee’s responsibility. For transactions over the election of directors. specified limit, the Board shall review and approve the limit of such transactions on a case-by-case basis.

206 ANNUAL REPORT 2007 Executive Authority of the Bank (1) Executive authority relating to human In addition to the aforementioned empowerment of resources executive authority, the Bank has also established a set of (2) Executive authority relating to criteria and plans for exercising internal executive authority. expenditures These principles help the Bank to delegate authority among (3) Executive authority to quote exchange rates employees in various positions, enabling them to perform and offer lower fees or interest rates to specific functions and make effective decisions with domestic and international businesses flexibility, but within the confines of an appropriate control (4) Executive authority to provide service to system. Internal executive authority is categorized into 3 customers in export-import businesses areas: (5) Executive authority of the Assets and 1. Executive authority shared by various departments Liabilities Management Sub-Committee 2. Departmental/office executive authority (6) Executive authority relating to credit 3. Branch executive authority approval and authority in debt restructuring 2) Departmental executive authority is the executive Principles authority delegated to a specific department The following are the main points of the structure and relative to its business activities and delegated content of the internal executive authority: to the management of that division or department, 1. The empowerment of executive authority is the as well as to individuals in various positions in delegation of the Chief Executive Officer’s and/or President’s the related department(s). authority to administer and execute various tasks within the 3) Branch executive authority is the authority Bank to the next lower level of management. delegated to branches relative to their business 2. The Chief Executive Officer and/or the President are activities, being delegated to network managers, assigned by the Board of Directors to approve the internal district managers and branch managers, as well executive authority and principles. as individuals in various positions in the branch. 3. Internal executive authority shall include: 5. The principles of executive authority are established 1) Executive authority involving approvals and and presented in tabular form to ensure that the management instructions that are intended toward financial and and staff at all operational levels understand and perform non-financial transactions for internal management their duties according to the delegated authority and risk within the department or unit according to the management limits. assigned duties. 2) Executive authority involving disbursements must Board of Directors’ Meetings be within the approved budget of the Bank. The Board of Directors schedules board meetings for 4. For complete control, executive authority is divided the last Thursday of every month. All board members are into categories according to their operational functions, as informed of the schedule of the meetings for the entire follows: year in advance at the beginning of each year. Additional 1) Executive authority shared among various meetings may also be held as deemed appropriate. departments refers to authority that is not assigned The Secretary to the Board shall arrange for notices of specifically to any one particular department, but board meetings, agendas and related documents containing may be specified according to the job performed complete information to be delivered to each director at by those employing such authority in various least 7 days in advance, except in urgent cases, to allow departments/units as follows: sufficient time for the Board to study the matters at hand. Each director is free to propose an issue as a meeting

ANNUAL REPORT 2007 207 agenda item. The agenda for board meetings shall be require compliance with established laws and regulations, categorized clearly into groups and include agenda items to as well as on other important business that, once undertaken, monitor the operations of the Bank on a regular basis. The may cause significant changes or impacts to, the Bank’s designation of the agenda must undergo the consideration of operations. the Chairman, the Chief Executive Officer and the President. During the meeting, the Chairman will allocate sufficient 5.3 Board Committees time for discussion and support directors in freely expressing The Board of Directors has appointed directors who have their opinions. Pertinent executives of the Bank shall be knowledge and skills suitable for membership on the Board invited to attend the meeting to provide related information Committees whose specific duties are to pre-screen and to directly acknowledge related policies to ensure matters that need detailed attention prior to proposal to effective implementation. Each agenda item and its resolution the Board of Directors. The Board Committees include the are completely recorded in writing, and the minutes of Audit Committee, the Corporate Governance Committee, the meeting - which have been affirmed by the Board the Human Resources and Remuneration Committee, together with related documents - are systematically filed and the Risk Management Committee. The Bank also has for examination and reference by the Board, or others concerned. established a Management Committee consisting of the Moreover, the Board has a policy of having non-executive Chief Executive Officer, the President and a number of directors conduct meeting sessions without the participation executives to manage and operate the Bank’s business as of executive directors to offer them the opportunity to discuss defined by the Board. In addition, certain directors have problems and evaluate the performance of the Chief Executive been appointed as Advisory Directors to the Management Officer and the President. The outcomes of such meetings Committee, with the duty of providing expert consultations shall be reported to the Chief Executive Officer and the President. as deemed appropriate by the Board. In 2007, the Board held a total of 13 board meetings Moreover, the Bank has appointed nine Sub-Committees and 1 meeting of non-executive directors. Details of each to consider and review the scope of work assigned to them. director’s attendance appears under the item of Meeting Attendance of Each Committee in 2007. 1. Audit Committee The Board of Directors approved the appointment of Advisers to the Board of Directors the Audit Committee in 1998, with the Committee having The Board of Directors appointed several qualified persons at least three independent members and each member to act as Advisers to the Board of Directors, including: having a 3-year term. At present, there are four members 1. Mr. Pirote Lamsam and at least one member has the specific knowledge, 2. Mr. Chaleo Yoovidhya understanding and experience in accounting and finance. 3. Mr. William Mark Evans The Audit Committee members are: 4. Dr. Tian Suning 1. M.R. Sarisdiguna Kitiyakara Chairman 2. Mr. Somchai Bulsook Member Responsibilities of the Advisers to the Board of Directors 3. Prof. Khunying Suchada Kiranandana Member Roles and responsibilities of the Advisers to the Board 4. Ms. Elizabeth Sam Member of Directors are to make recommendations to the Board The Committee holds at least six meetings a year and of Directors in matters that are relevant to and within the reviews operations regularly per its charter. In 2007, the authority and responsibilities of the Board of Directors. Committee held a total of eleven meetings and reported all These include, for example, the Bank’s policies, issues that meeting resolutions to the Board.

208 ANNUAL REPORT 2007 Responsibilities of the Audit Committee 11. Prepare the Audit Committee’s report for proposal The Audit Committee has duties and responsibilities to the Board of Directors after each meeting, and submit mandated in the Audit Committee Charter approved by the a yearly report signed by the Committee Chairman, Board of Directors, as follows: summarizing the activities of the Audit Committee, for inclusion 1. Review the Bank’s quarterly, semi-annual and annual in the Bank’s Annual Report. financial statements with the Bank’s Financial and Control 12. Consult with executives or outside experts concerning Division, as well as jointly review the findings with the matters or activities that the Board of Directors deems Bank’s external auditor. This ensures that the financial related to the Bank’s supervisory duties. statements accurately and reliably reflect the financial 13. Review its charter and the previous year’s performance status of the Bank, and comply with accounting standards, at least once a year, taking into account the assessments laws and standards related to the Bank. and opinions of the Chairman of the Board. 2. Review the effectiveness and adequacy of all risk management processes with the Bank’s Risk Management Unit, 2. Corporate Governance Committee in consultation with the Bank’s internal and external auditors. The Board of Directors approved the appointment of the 3. Oversee the review of the risk assets function to Corporate Governance Committee in 2002. Each member ensure efficiency and independence. has a 3-year term. The committee currently has three members, 4. Review the Bank’s operations to ensure that they are comprising two non-executive directors and one independent in compliance with the Securities and Exchange Act, the director as follows: Stock Exchange of Thailand regulations, as well as the 1. Pol. Gen. Pow Sarasin Chairman standards, or laws and regulations pertaining to the banking 2. Mr. Sukri Kaocharern Member business. 3. Mr. Chaisak Saeng-Xuto Member 5. Review the effectiveness and adequacy of the internal The Corporate Governance Committee holds at least four audit function and the internal control system through meetings each year. In 2007, the Corporate Governance discussions and evaluations of operational results with the Committee held five meetings and reported all meeting Bank’s internal and external auditors. resolutions to the Board of Directors. 6. Review the performance of the Bank’s external auditors, consider and make recommendations to the Board of Directors Responsibilities of the Corporate Governance Committee each year regarding the appointment of the external auditors The Corporate Governance Committee has duties and including the audit fees. responsibilities mandated in their Corporate Governance 7. Review connected transactions or any transaction that Committee Charter and approved by the Board of Directors: might imply a conflict of interest to ensure transparency and 1. Establish the principles and best practices for effective accuracy. corporate governance appropriate to the Bank. 8. Consider disclosures of information on connected 2. Develop and disseminate the principles and best transactions, or any transaction that might imply or seem practices of good corporate governance. to have a conflict of interest, or bears a significant impact 3. Formulate the Statement of Business Conduct and the on the Bank’s other operations, to ensure transparency and Code of Conduct for the Bank’s employees, and disseminate accuracy. these codes as practical guidelines to all concerned. 9. Oversee and handle complaints or information sent 4. Develop supervision plans for review of corporate by stakeholders to the Board of Directors. governance compliance. 10. Perform other duties assigned by the Board of Directors, 5. Review announcements concerning good corporate and as deemed appropriate by the Audit Committee. governance to summarize and present in the Bank’s reports.

ANNUAL REPORT 2007 209 6. Recommend ‘best practices’ to the Board of Directors to human resources policies for the Board of Directors’ and propose guidelines for inclusion in the Board of Directors approval, so that the proposals are aligned with the Bank’s Charter, as well as other Board Committee Charters. business strategies. 7. Recommend a Statement of Business Conduct to set 2. Ensure that a succession plan for senior management the tone of the Bank’s business practices, and a Code of in important positions and a list of candidates entitled to Conduct for the Bank’s management and personnel to follow. consideration are reviewed from time to time. 8. Review corporate governance guidelines and corporate 3. Review the remuneration strategy and propose governance in practice to ensure consistency and compatibility improvements for the Board’s endorsement, in order to with the Bank’s business. retain highly qualified personnel, as well as to review the 9. Review and propose public announcements related to salaries and benefits to senior management. corporate governance issues. 4. Establish the terms and conditions of the Chief 10. Review and report to the Board of Directors matters Executive Officer’s and the President’s employments related to corporate governance, give opinions on practical contracts, their remuneration, as well as to seek and guidelines and suggest improvements, as deemed appropriate. recommend qualified successors to the Chief Executive 11. Oversee good corporate governance at the Bank to Officer and the President, when necessary. ensure good corporate governance practice. 5. Review the composition, size, experience and remuneration of the Board of Directors, as well as provide 3. Human Resources and Remuneration Committee recommendations on the selection of candidates with The Board approved the appointment of the Human proper qualifications to the Board prior to further submittal Resources and Remuneration Committee in 2002. Each to the General Meeting of Shareholders for appointment. member has a 3-year term. The committee comprises at least three non-executive directors. At present, there are 4. Risk Management Committee three members; two of them are independent directors, The Board of Directors approved a change in the status including the Chairman of the Human Resources and of the former Internal Risk Management Sub-Committee Remuneration Committee, and one is a non-executive to the Risk Management Committee on April 29, 2004. director. They include: Each member has a 2-year term and the Committee 1. Dr. Schwin Dhammanungune Chairman must be comprised of at least 7 members. In 2007, the 2. M.R. Yongswasdi Kridakon Member committee was comprised of 11 members, two of whom 3. Mr. Chaisak Saeng-Xuto Member were executive directors, one was a non-executive director The Human Resources and Remuneration Committee and eight were Bank executives, namely: holds at least three meetings each year. In 2007, the Human 1. Mr. Banthoon Lamsam Chairman Resources and Remuneration Committee held five meetings 2. Dr. Prasarn Trairatvorakul Member and reported all meeting resolutions to the Board of Directors. 3. Ms. Sujitpan Lamsam Member 4. Dr. Piengchai Pookakupt Member Responsibilities of the Human Resources and 5. Mr. Boontuck Wungcharoen* Member Remuneration Committee 6. Mr. Sasawat Virapriya Member The Human Resources and Remuneration Committee 7. Mr. Teeranun Srihong Member has duties and responsibilities mandated to them in the 8. Mr. Krisada Lamsam Member Human Resources and Remuneration Committee Charter 9. Mr. Surasak Dudsdeemaytha Member approved by the Board of Directors: 10. Mr. Chartchai Sundharagiati Member 1. Review and make recommendations on the proposals 11. Mr. Prasopsuk Damrongchietanon Member of the Chief Executive Officer and/or the President relating * Mr. Boontuck Wungcharoen resigned from the Bank, effective January 1, 2008

210 ANNUAL REPORT 2007 The Risk Management Committee meets at least once appointment of the Advisory Directors to the Management each month. In 2007, the Risk Management Committee Committee. At present, the committee is comprised of five held 13 meetings and reported to the Board of Directors members, namely: according to the assigned duties. The committee ensures 1. Mr. Banyong Lamsam that the Bank has an effective risk management system 2. Pol. Gen. Pow Sarasin for early warning, and sets measures to prevent and 3. Mr. Sukri Kaocharern manage risks, including risks that affect operations. 4. M.R. Yongswasdi Kridakon They also oversee compliance with risk management 5. Dr. Abhijai Chandrasen practices according to relevant policies, and prepare a risk management report. Responsibilities of the Advisory Directors to the Management Committee Responsibilities of the Risk Management Committee 1. Give recommendations to the Management Committee, The Risk Management Committee has duties and as the Board of Directors deems appropriate. responsibilities as mandated in the Risk Management 2. Ensure efficiency in the Bank’s management and Committee Charter approved by the Board of Directors, operations. including: 1. Possess the authority to make decisions on related 6. Management Committee undertakings within the scope of its responsibility, as The Board of Directors and the 88th Annual General stipulated in the Risk Management Committee Charter, Meeting of Shareholders, on April 4, 2000, approved the with the authority to access to all pertinent information. appointment of the Management Committee. In 2007, the 2. Formulate the KASIKORNBANK FINANCIAL committee was comprised of eight members, namely: CONGLOMERATE risk management policy to present to the 1. Mr. Banthoon Lamsam Chairman Board of Directors for consideration of overall risk management. 2. Dr. Prasarn Trairatvorakul Member The policy must cover the various risks associated with 3. Dr. Piengchai Pookakupt Member strategies, liquidity, credit, markets, operations or other 4. Mr. Boontuck Wungcharoen* Member significant types of risk to the financial conglomerate. 5. Mr. Somkiat Sirichatchai Member 3. Formulate strategies for the organization and resources 6. Mr. Krisada Lamsam Member in risk management to conform to the risk management policy 7. Mr. Teeranun Srihong Member of KASIKORNBANK FINANCIAL CONGLOMERATE. The 8. Mr. Sasawat Virapriya Member strategies must enable the effective analysis, assessment, * Mr. Boontuck Wungcharoen resigned from the Bank, evaluation, and monitoring of risk management. effective January 1, 2008 4. Define maximum credit lines according to the Bank’s defined risk limits and propose to the Board of Directors for The Management Committee meets weekly. In 2007, the consideration. Management Committee held 49 meetings and reported all 5. Oversee, review and provide recommendations to meeting resolutions to the Board of Directors. the Board of Directors with regard to the risk management policy, standard practices, strategies and an overall risk Responsibilities of the Management Committee measurement to ensure that the risk management strategy The Management Committee has duties and responsibilities is properly implemented. as mandated in the Management Committee Charter, approved by the Board of Directors, as follows: 5. Advisory Directors to the Management Committee 1. Manage and undertake the Bank’s business as assigned The Board of Directors and the 88th Annual General by the Board of Directors, or by specific resolutions of the Meeting of Shareholders on April 4, 2000, approved the Board of Directors.

ANNUAL REPORT 2007 211 2. Manage the Bank’s business according to established 8) Monitor and report on the Bank’s operating results policies and plans. to the Board of Directors as well as on other work 3. Take actions in accordance with the authority delegated in progress to achieve the Bank’s objectives. to them by the Board of Directors, and per their mandated 9) Monitor the performance of employees at all levels management jurisdiction over the Bank. with regard to risk management, per the Bank’s 4. The Chairman of the Management Committee shall guidelines, including the effectiveness of internal submit the minutes of the Management Committee meetings control systems, and the operational compliance to the Board of Directors for acknowledgement. However, with the law, regulations and related policies. policy-related issues, or issues likely to have significant 10) Review new projects and products prior to being impact on the Bank’s business, or issues requiring action submitted to the Board of Directors for by the Board of Directors in compliance with laws, or the consideration and approval. Bank’s Articles of Association, must first be approved by 11) Communicate with external stakeholders, as per the Board of Directors. This also includes issues that the designated authority, and as deemed appropriate. Management Committee considers appropriate to seek the approval of the Board of Directors on a case-by-case Selection of Management basis, or per the criteria designated by the Board of Directors. The Management Committee is responsible for reviewing 5. Undertake activities as assigned in order to achieve qualified candidates to be appointed to the Bank’s management the Bank’s targets, including: at the level of First Senior Vice President and above, to 1) Preparation and review of strategic objectives, submit chosen candidates to the Human Resources and financial plans and key policies of the Bank, to be Remuneration Committee, followed by presentation to the submitted to the Board of Directors for approval. Board of Directors for approval. As for the appointment of 2) Consideration of the annual business plans, lower ranking management positions, the division heads capital expenditures, performance targets, and and the Human Resource Management Department shall other initiatives to achieve the Bank’s targets, prepare qualified candidates to be nominated and approved including projects with capital expenditures in by the President, or the Chief Executive Officer. excess of budgets designated by the Board of Directors, to be submitted to the Board of 7. The Sub-Committees Directors for approval. The responsibilities of the Sub-Committees are to 3) Consideration and approval of various issues review and manage various matters within the Bank to under their legitimate authority, or as delegated ensure accuracy, propriety, efficiency and the highest by the Board of Directors. effectiveness of the Bank. 4) Review of management authority in various The Bank has reviewed and approved the establishment aspects stipulated in the approval authority of nine Sub-Committees, namely: hierarchy, to be submitted for approval to the 1. Information Technology Sub-Committee Board of Directors. 2. Assets and Liabilities Management Sub-Committee 5) Manage and ensure balance between short-term 3. Corporate and Medium Business Debt Recovering and long-term objectives. and Restructuring Sub-Committee 6) Develop and ensure that the human resources 4. Retail and SME Debt Recovery and Restructuring initiatives are in line with the human resources Sub-Committee roadmap and strategies approved by the Human 5. Foreclosed Property Management Sub-Committee Resources and Remuneration Committee. 6. Information Infrastructure Sub-Committee 7) Appoint, monitor and evaluate the performance 7. Product Pricing Sub-Committee of employees from the level of department 8. Retail and Sales Network Pricing Sub-Committee head down to middle managers, including the 9. Credit Policy Sub-Committee recruitment of successors.

212 ANNUAL REPORT 2007 Meeting Attendance of Each Committee in 2007 Board Non-Executive Corporate Risk Audit Human of Directors Directors Governance Management Committee Resources and Committee Committee Remuneration Board Members Committee (Total (Total (Total (Total (Total (Total 13 meetings) 1 meeting) 5 meetings) 13 meetings) 11 meetings) 5 meetings) Mr. Banyong Lamsam 13 1 Pol. Gen. Pow Sarasin 12 1 5 Mr. Banthoon Lamsam 13 8 Dr. Prasarn Trairatvorakul 13 12 Mr. Sukri Kaocharern 13 1 5 M.R. Sarisdiguna Kitiyakara 13 1 11 M.R. Yongswasdi Kridakon 11 1 4 Mr. Somchai Bulsook 13 1 11 Ms. Sujitpan Lamsam 13 1 10 Prof. Khunying Suchada 10 1 9 Kiranandana Mr. Charles L. Coltman, III 13 1 Dr. Abhijai Chandrasen 13 1 Ms. Elizabeth Sam 12 1 10 Mr. Chaisak Saeng-Xuto 13 1 5 5 Dr. Schwin Dhammanungune 13 1 5 Prof. Dr. Pairash 6 1 Thajchayapong* Remarks: * Appointed on June 28, 2007 • The number of members of each committee The Board of Directors 16 members (As of December 31, 2007) Corporate Governance Committee 3 members Risk Management Committee 11 members (includes 3 Board members) Audit Committee 4 members Human Resources and Remuneration Committee 3 members • Details of meeting attendance through teleconferencing systems of each committee The Board of Directors Mr. Banthoon Lamsam 1 meeting Ms. Sujitpan Lamsam 6 meetings Mr. Charles L. Coltman, III 10 meetings Ms. Elizabeth Sam 4 meetings Non-Executive Directors Ms. Sujitpan Lamsam 1 meeting Mr. Charles L. Coltman, III 1 meeting Risk Management Committee Ms. Sujitpan Lamsam 8 meetings Audit Committee Ms. Elizabeth Sam 9 meetings Prof. Khunying Suchada Kiranandana 1 meeting • Three Board members: Mr. Charles L. Coltman, III, Ms. Elizabeth Sam and Ms. Sujitpan Lamsam do not reside in Thailand. ANNUAL REPORT 2007 213 The Board of Directors is comprised of persons who The content of the Bank’s Statement of Corporate have knowledge, ability and working experience. The Board Governance Principles covers the structure, composition, approves the vision, mission, and core values as well as roles, duties and responsibilities of the Board of Directors strategic directions and policies, reviews the annual business and all Board Committees, as well as matters of risk plan and budget, and oversees the Bank’s management in management, internal control systems, inside information effectively carrying out actions that are in line with the designated policies, and issues that are likely to involve conflicts of policies and business plans, and are in accordance with the interest and shareholder relationships. (Details on the rules and regulatory requirements of related government Statement of Corporate Governance Principles are available agencies and the resolutions of shareholders’ meetings. at www.kasikornbankgroup.com). The Board of Directors’ decisions are independent, in order The Corporate Governance Policy covers the Bank’s to ensure that the Bank and its stakeholders receive the mission, core values, vision, Statement of Business Conduct maximum benefit that increases economic value of the Bank. and the employees’ Code of Conduct. This includes the Moreover, the Board of Directors ensures the existence protection of the legitimate rights of shareholders, who of an effective internal control system and appropriate are encouraged to exercise their rights, and reflected in risk management framework and cooperates with the Bank’s operational guidelines and directions adopted internally management in business undertakings in order to attain that assure that the Bank has adequately followed the the best results. Current and future risks are taken into best practices in corporate governance. In 2007, the Bank consideration, in conformity with the Bank’s vision, mission, assessed and reviewed the results from operations, according Statement of Business Conduct and Statement of Corporate to the Corporate Governance Policy. Moreover, the Bank Governance Principles. published a booklet of KGroup Corporate Governance that compiles important content and operational guidelines for Corporate Governance Policy enhancing corporate governance, and disseminated it to all KASIKORNBANK places great importance on good groups of stakeholders. corporate governance, which is held as essential in sustaining All members of the Board of Directors are aware of their the Bank’s business undertakings. The Statement of Corporate mutual responsibilities for sustaining the highest benefit Governance Principles has been revised and approved by to the Bank, and their roles in supervising information the Board of Directors of the Bank. The same principles have disclosure, transparency in business undertakings and been applied to the KASIKORNBANKGROUP, as well. The the decision-making process, and fair treatment to all principles, in writing, have been aimed primarily at stakeholders. In addition, the Bank places great importance communicating to all employees, shareholders and other on fairness in every business undertaking, as well as stakeholders the ultimate goal of the Board of Directors to act participation in social development and environmental in accordance with the seven major components of corporate protection. The Bank and its employees have to strictly governance, consisting of the following: adhere to the Code of Conduct in performing their duties • Integrity under the CSR principles. The Bank has also been • Transparency enthusiastically participating in and promoting environmental • Independence protection and social development projects, in recognition • Responsibility of the importance of the need for improvement in the • Accountability quality of life of individuals and the community at large, as • Fairness well as to benefit all stakeholders. • Social Responsibility In 2007, the Bank’s activities that promoted Corporate Governance were as follows:

214 ANNUAL REPORT 2007 • The Bank circulated the Code of Conduct to all Business Ethics employees for their acknowledgement. The Board of Directors has promoted the establishment • The Statement of Corporate Governance Principles of a Statement of Business Conduct and a Code of Conduct and Code of Conduct were two main issues in every for directors and employees. All directors, executives orientation program for newly recruited personnel. and employees share common goals in carrying out their • Actions in compliance with the Code and the designated duties and responsibilities to the Bank and its Statement of Corporate Governance Principles were stakeholders. They perform their duties with integrity, disseminated to employees by e-mail. in compliance with the law and the Bank’s Articles of • Actions in compliance with the Bank’s Corporate Association, based on professional standards and a Governance principles were disseminated to directors, business approach that is transparent, honest and fair, employees and customers via the KConnect for the development of the organization towards attaining magazine. international standards. The Statement of Business Conduct • Actions that comply with the Code were promoted and the Code of Conduct have been disseminated via the through the KBank closed-circuit TV programs - also Bank’s website and the central database. known as KASIKORNTV - in order to promote general The Bank’s Statement of Business Conduct includes: understanding of actions stipulated in the Statement 1. Aim to satisfy customers by offering quality products of Corporate Governance Principles. and excellent services. • Activities pertaining to the Statement of Corporate 2. Continually strive for superior performance. Governance Principles and the Code of Conduct 3. KBank’s employees are valuable assets. The Bank were organized through the Bank’s newsletter seeks and recruits people with skill and experience, (KASIKORN Newsletter) circulated within the Bank, continually develops human resources and offers in the form of articles and descriptions. remuneration comparable to other leading companies. • Activities were organized through the electronic networks 4. Perform as a good corporate citizen, conduct business of KBank on the “Welcome Page”, to disseminate with impartiality and contribute to social development information on the Statement of Business Conduct and environmental preservation. and the Statement of Corporate Government Principles, 5. Believe in being fair to all. 6. Believe in strong ethical standards and be determined and a weekly column concerning the Bank’s Codes, to carry out business with integrity. including the “Quotes of the Week” article concerning 7. Protect customer confidentiality and maintain the Code of Conduct. customer trust using professional standards. • Criteria for the use of inside information related to securities 8. Be dedicated to carrying out responsibilities in a trading were disseminated to directors and employees. professional manner and strive to achieve excellent • Permitted and forbidden actions relating to the acceptance results by integrating modern approaches and of gifts in compliance with the Code of Conduct were technological advances. disseminated to all employees. 9. Respect the equal rights of all stakeholders. • Self-assessments of knowledge pertaining to the 10. Be committed to discipline in business execution and Statement of Corporate Governance Principles were make certain that all business decisions and operations disseminated to employees through an electronic system. conform to related laws and regulations by pursuing This included a checklist for actions in compliance with the Statement of Business Conduct of the Bank and the principles in order to collect useful data for supervising Code of Conduct of the workforce. appropriate and effective actions in compliance with the Statement of Corporate Governance Principles.

ANNUAL REPORT 2007 215 Significant content in the Code of Conduct includes: be in compliance with standards of good governance. This 1) the key principles and core values of the Bank; 2) the is one of the key components of corporate governance policy observance of laws and the Bank’s regulations; 3) the that the Board of Directors and the Bank’s employees must maintenance of good relations with customers; 4) the strictly comply with to earn the trust of all stakeholders. The maintenance of good relations with society; 5) the followings are the essence of these principles: maintenance of good relations with employees; 6) an • The Board of Directors has established policies and advertising and public relations policy; 7) the confidentiality regulations to prevent conflicts of interest as well as guidelines of information; 8) the completeness and accuracy of the to consider appropriateness in the execution of transactions Bank’s information; 9) the avoidance of the use of inside that must undergo the scrutiny of the Audit Committee, and information in securities trading; 10) the prevention of ensure compliance with the criteria of the Stock Exchange of conflicts of interest; 11) the abstention from bribes and Thailand, the Office of the Securities and Exchange Commission inappropriate incentives; 12) the non-involvement in and the Bank of Thailand. political activities; 13) the avoidance of accepting or • To prevent conflict of interest, directors, staff and offering inappropriate gifts and/or benefits; and, 14) the related personnel who directly or indirectly receive benefits report on employees’ violations of the Code of Conduct. from transactions made with the Bank, are forbidden to In this Code of Conduct, the Bank has designated the take part in the approval of such transactions. The pricing basic principles concerning the execution of duties and of the transaction must be properly defined in a manner compliance with professional standards by directors and consistent with the normal course of business transaction employees. The details of the Code of Conduct can be offered to general customers. viewed on the Bank’s website. • Connected transactions required in the course of Moreover, the Bank identifies important rules and practical business must be submitted to the Audit Committee for guidelines that are in accordance with the Code of Conduct, consideration before further submission to the Board of which are detailed and disseminated to employees. The Bank Directors for approval, according to the Statement of also supports the practical implementation of the Code of Corporate Governance Principles and the criteria stipulated Conduct throughout KASIKORNBANKGROUP, and has by the Stock Exchange of Thailand. designated regulations that are consistent with business and • For investment in or loan approvals to businesses that compliance responsibilities. the Bank, the directors, or the Bank’s senior management Also, the Bank has established a compliance unit to hold shares or have interest in, such transactions may monitor and evaluate the effectiveness of employees’ proceed only upon the unanimous approval of a Board actions, as stated in the Code of Conduct. In addition, certain meeting, but without the attendance or vote of the involved activities have been launched to promote ethical behavior, directors, high-level executives or any related persons who within a culture of good corporate governance. Best practices may be affected by such approvals. The amount of the loan and actions in line with the Code of Conduct are regularly must not exceed a reasonable amount and special terms and efficiently disseminated to all employees. These activities or conditions may not be permitted, as prescribed by the have also been reported to the Corporate Governance Bank of Thailand. Committee for acknowledgement. • Directors, executives and related persons are required to disclose their shareholding information in businesses, Conflict of Interest Prevention their directorship or their authority to manage or control To encourage good governance and meet targets related major votes in the shareholders’ meeting, including the right to its implementation, the Bank has initiated guidelines to to control the election and removal of directors. The disclosure control, supervise and prevent transactions that may involve must also include the assignment of any other person to be conflicts of interest, or connected or related transactions to the nominee of their shareholding or management, or

216 ANNUAL REPORT 2007 the authority to control businesses in the Bank’s database, Internal Control and Auditing Systems which is under the responsibility of the Information The Board of Directors and the Bank’s management Management Department that has the responsibility to have placed particular emphasis on an efficient internal update the information regularly for use by the Credit Policy control system and promotion of an appropriate business Department. The monitoring and control of credit extensions culture recognizing the importance of risk management and and investment must follow the rules of concerned regulatory the adequacy of the internal control system in every business agencies. Information on the benefits of directors, executives undertaking. The Bank requires all units to comply with or related persons must be reported to the Board of Directors the best practice for internal control as a guideline for the when the transaction between the Bank and the person Bank’s business operations and in employees’ practices. related to the Bank’s director and executives is brought The Bank also set up a risk management unit and into consideration, for at least 7 days before the Board of established a clear risk management policy. The Audit Director’s Meeting. Committee has the duty and responsibility to review the • The Bank has disclosed details of any related or effectiveness and adequacy of all risk management connected transactions that may involve a conflict of interest processes and internal control systems by discussing and according to the Stock Exchange of Thailand and the Office evaluating operational results with the Compliance and of the Securities and Exchange Commission criteria in the Audit Division on a continuing basis. These discussions Annual Reporting Form (56-1 Reporting Form), as well as in include the consideration of the appropriateness of the the Bank’s Annual Report and other reports in which it is scope of work, roles and responsibilities, audit plans, audit appropriate to declare such activities. This also includes conclusions with regard to the adequacy and effectiveness disclosures of information on related transactions according of the internal control system, as well as the monitoring of to the Stock Exchange of Thailand regulations, as well as compliance with the Bank’s Articles of Association and the disclosures of connected transactions of the Bank according laws and regulations. Major recommendations or material to the recognized accounting standards and the rules of the deficiencies must be reported to the Board of Directors in a Bank of Thailand. Disclosures of related transactions are timely manner for effective action. shown in the Notes to Financial Statements, under ‘Related Written policies and operational procedures, training Party Transactions’. The Bank has used the same criteria and orientation programs, an operational manual providing as is used with other general customers to consider related information on rules and regulations, a professional transactions in accordance with defined procedures Code of Conduct, and standardized disciplinary actions necessary to support the Bank’s business operations, and for serious offenses have been established to ensure a in a manner consistent with the Bank’s strategies in the best common understanding as well as capabilities that will lead interests of shareholders. The Audit Committee deemed to efficient, transparent and fair operations for the benefit the consideration of related transactions by the Bank in of all stakeholders. A regular self-assessment program is 2007 as just and rational. Details of related transactions conducted within all business divisions to promote a good were disclosed via various channels according to the Stock control environment. Exchange of Thailand regulations. • Reviews of connected transactions were carried out in accordance with the audit plan that is subject to report to the Audit Committee. Should the Bank become involved in any related transactions, directors and employees must follow the above policies in accordance with the official regulations.

ANNUAL REPORT 2007 217 Control activities are an integral part of day-to-day or damage to the Bank’s assets and its reputation. The operations. Appropriate segregation of duties is embedded Bank, therefore, monitors the effectiveness of the internal to create a proper ‘check-and-balance’ system for operating control system, through regular operations and periodic staff, supervisors and performance assessment. Potential assessment. Any detected irregularities will be immediately conflicts of interest are identified and subjected to careful reported to responsible managers, and any significant independent monitoring, in accordance with regulatory findings will be reported to the Board of Directors and requirements and the Bank’s regulations. senior management. IT database systems have continuously been upgraded to provide accurate, up to date, and complete information Risk Management for timely decision-making by the management and the The Risk Management Committee is responsible for Board of Directors. Systems include the financial data designating risk management policies that cover the entire system, operational and compliance databases to monitor organization under the guidelines identified by the Board of the effectiveness of the internal control system for prompt Directors to whom the results must be reported regularly. corrective action against significant deficiencies. The Bank The Bank has outlined the risk management process, of also provides effective communication channels to ensure which key steps include risk identification, assessment, that all employees understand and adhere to the policies monitoring and control, and reporting. Moreover, the and procedures affecting their duties and responsibilities. Bank places significance on the early warning of irregular The audit function and monitoring of the operation of transactions as well as regularly reviewing the sufficiency KASIKORNBANK FINANCIAL CONGLOMERATE are of the risk management system and its effectiveness. The carried out by the Compliance and Audit Division, which details of risk management are disclosed in the section is independent in its operation and reports directly to the entitled Risk Management and Risk Factors. Audit Committee. The risk criteria used is in conformity with the objectives of the Bank and the audited units and Appointment of External Auditors and Consideration of also covers compliance to regulatory agencies, the Bank’s Audit Fees operational procedures and the Statement of Business The Audit Committee considers the qualifications and Conduct, as well as an assessment on the adequacy performances of external auditors for recommendation and effectiveness of the risk management and internal to the Board of Directors for their annual appointment, control system, the efficiency of resource management, and the proposed audit fees for further consideration and and the accuracy and reliability of information. Moreover, approval by the General Meeting of Shareholders. The list the Compliance and Audit Division provides advisory of external auditors to be proposed as the Bank’s auditors services to the audited units being monitored, according must also be approved by the Bank of Thailand. to the scope of their work and characteristics, with the In 2007, the remuneration for external auditors included: objective of increasing value and improving the operation 1. Audit Fees: of KASIKORNBANK FINANCIAL CONGLOMERATE. The Bank and subsidiary companies have paid audit The Bank is aware that a system of effective internal fees to: controls is a critical component of the Bank’s management • Auditors of the Bank, totaling Baht 13,350,000 in the and a foundation for the ‘safe and sound’ operations of past accounting year. the Bank. These features help to ensure that the goals • The respective audit company including individuals or and objectives of the Bank will be met, that the Bank will business entities related to the auditors and the respective achieve long-term profitability, and will maintain reliable audit company, totaling Baht 5,935,000 in the past financial and managerial reporting. Such a system can accounting year. also help to ensure that the Bank will comply with laws 2. Non-Audit Fees: and regulations as well as policies, plans, internal rules The Bank and subsidiary companies have paid non- and procedures, and prevent the risk of unexpected losses regular auditing fees, i.e., special purpose audit fees, asset

218 ANNUAL REPORT 2007 valuations and consulting services which are under the performance assessment in the Board of Directors Engagement to Perform Agreed-Upon Procedures, but Charter. The Chairman of the Human Resources and irrelevant to auditing and other work performed per Remuneration Committee then submits the Board’s agreement to: assessment results, together with their opinion to the • Auditors of the Bank totaling Baht 760,000 over the Chief Executive Officer and the President. past accounting year, together with future payments of Baht -0-, due on incomplete work in the past accounting year. 5.6 Remuneration to Directors and Executives • The respective audit companies or their independent The Bank has established a set of well-defined and contracted auditors, including individuals or business entities transparent remuneration policies for directors. The Human related to the auditors and their respective audit companies, Resources and Remuneration Committee is responsible for totaling Baht 1,200,000 over the past accounting year, reviewing these policies by taking into consideration the together with future payments of Baht -0-, due on the appropriateness of remuneration with respect to the incomplete work in the past accounting year. obligations and responsibilities of each director and the Bank’s financial status, to ensure that the Bank’s 5.5 Self-Assessment by the Board of Directors remuneration is comparable to other commercial banks. The Bank has established an annual self-assessment The remuneration to the executives is paid according plan for the Bank’s Board of Directors. It serves as a tool for to the policies and criteria set by the Board of Directors. reviewing performance, as well as issues and obstacles It is tied directly to the performance of the Bank and the facing each director over the past year. It also helps increase performance of each individual. The Human Resources and the operational effectiveness of the Board. Performance Remuneration Committee shall propose remuneration to assessment of the Board of Directors is conducted in two the Board of Directors for consideration. ways: the performance assessment of the Board of Directors The Annual General Meeting of Shareholders No. 95, and the performance assessment of each individual director. on April 5, 2007, has approved the directors’ remuneration To facilitate this, the Bank has developed an assessment and bonuses. A director who is also a member of other form consistent with the Statement of Corporate Governance board committees shall receive additional remuneration Principles, as well as the duties and responsibilities stated according to the increased responsibilities at the same in the Board of Directors Charter. The Board of Directors rate as the 2006 compensation. Details of remuneration to conducts self-assessments once a year and the assessment directors and executives are shown in the following: results are then analyzed and evaluated to indicate the level 1. Remuneration of achievement of objectives for self-assessment by the 1) Remuneration for directors: In 2007, 17 directors Board of Directors, as established by Bank regulations. received remuneration for directors, for Advisory The self-assessment process is also applied to four Directors to the Management Committee, Audit board committees-the Audit, Corporate Governance, Committee, Corporate Governance Committee, Human Resources and Remuneration and Risk Management Human Resources and Remuneration Committee, committees. The assessment results are presented to the and as legal adviser, together with a bonus at the Chairman of the Board, for consideration. rate of 0.5 percent of the dividend, totaling Baht Both the Chief Executive Officer and the President also 57,396,310. have to undergo self-assessments in order to compare their 2) Remuneration for Advisers to the Board of actual performance with the Bank’s targets and the annual Directors totaled Baht 1,689,600. business plan they jointly created. The Human Resources 3) Remuneration for executives: In 2007, executives and Remuneration Committee is responsible for submitting in the position of Executive Vice Presidents and the assessment results to the Board of Directors for higher, totaling 9 persons, received remuneration consideration. The self-assessment of the Chief Executive including salaries, living expenses and bonuses Officer and the President is specified as part of their from the Bank totaling Baht 128,711,900.

ANNUAL REPORT 2007 219 Remuneration for Directors in 2007 Mr. Banyong Lamsam Received remuneration as Chairman and an advisory director to the Management Committee, totaling Baht 7,128,000, plus a bonus of Baht 2,480,730. Pol. Gen. Pow Sarasin Received remuneration as Vice Chairman and an advisory director to the Management Committee, totaling Baht 5,322,000; and as Chairman of the Corporate Governance Committee amounting to Baht 396,000, and a bonus of Baht 1,860,545. Mr. Banthoon Lamsam Received remuneration as a director, totaling Baht 924,000, and a bonus of Baht 1,240,360. Dr. Prasarn Trairatvorakul Received remuneration as a director, totaling Baht 924,000, and a bonus of Baht 1,240,360. Mr. Sukri Kaocharern Received remuneration as a director and an advisory director to the Management Committee, totaling Baht 2,124,000; and as a member of the Corporate Governance Committee amounting to Baht 264,000, and a bonus of Baht 1,240,360. M.R. Sarisdiguna Kitiyakara Received remuneration as a director, totaling Baht 924,000; and as Chairman of the Audit Committee, amounting to Baht 792,000, plus a bonus of Baht 1,240,360. M.R. Yongswasdi Kridakon Received remuneration as a director and an advisory director to the Management Committee, totaling Baht 2,724,000; and as a member of the Human Resources and Remuneration Committee amounting to Baht 264,000, plus a bonus of Baht 1,240,360. Mr. Somchai Bulsook Received remuneration as a director, totaling Baht 924,000; and as a member of the Audit Committee amounting to Baht 660,000, plus a bonus of Baht 1,240,360. Ms. Sujitpan Lamsam Received remuneration as a director, totaling Baht 924,000, plus a bonus of Baht 1,240,360.

220 ANNUAL REPORT 2007 Prof. Khunying Suchada Kiranandana Received remuneration as a director, totaling Baht 924,000 and as a member of the Audit Committee amounting to Baht 660,000, plus a bonus of Baht 1,240,360.

Prof. Dr. Yongyuth Yuthavong (1) Received a bonus of Baht 426,355. Mr. Charles L. Coltman, III Received remuneration as a director, totaling Baht 924,000, plus a bonus of Baht 1,240,360. Dr. Abhijai Chandrasen Received remuneration as a director and legal adviser totaling Baht 4,884,000, plus a bonus of Baht 1,240,360. Ms. Elizabeth Sam Received remuneration as a director, totaling Baht 924,000; and as a member of the Audit Committee amounting to Baht 660,000, plus a bonus of Baht 1,240,360. Mr. Chaisak Saeng-Xuto Received remuneration as a director, totaling Baht 924,000; as a member of the Human Resources and Remuneration Committee of Baht 264,000, and as a member of the Corporate Governance Committee amounting to Baht 264,000, plus a bonus of Baht 1,240,360. Dr. Schwin Dhammanungune Received remuneration as a director, totaling Baht 924,000 and as Chairman of the Human Resources and Remuneration Committee amounting to Baht 396,000, plus a bonus of Baht 1,240,360.

Prof. Dr. Pairash Thajchayapong (2) Received remuneration as a director, totaling Baht 462,000.

Remarks : (1) Prof. Dr. Yongyuth Yuthavong resigned from the position of director on October 8, 2006 and received a bonus from dividend payment for the 2H06 operating results during his term in office. (2) Prof. Dr. Pairash Thajchayapong was appointed as director on June 28, 2007.

ANNUAL REPORT 2007 221 2. Other remuneration Furthermore, the Bank contributed Baht 3,402,000 1) Remuneration for directors: none to the provident funds for the Bank’s executives in the 2) Remuneration for advisers to the Board of positions of Executive Vice President and higher, totaling Directors: none 9 persons in 2007. 3) Remuneration for executives: the Extraordinary Meeting of Shareholders No. 1/1999 approved 5.7 Professional Development for Directors and the offering and issuance of 50 million units of Executives warrants to the Bank’s employees (excluding To enhance the operational efficiency of the Board of directors) in 3 phases of the Employee Stock Directors, the Bank has a policy of supporting directors, Option program (ESOP). The shareholders’ executives and officers performing duties related to delegates or other persons delegated by them corporate governance, in attending seminars and training shall allocate these warrants to employees by courses at the Thai Institute of Directors (IOD), when it is taking into consideration the competency and indicated to be useful to their functions, as well as training potential of each employee. at the Stock Exchange of Thailand and other independent The warrants are non-transferable subscription certificates institutions. The aim is to continuously improve their performance, offered at Baht 0 (zero) per unit. Each warrant can be which will further benefit the Bank’s business operations. exercised to purchase one common share (Baht 10 par) The Bank has organized orientations for new directors, at a price of Baht 30. The Bank received approval by the to provide them with information on their roles and Annual General Meeting of Shareholders to offer 18.5 responsibilities, as well as information related to the Bank, million units in Phase 1, 5 million warrant units in Phase 2, clarifications on legal obligations, regulations related to the of which a total of 12,848,720 units and 2,911,580 units of directorship of a listed company, regulations related to the warrants were exercised, respectively. Board Committees’ charters, the Bank’s core policies and In Phase 3, the Bank was approved to offer 26.5 million the manual for financial institution directors, as an overall warrants, of which 26,490,560 units were allocated to employees process to promote understanding among directors about in December 2002. The first exercise date was December their roles and the Bank’s business operations. 30, 2003, and the last exercise date was December 30, 2007. In addition, the Board of Directors has approved an For Phase 3, the terms and conditions were revised to comply executive development plan and a succession plan for the with a resolution of the Annual General Meeting of Shareholders positions of Chief Executive Officer, President and senior No. 90 on April 3, 2002, as follows: executives. A list of persons qualified for these positions is 1. Adjustment of the exercise price from Baht 30 per reviewed regularly. share to a weighted average price from the last 5 trading days before the offering date, which was then equal to Baht 27.82 per share; 2. Adjustment of the warrant exercise dates from twice a year to four times a year. Exercise dates shall be the last business day of March, June, September and December, until the expiration of each warrant. The Bank’s executives received allocations of warrants in the ratio of 11.28 percent of the total number of warrants allocated in Phase 3. As of December 31, 2007, the total number of exercised warrants was 40,165,476 units, with 24,405,176 units for Phase 3.

222 ANNUAL REPORT 2007 DIVIDEND POLICY

• The Bank’s Dividend Policy • The Dividend Policies of Subsidiaries The Bank will take into account operating results The Bank has not fixed a dividend payment ratio for our and long-term returns for shareholders in paying dividend. subsidiaries. Their dividend payments shall depend on the Dividend payments will be in accordance with Article 32 operating results of each company. of KBank’s Articles of Association, stating that no dividend Dividend payments of subsidiaries to the Bank must be shall be paid out of any money, other than profits. In the made in accordance with each company’s regulations on event that the Bank still has an accumulated loss, no dividend payments that must be approved by a resolution dividend shall be paid. of their general meetings of shareholders. Interim dividend Dividend is divided equally according to number of payments are allowed. In paying dividend, subsidiary outstanding shares, and dividend payments must be companies must record some profit. If there is an operating approved by a shareholders’ meeting. The Board may loss, dividend payments are barred until such losses approve interim dividend payments to shareholders if the are recovered. In addition, at least one-twentieth (1/20) Bank has sustained a profit. For interim dividend payments, of all profits must be set aside as provisioning reserves the Board will inform the next shareholders’ meeting of any until provisioning reserves reach one-tenth (1/10) of a actions taken. company’s total capital. Dividend payments must also be in compliance with the statutory requirements, i.e., payments of dividend or other benefits shall not be made to any direct or indirect shareholders of the Bank where the shares held are in excess of the statutory limits. The Bank of Thailand (BOT) Notification, Re: ‘Worthless or Irrecoverable Assets and Doubtful Assets which may be Worthless or Irrecoverable Assets of Commercial Banks’ states that if worthless or irrecoverable assets are not written off, or full provisioning on doubtful assets that may be worthless or irrecoverable has not yet been set aside, banks cannot pay dividend or other benefits to shareholders. Payments of dividend must also be in accordance with the BOT Directive, BOT. FPG. (31)c 1729/2546, Re: ‘Dividend Policy of Commercial Banks, dated July 28, 2003’; regulating that banks may not use unrealized profits or unrealized cashflow receivables for dividend payments. Gains derived from non-material liquidation of assets that cause banks to post higher profits or lower losses than usual should also not be used for dividend payments.

ANNUAL REPORT 2007 223 Corporate Social Responsibility Activities

The opening ceremony of a seminar entitled “Developing the Power of Youth: HRH Princess Maha Chakri Sirindhorn painting a picture at the Building a Common Foundation of Quality for the Future” opening ceremony’s painting contest

As a financial institution operating under the Statement of • Seminar on “Developing the Power of Youth: Building Good Corporate Governance Principles, KASIKORNBANK a Common Foundation of Quality for the Future” (KBank) has strictly adhered to the Statement of Business KBank in cooperation with the Office of Her Royal Conduct, while remaining accountable to the betterment of Highness Princess Maha Chakri Sirindhorn’s Projects society and the environment. The Bank realizes the Corporate and All-China Youth Federation (ACYF) staged a seminar Social Responsibilities (CSR) as a part of its efforts toward entitled, “Developing the Power of Youth: Building a sustainable development. The CSR policies and activities Common Foundation of Quality for the Future”. On this are based on the following criteria: occasion, HRH Princess Maha Chakri Sirindhorn gave • To strictly adhere to the Statement of Business a lecture on “Development of Children and Youth in Conduct, and to participate in social development and Remote Areas” on Tuesday, 27th March, 2007, at the environment protection. Samannachan Room, KASIKORNBANK, Head Office, • To encourage officers at all levels to strictly abide by Ratburana. The event attracted around 500 participants the Code of Conduct and CSR Principles. from Thailand and the People’s Republic of China. • To embark on CSR activities for the benefits of all stakeholders. • Painting Contest in Honor of His Majesty the King on the • To arrange workplaces by placing considerable Auspicious Occasion of His 80th Birthday Anniversary emphasis on safety, occupational health, environmental To honor His Majesty the King on the auspicious concern and facilitation for officers and customers. occasion of His 80th Birthday on December 5, 2007, • To promote environmental preservation. KBank organized a painting contest to promote artistic • To avoid credit grants for any projects in contravention creations of Thai artists. The theme of the artwork mainly of the national environmental protection laws. demonstrated His Majesty the King’s royal benevolence toward all his subjects, including his perseverance in The Bank’s CSR activities in 2007 can be categorized carrying out his tasks with the Ten Royal Virtues (Tossapit into four areas - society, environment, customers and Rajatham) and a determined heart, bringing happiness employees. To summarize: and tranquility to the Thai people. Moreover, the paintings portrayed the customs, traditions, art, culture and social Society conditions of the people during his reign. Cash prize The Bank has initiated and cooperated with both public awards for the contest that drew 396 entries nationwide and private agencies in organizing activities for social totaled Baht 3,200,000. The work entitled, “Three contributions. These include the development of youth and Southernmost Provinces of Thailand” of Mr. Sirichai the underprivileged, provision of support for education, arts Phummak won the “Golden Painting Brush” Award for the and culture, sports, religion, public health, disaster relief best painting. and community development. These activities were:

224 ANNUAL REPORT 2007 • Exemplary Organization • Scholarships The Bank was commended for its exemplary success The Bank always places significance on education. As in organizational management. In 2007, nearly 30 part of the Bank’s efforts to promote education, in 2007, organizations and leading institutes, both domestic and the Bank provided one scholarship worth Baht 138,000 to foreign, i.e., public agencies, universities, private companies fund the writing of student theses for graduate study at the as well as financial institutions paid visits to the Bank for Faculty of Economics, Thammasat University, and six presentations on its organizational management. Selected scholarships for undergraduate study at Chulalongkorn presentation topics included the national economic situation, University at Baht 15,000 each, totaling Baht 90,000. Two business management, banking services, good corporate scholarships at Baht 500,000 each were also provided to governance, risk management, organizational structure, undergraduate students with good academic performances human resources management, IT management and in communications field under the five-year project, worth communications, etc. The knowledge obtained first-hand a total of Baht 5,000,000 at Huachiew Chalermprakiet would later be applied with their organizations to ensure University. Students will gain experience in communication greater management efficiency. arts, i.e., radio and television broadcasting or journalism through practical training. In addition, the Bank donated • Project on “Book Corner in Commemoration of His a sum of Baht 200,000 to provide educational equipment Majesty the King’s 80th Birthday” to the Faculty of Dentist, Chulalongkorn University, and In honor of His Majesty the King’s 80th Birthday on another sum of Baht 2,400,000 to support the Chinese and December 5, 2007, the Bank, in cooperation with the Bank Japanese Language Training Project of the Faculty of Arts, of Thailand, initiated a project on the “Book Corner in Commemoration of His Majesty the King’s 80th Birthday” Chulalongkorn University. to distribute good books for youths and bookshelves to schools. The project which was intended to instill reading • “Waen Kaeo” Project habits into rural youths, create reading opportunities and The Bank in cooperation with PR Bank Club accepted enhance their knowledge, was launched at 104 schools donations of unused eyeglasses and lenses from KBank’s and worth a total of Baht 5.2 million in 2007. employees and the general public to support the HRH Princess Maha Chakri Sirindhorn’s Fund, Mettapracharak (Wat Rai Khing) Hospital’s Eyeglasses Bank. The project received 784 eyeglasses, 300 lenses with frames and Baht 15,000 in donations, which were given to children and needy people with poor eyesight across the country.

The President represented the Bank to present scholarships to Huachiew The “Golden Painting Brush” Award-winning picture entitled Chalermprakiet University students, as part of the Bank’s support and “Three Southernmost Provinces of Thailand” encouragement of quality graduates in the communication arts

ANNUAL REPORT 2007 225 To honor His Majesty the King on the auspicious occasion of His 80th The Bank’s Chairman presiding over a Royal Kathin Robe Birthday Anniversary, the Bank provided scholarships to Buddhist Presentation Ceremony monks and novices to complete their Pali-Dhamma Education

• Project on Planting Taproot for Buddhist Followers • Youth Camp, New Year’s Celebration and Seaside Tour (KBank Support for Dhamma Education for Monks and Project for Underprivileged Youth Novices) The Bank cares for underprivileged children living at Recognizing the importance of Buddhism, religious youth shelters. The Youth Camp for underprivileged and support and the dissemination of Buddhist teachings under disabled children are therefore organized to give these the Project on Planting Taproot for Buddhist Followers, children the opportunity to join activities related to arts, the Bank provided scholarships worth Baht 1,400,400 to music and sports, which are beneficial to their health Buddhist monks and novices to complete their 10-year and other skills for living. Also, in 2007, the Bank took Pali-Dhamma Education to attain the highest level of a group of 325 underprivileged and disabled children to Buddhist Dhamma (Parientham Prayoke 1-9). the seaside, staying at the Bank’s resort facility in Suk Samakkhi Village, Hua Hin, Prachuap Kiri Khan for three • Royal Kathin Robe Presentation Ceremony days and two nights. During New Year, more than 500 As part of the efforts to support Buddhism, the Bank underprivileged children were taken to see a movie at SF organizes a Royal Kathin Robe Presentation Ceremony Cineplex, Central World. New Year celebration and gift every year. In 2007, a Royal Kathin Robe Presentation giving were also held for them at KBank Sports Club. Ceremony was held at Wat Sunanthavanaram, Kanchanaburi, and was presided over by the Bank’s Chairman. The event • National Children’s Day Project was able to raise a total sum of Baht 8,000,000 in donations Recognizing the significance of child development that from participants including KASIKORNBANKGROUP (KGroup) will contribute greatly to the nation, the Bank organizes executives, employees, customers, the general public and National Children’s Day activities each year. To this end, officials from local agencies. the Bank gave away 10,000 notebooks and 5,000 sets of stationery supplies to communities in Bangkok, child development centers, youth centers, schools, and public

KBank and PR Bank Club presenting eyeglasses and lenses to A party for underprivileged children at Suk Samakkhi Village, Mettapracharak (Wat Rai Khing) Hospital’s Eyeglasses Bank Hua Hin, Prachuap Kiri Khan

226 ANNUAL REPORT 2007 To honor His Majesty the King on the auspicious occasion of His 80th Birthday Anniversary, the Bank provided scholarships to Buddhist Students participating in a volunteer camp related to A press conference on KBank’s cooperation with Thanakarn monks and novices to complete their Pali-Dhamma Education environmental conservation and rehabilitation Boon - Jao Khun Alongkot Foundation

agencies to distribute to children joining the celebrations them learn by experience and provide them with a broader held by these organizations. The Bank also staged National perspective on the Thai rural society. The activities Children Day’s 2007 celebration at Phahon Yothin Building, included newly-launched projects for local development where more than 500 children from day care centers and in cooperation with villagers, educating them on various youths in the vicinity participated in the activities, and were topics, providing assistance to needy students in remote presented with gifts from the Bank. On that day, there was areas, e.g., construction of school buildings, donating also Likay performance with teachings for youths. educational equipment and supplies, and engaging in activities related to environmental conservation and • Concern and Care Project from rehabilitation. The Bank set aside a budget to support KASIKORNBANKGROUP these programs initiated by volunteer camps for rural As part of the Bank’s efforts to give something in return to development at various educational institutions, namely customers, KBank bottled drinking water, refreshing tissue Chulalongkorn University, Kasetsart University, paper and condoms were provided to customers free of Ramkhamhaeng Open University and Mahidol University. charge at more than 600 KBank branches nationwide and on special occasions including the World AIDS Day • KBank cooperated with Thanakarn Boon-Jao Khun campaign. So far, 500,000 pieces of condoms, 500,000 Alongkot Foundation and Wat Phrabat Namphu Temple pieces of refreshing tissue paper and 1,000,000 bottles of to provide e-Banking Channels accepting Public K Excellence drinking water had been distributed. Donations In cooperation with Wat Phrabat Namphu Temple, • Support for Project on Volunteer Camps for Rural the Bank opened e-Banking channels to accept public Development donations that contribute to Thanakarn Boon-Jao Khun The Bank has a policy of encouraging students to Alongkot Foundation. This is one of the efforts to provide voluntarily take part in rural development activities to help convenient service free of charge to both donors and the

National Children’s Day activities at Phod Duang Plaza, “Aerobics for Health” activity at Pod Duang Plaza, KBank’s Phahon Yothin Main Branch KBank’s Phahon Yothin Main Branch

ANNUAL REPORT 2007 227 organizations. Donations transferred to these accounts can Thai Bankers’ Association has arranged 60 Chaipattana be made via four e-channels including K-ATM, K-Contact Aerators valued Baht 15 million for charitable projects of Center, K-Cyber Banking and Direct Debit. The Bank His Majesty the King. The installed aerators will help to also plans to extend this service via e-channels to other reduce pollutants in water resources used by the public. charitable organizations to facilitate donors in the future. • K Excellence Clocks • Aerobics for Health KBank is a private organization that has coexisted Realizing the significance of exercising to strengthen with the Thai society for a long time. To support KBank physical and mental health, and relieve stress after work, branches’ relationship development with the surrounding and to encourage the community and staff to join in group communities, the Bank made arrangement to produce exercise, KBank has organized an Aerobics for Health 3,500 K Excellence wall clocks and distributed them activity carried out daily from 17.00-18.00 hrs at the to more than 600 KBank branches to give to schools, Ratburana Head Office and Phahon Yothin Main Branch. temples, public venues, etc., as a symbol of the Bank’s The Bank also prepares K Excellence cool drinking water invariable good relations with communities. and refreshing tissue paper to serve participants after their daily workout. • ‘Mettadham’ Website KBank has set up a website called ‘Mettadham’ • Donation of Yellow Polo Shirts to Teachers and to serve as a donation exchange center for less Students at Border Patrol Police Schools fortunate children, the aged and the disabled. Items KGroup commemorated His Majesty the King’s 80th donated through the website are distributed to 54 child Birthday on December 5, 2007, by joining with staff to development centers, plus other foundations and charitable contribute funds to purchase 30,000 yellow Polo shirts, to organizations that help these target groups. In 2007, the present to teachers and students at border police schools Bank received around 1,164 boxes of donated items from across the country. The purpose is for everyone to have a KGroup staff. Acceptance of donations was also extended yellow Polo shirt to wear to honor His Majesty the King in upcountry in Chiang Mai, Ubon Ratchathani, Nakhon this auspicious year. Sawan and Chon Buri.

• Donating Chaipattana Aerators Environment Water is a vital factor that nourishes both urban and • Reforestation in Honor of the 50th Anniversary of His rural dwellers. The rapidly increasing population and need Majesty the King’s Accession to the Throne to use water resources for consumption, but without proper The Bank, in cooperation with Rajapruek Institute controls or conservation, has led to pollution of water Foundation and the Thai Bankers’ Association, took part in resources and created problems for the communities. the 3rd Phase of the project on ‘Reforestation in Honor of To reduce the problem, KBank in cooperation with the the 50th Anniversary of His Majesty the King’s Accession

KBank representatives visiting reforestation programs undertaken by the KBank set up a website called “Mettadham” Rajapruek Institute Foundation for the year 2007

228 ANNUAL REPORT 2007 to the Throne’. The reforestation program carried out with the Bank. between 2005-2007 covers 10,728 rai in national forest The headquarter office buildings and other high-rise reserves around Nan River, Ban Nam Ta, Ban Nam Li and buildings of the Bank are designed and installed with standard Ban Nam Man villages of Tha Pla district in Uttradit and Phrae. fire protection systems meeting US NFPA (National Fire At present, the reforested areas are ready for transfer to the Protection Association) standards, which are accepted National Park, Wildlife and Plant Conservation Department worldwide. Important systems within the building include an for their supervision. automatic fire alarm system, fire extinguishing systems, smoke ventilation systems, compressed air systems for each floor, • K-eMail Statement fire escape stairs and an automated building control system. At present, the world is facing global warming due to Moreover, there is also a helicopter-landing pad on the roof the unrestricted use of natural resources and fossil fuels of the car parking building as another fire exit. that cause serious pollution. With concern and care for the The Emergency Master Fire Plan of the Bank was drafted environment, KBank has developed an innovation where by experts and is updated continually. The Bank regularly customers may receive statements of their accounts via arranges fire drills at least once a year so that staff and e-mail, known as the ‘K-eMail Statement’. This service personnel who are responsible for fire fighting administration reduces the amount of paper used in printing monthly have the required knowledge and expertise to assist in building statements of account sent to customers. The K-eMail evacuation according to these plans. Statement provides all normal details of statements of The sanitation systems installed in these buildings are account and a record of goods and services purchased for the health and safety of personnel, and include such with KBank debit and credit cards, and is sent to the systems as a two-stage air filtration system plus air- e-mail address that the customer has given to the Bank. conditioning for clean air, free of outside air pollution, plus Customers will be assured of rapid, convenient, safe and lighting systems with standardized lighting levels for comfort on-time delivery of their statements without having to wait to eyesight, and water purification systems that use ozone for the printed statements by postal mail. This service to clean and clarify drinking water, etc. In addition, high- shows the Bank’s intention to reduce paper use and help quality electrical appliances are used within the buildings to conserve the environment, as well as reduce energy ensure that they are energy saving. consumption from paper production and conventional The social environment in communities is another matter postal delivery. that the Bank has always realized the importance of. The location of the head office has been designed to be pleasant • Occupational Health and Safety and shaded with landscaped gardens, trees, fountains, art The Bank takes due care to ensure that its buildings are sculptures and regular activities, etc. Emergency electricity safe, hygienically clean and have pleasant environments generators are installed with exhaust systems that filter out that are favorable to work efficiency, as well as providing smoke and odors, and have noise abatement devices to convenience for customers and persons doing business prevent disturbing nearby communities. The highly efficient waste water system provides treated water to the gardens and for use with the air-conditioning system. Therefore, apart from helping to preserve the environment, the system also helps the Bank to significantly reduce utility water costs. The Bank is also an organization that supports efforts to preserve the environment by steadily encouraging the use of recycled paper. In addition, the Bank has a policy to not approve loans to projects that violate the environmental laws of the country. Fire evacuation training for KBank’s employees

ANNUAL REPORT 2007 229 Customers the Faculty of Service Industries, Rajamangala University of As the Thai economy prospers, competition has become Technology Isan and Prince of Songkha University, to develop inevitably more intense. The Bank recognizes the importance the potential of 1,095 SME entrepreneurs nationwide free of upgrading the competitive potential to entrepreneurs. of change, through practical knowledge relayed by teachers Small-to-medium enterprises with sound business practices, and lecturers of these universities. The project took a period in particular, have thus been promoted to ensure their of two to three months and holds the main objective to healthy growth and effective contribution to the country’s enhance the sustainable development of SME business economic development. operations. In addition, the Bank has promoted the building To this end, entrepreneurs have been provided with of business networks for SME entrepreneurs nationwide. business-related knowledge to ensure them with a better Entrepreneurs can thus learn to extend the survivability of understanding on how to effectively operate businesses, their business in the long run. Furthermore, the Bank has tackle problems, so as to improve their businesses. This constructed a website www.ksmecare.com to serve as a will eventually lead to more sustainable growth in their resource center, business news and advice on related topics, business operations. including providing training and seminars conducted by the Training courses and seminars have thus been staged Bank and/or its alliance partners. The Bank received the by KBank to provide its customers and entrepreneurs with award “Excellence in SME Banking Award” from The Asian business-related knowledge that can be applied effectively Banker magazine in recognition for these efforts. and in a timely manner. These programs, through which customers’ competitive potential is bolstered to broaden Employees their perspectives in doing business, well comply with the The Bank places great emphasis on personnel government’s policies and vision to promote SME businesses. development. Thus, various study courses have been In 2007, the Bank launched learning-related programs organized for KBank employees to enhance their knowledge, and seminars including: ability and skills to be in line with the strategic and business plans of KGroup so as to achieve optimum • Project to Promote Sustainable Management for SMEs customer satisfaction. Among the programs launched for KBank has begun the project called “K SME Care” in KBank employees in 2007 were: cooperation with the SME Incubation Center, Faculty of Commerce and Accountancy of Chulalongkorn University and • A training course to improve competency in product other universities in the provinces, such as the Faculty of management within four divisions: 1) Corporate Business Business Administration, Chiang Mai University; the Faculty Division 2) Capital Markets Business Division 3) SME of Management Science, Khon Kaen University; the Faculty Business Division 4) Retail Business Division. The Bank has of Humanities and Social Science, Burapa University, and improved the recruitment standards for those divisions in

The Bank organized a certificate awarding ceremony for the SME Employee training at KBank’s Learning Center, training class which promoted sustainable management Chachoengsao Province

230 ANNUAL REPORT 2007 order to meet higher requirements. Also, the Bank offers a • Development of Employee Potential course on product conception through to innovation and In 2007, the Bank started KBank eLearning programs, launch into the market. The Bank also does follow ups and which feature studies in 100 training courses via electronic performance evaluation with trainees. channels. KGroup employees can select to study any courses that enhance their skills necessary for their jobs, or other • Management Development Program (MDP) was training courses as desired. continuously offered for 4 levels of executives: 1) Executive Level (First Senior Vice Presidents to Executive • The Bank places importance on the health of Vice Presidents) 2) Middle Managers (First Vice Presidents employees and offers annual medical check-up programs and Senior Vice Presidents) 3) First Line Managers (Vice for all employees. Presidents who are Department Heads), and 4) Team Leaders (Unit Managers and Vice Presidents that acts as Plans for Corporate Social Responsibility Activities in the team leaders). The Bank also arranged training courses Future such as courses on the foundation of leadership, the KBank continues to strive for sustainable development Leadership I-II-III courses, and the Problem Solving and in its operations that places significance on the economy, Decision Making (PSDM) course, etc. These training courses society, and the environment. The Bank will continue to are conducted continuously for executives. further develop and promote education in the society, with special focus on children and youths. The number of learning courses and the number of employees attending the courses in 2007: Learning Courses in 2007 Number of Topics Number of Classes Number of Employees Attended In-house Learning Courses 197 1,368 39,064 Outside Learning Courses 498 567 1,324 eLearning Courses 47 54 5,571 Total 742 1,989 45,959

Remark: Each employee is allowed to attend several study courses during the year

FACTORS AFFECTING INVESTMENT DECISIONS

Legal Disputes Other than the lawsuit incurred pursuant to an ordinary banking business operation, KBank has no controversy against any other entities where KBank is a litigant or a concerning party, and such controversy is still pending or may cause any negative impact to KBank’s assets, causing by the litigation with its litigated sum (excluding interest and expenses) greater than 5% of shareholder’s equity, according to the balance sheet as of the latest fiscal year-end. However, there have been pending trials that arose from normal banking business operations with litigated sum totaling to Baht 9,201 million. KBank’s management has an opinion that all the aforementioned lawsuits will not fundamentally impair banking business operation of the Bank.

ANNUAL REPORT 2007 231

STRUCTURE • Organization Chart • Board of Directors and Executives • Investments of KASIKORNBANK in Other Companies

4 Product Domains To reflect every facet of our customers’ financial needs

ORGANIZATION CHART

Auditor

Corporate Secretary

1. Corporate Secretariat 2. Corporate Strategy Division Management Division

1. Office of Corporate Secretary (OS.) 1. Corporate Strategy Dept. (CS.) 2. Corporate Relations Dept. (CN.) 3. Overseas Office Management and Correspondent Relations Dept. (OC.)

4. Corporate Business 5. SME Business 6. Retail Business 7. Capital Markets Business Division Division Division Division

1. Corporate Portfolio 1. Medium SME Segment Management 1. Retail Portfolio Management Dept. (RP.) (No Department) Management Dept. (CM.) Dept. (MD.) 2. Consumer Segment Management 2. Corporate Business Marketing  2. Small SME and Micro Segment Dept. (SM.) and Products Dept. (BP.) Management Dept. (MC.) 3. Consumer Loans Product Management 3. Cash Management Dept. (CH.) 3. SME Marketing and Business and Marketing Dept. (CL.) 4. Corporate Credit Product Support Dept. (MM.) 4. Credit Card Product Management and Management Dept. (CR.) 4. SME Business Operation Dept. (SO.) Marketing Dept. (CD.) 5. Securities Services Dept. (SS.) 5. SME Business Network 1 (ME.) 5. Retail Deposit and Fee Products 6. International Trade Dept. (IN.) 6. SME Business Network 2 (SE.) Management Dept. (DF.) 7. Multi-Corporate Business Dept. (MB.) 6. Retail Business Development Dept. (BD.) 8. Large Corporate Business Dept. (CB.) 7. Business Channel Management 9. Global Business Development Dept. (GD.) Dept. (BC.) 8. Retail and SME E-Business Dept. (RE.) 9. Electronic Channel and Sales and Service Network Operation Support Dept. (EC.) 10. Integrated Marketing Communication Dept. (IC.) 11. Distribution Network Execution Support Dept. (DS.) 12. Consumer Sales Management Dept. (SD.) 13. Service and Sales Network (BN.) 14. Consumer Credit Product Operation Dept. (PO.) 15. Customer Relations Dept. (CU.) 16. Private Wealth Management Dept. (PW.) 17. Consumer Financial Planning Dept. (CF.)

234 ANNUAL REPORT 2007 Advisers to the Board of Directors / Legal Adviser Shareholders Corporate Governance Committee

Human Resources and Board of Directors Remuneration Committee

Audit Committee Advisory Directors to the Management Committee Risk Management Committee

Management Committee

3. Compliance and Audit Division

1. Compliance Dept. (CO.) 2. Internal Audit Dept. (IA.)

8. Credit Management 9. Finance and Control 10. Systems Division 11. Human Resource Division Division Division

1. Credit Policy Dept. (CP.) 1. Internal Risk Management Dept. (IM.) 1. Process Development Dept. (PD.) 1. Human Resource Management 2. Credit Underwriting Dept. (UW.) 2. Financial Planning Dept. (FP.) 2. Information Management Dept. (ID.) Dept. (HM.) 3. Asset Quality Management Dept. (AQ.) 3. Central Treasury Dept. (TS.) 3. Information Technology Management 2. Employee Relations Dept. (ER.) 4. Retail and SME Asset Quality 4. Financial Accounting Management Dept. (IT.) 3. Human Resource Development Management Network (RN.) Dept. (FA.) 4. Information Technology Planning Dept. (HD.) 5. Legal Dept. (LG.) 5. Risk Asset Review Dept. (RR.) Dept. (IP.) 6. Retail and SME Business Collection 5. Information Technology Operation and Recovery Dept. (CV.) Dept. (IO.) 6. Treasury and Capital Markets Operation Dept. (TO.) 7. Credit Processing Dept. (CT.) 8. Cash and Payment Processing Dept. (CA.) 9. Facilities and Fixed Asset Management Dept. (FM.)

Effective Date : 1 January 2008

ANNUAL REPORT 2007 235 BOARD OF DIRECTORS

Chairman Vice Chairman 1. Mr. Banyong Lamsam 2. Pol. Gen. Pow Sarasin

1 2

Legal Adviser Assistant Secretary to the Board of Dr. Abhijai Chandrasen Directors Dr. Adit Laixuthai Corporate Secretary Ms. Arasa Ampornpong Ms. Tida Samalapa Ms. Prayoonsri Katanyutanon

236 ANNUAL REPORT 2007

Directors 3. Mr. Banthoon Lamsam 4. Dr. Prasarn Trairatvorakul 5. Mr. Sukri Kaocharern 6. M.R. Sarisdiguna Kitiyakara 7. M.R. Yongswasdi Kridakon 8. Mr. Somchai Bulsook 9. Ms. Sujitpan Lamsam 10. Prof. Khunying Suchada Kiranandana 3 4 5 6 7 11. Mr. Charles L. Coltman, III 8 9 10 11 12. Dr. Abhijai Chandrasen 12 13 14 13. Ms. Elizabeth Sam 14. Mr. Chaisak Saeng-Xuto 15 16 15. Dr. Schwin Dhammanungune 16. Prof. Dr. Pairash Thajchayapong Assistant Secretary to the Board of Directors Dr. Adit Laixuthai Ms. Arasa Ampornpong Ms. Prayoonsri Katanyutanon

ANNUAL REPORT 2007 237 BOARD OF DIRECTORS AND EXECUTIVES 1. Mr. Banyong Lamsam 3. Mr. Banthoon Lamsam Chairman of the Board of Directors Director Advisory Director to the Management Committee Chief Executive Officer (Authorized Signature) Chairman of the Risk Management Committee Age 74 (Authorized Signature) Education Age 54 • BBA (Banking and Finance), University of New Mexico, U.S.A. Education Training • MBA, Harvard University, U.S.A. • Director Accreditation Program (DAP), Thai Institute of Directors Training Experience Over Past 5 Years • Director Certification Program (DCP), Thai Institute of Directors 1992 - Present Chairman of the Board of Directors, Experience Over Past 5 Years KASIKORNBANK PCL 2004 - Present Chief Executive Officer, KASIKORNBANK PCL 2000 - Present Advisory Director to the Management Committee, 2003 - Present Chairman of the Risk Management Committee, KASIKORNBANK PCL KASIKORNBANK PCL 1991 - Present Chairman, Dole Thailand Limited 1992 - 2004 President, KASIKORNBANK PCL 1992 - Present Director, Com-Link Company Limited 1997 - Present Director, Santikaset Company Limited Family Relationship 1999 - Oct 2007 Chairman, • Cousin of Ms. Sujitpan Lamsam KASIKORN RESEARCH CENTER CO., LTD. • Uncle of Mr. Banthoon Lamsam and Mr. Krisada Lamsam Family Relationship • Nephew of Mr. Banyong Lamsam and Ms. Sujitpan Lamsam 2. Police General Pow Sarasin • Cousin of Mr. Krisada Lamsam Vice Chairman Advisory Director to the Management Committee 4. Dr. Prasarn Trairatvorakul Chairman of the Corporate Governance Committee Director (Authorized Signature) President Age 78 Member of the Risk Management Committee Education (Authorized Signature) • Bachelor of Science (Chemistry), Johns Hopkins University, U.S.A. Age 55 • Bachelor of Science (Criminology), University of California, U.S.A. Education Training • Ph.D. (Business Administration), Harvard University, U.S.A. • Director Accreditation Program (DAP), Thai Institute of Directors Training Experience Over Past 5 Years • Director Certification Program (DCP), Thai Institute of Directors 1992 - Present Vice Chairman, KASIKORNBANK PCL Experience Over Past 5 Years 2000 - Present Advisory Director to the Management Committee, 2004 - Present President, KASIKORNBANK PCL KASIKORNBANK PCL 2004 - Present Member of the Risk Management Committee, 2002 - Present Chairman of the Corporate Governance Committee, KASIKORNBANK PCL KASIKORNBANK PCL 2004 - Present Chairman, 1993 - Present Chairman, Mitsubishi Elevator Asia Company Limited KASIKORN LEASING CO., LTD. 1994 - Present Honorary Chairman, Independent Director and 2005 - Present Chairman, Chairman of the Audit Committee, Charoen KASIKORN FACTORING CO., LTD. Pokphand Foods Public Company Limited 1999 - 2003 Secretary-General, Office of the Securities 2002 - Present Director, and Exchange Commission of Thailand Quality House Public Company Limited Family Relationship None 2002 - 2007 Director, Siam Food Public Company Limited Family Relationship None

238 ANNUAL REPORT 2007 5. Mr. Sukri Kaocharern Training Director • Senior Executive Program, IMI Switzerland Advisory Director to the Management Committee • Advanced Management Program, Wharton, U.S.A. Member of the Corporate Governance Committee • The Role of the Chairman Program, Thai Institute of Directors (Authorized Signature) • Director Certification Program (DCP), Thai Institute of Directors Age 70 • Finance for Non-Finance Director, Thai Institute of Directors Education Experience Over Past 5 Years • Master of Science (Accounting), Southern Illinois University, U.S.A. 1985 - Present Director, KASIKORNBANK PCL Training 2000 - Present Chairman of the Audit Committee, • Director Accreditation Program (DAP), Thai Institute of Directors KASIKORNBANK PCL • Director Certification Program (DCP), Thai Institute of Directors 1984 - Present Member of the Advisory Council, SASIN Graduate • Certificate in Senior Executive Program, Capital Market Academy Institute of Business Administration of Experience Over Past 5 Years Chulalongkorn University 1981 - Present Director, KASIKORNBANK PCL 1994 - Present Member of the Steering Committee, 2000 - Present Advisory Director to the Management Committee, College of Management, Mahidol University KASIKORNBANK PCL 2005 - Present Chairman of the International Board, 2002 - Present Member of the Corporate Governance Committee, United World Colleges of Thailand KASIKORNBANK PCL Family Relationship None 1979 - Present Chairman, Thai Caster Oil Company Limited 1990 - Present Director and Vice Chairman of the Audit Committee, 7. M.R. Yongswasdi Kridakon Jutha Maritime Public Company Limited Director 2002 - Present Director, Petform (Thailand) Company Limited Advisory Director to the Management Committee 2002 - Present Director, Yip In Tsoi & Jakcs Company Limited Member of the Human Resources and Remuneration Committee 2003 - Present Commission Member Qualified and Experienced (Authorized Signature) in Commerce, Agricultural Futures Trading Age 80 Commission Education 2004 - Present Chairman, Indorama Polymers Public Company • Bachelor of Liberal Arts, Randolph-Macon College, U.S.A. Limited Training 2000 - 2006 Committee Member, Performance Agreement • Director Accreditation Program (DAP), Thai Institute of Directors Committee, State Enterprise Policy Office Experience Over Past 5 Years 2002 - 2005 Chairman of the Audit Committee, 1991 - Present Director, KASIKORNBANK PCL Ministry of Commerce 2000 - Present Advisory Director to the Management Committee, Family Relationship None KASIKORNBANK PCL 2002 - Present Member of the Human Resources and 6. M.R. Sarisdiguna Kitiyakara Remuneration Committee, Director KASIKORNBANK PCL Chairman of the Audit Committee 1988 - Present Deputy Director General, Bureau of the Age 70 Crown Property Education 1990 - Present Director, Deves Insurance Public Company Limited • M.A. (Engineering), Cambridge University, England 2006 - Present Director, CPB Equity Company Limited Family Relationship None

ANNUAL REPORT 2007 239 8. Mr. Somchai Bulsook 2000 - Present Director, Muang Thai Life Assurance Director Company Limited Member of the Audit Committee 2000 - Present Chairman, Phethai Asset Management Age 65 Company Limited Education 2004 - Present Director, Phatra Insurance • BBA, Menlo School of Business, U.S.A. Public Company Limited Training Family Relationship • Director Certification Program (DCP), Thai Institute of Directors • Cousin of Mr. Banyong Lamsam Experience Over Past 5 Years • Aunt of Mr. Banthoon Lamsam and Mr. Krisada Lamsam 1993 - Present Director, KASIKORNBANK PCL 1998 - Present Member of the Audit Committee, 10. Professor Khunying Suchada Kiranandana KASIKORNBANK PCL Director 1992 - Present Director and Executive Director, Member of the Audit Committee Bangkok Glass Industry Company Limited Age 61 1996 - Present President and Chief Executive Officer, Education Serm Suk Public Company Limited • Ph.D. (Statistics), Harvard University, U.S.A. 1997 - Present Chairman, Training Serm Suk Beverage Company Limited • Director Certification Program (DCP), Thai Institute of Directors 2002 - Present Chairman, Experience Over Past 5 Years Petform (Thailand) Company Limited 2000 - Present Director, KASIKORNBANK PCL 2003 - Present Director and Executive Director, 2000 - Present Member of the Audit Committee, Royal Orchid Hotel (Thailand) Public KASIKORNBANK PCL Company Limited 2004 - Present Rector, Chulalongkorn University 2003 - Present Director, 1997 - Present President, Thai Statistical Association Sheraton Royal Orchid Company Limited 1999 - 2004 Dean, The Graduate School, 2003 - Present Director, Thai Royal Orchid Real Estate Chulalongkorn University Company Limited Family Relationship None 2006 - Present Chairman, Serm Suk Holdings Company Limited 11. Mr. Charles L. Coltman, III Family Relationship None Director Age 64 9. Ms. Sujitpan Lamsam Education Director • Graduate Study in Asian Affairs, American University, U.S.A. Member of the Risk Management Committee Training (Authorized Signature) • Director Accreditation Program (DAP), Thai Institute of Directors Age 48 Experience Over Past 5 Years Education 2000 - Present Director, KASIKORNBANK PCL • M.A. Honors (Economics), Cambridge University, England 2002 - 2006 Chairman of the Human Resources and • Master of Science in Management, Massachusetts Institute Remuneration Committee, of Technology, U.S.A. KASIKORNBANK PCL Training 1999 - Present Chairman, Trump Lender Services Limited • Director Accreditation Program (DAP), Thai Institute of Directors 2001 - Present Chairman, World Risk Consultants LLC Experience Over Past 5 Years 2001 - Present Chairman of International Advisory Committee, 1999 - Present Director, KASIKORNBANK PCL National City Bank 2004 - Present Member of the Risk Management Committee Family Relationship None KASIKORNBANK PCL

240 ANNUAL REPORT 2007 12. Dr. Abhijai Chandrasen 14. Mr. Chaisak Saeng-Xuto Director and Legal Adviser Director Advisory Director to the Management Committee Member of the Human Resources and Remuneration Committee (Authorized Signature) Member of the Corporate Governance Committee Age 59 Age 64 Education Education • Docteur en Droit (Honors), Paris University (Sorbonne), France • MS (Engineering), University of California, Berkeley, U.S.A. Training Training • Director Accreditation Program (DAP), Thai Institute of Directors • Advanced Management Program, Harvard University, U.S.A. • Finance for Non-Finance Director, Thai Institute of Directors • Director Accreditation Program (DAP), Thai Institute of Directors • Developing Corporate Governance Policy, Thai Institute of Directors Experience Over Past 5 Years • Role of Compensation Committee, Thai Institute of Directors 2001 - Present Director, KASIKORNBANK PCL Experience Over Past 5 Years 2002 - Present Member of the Human Resources and 2000 - Present Director and Legal Adviser, Remuneration Committee, KASIKORNBANK PCL KASIKORNBANK PCL 2000 - Present Advisory Director to the Management Committee, 2006 - Present Member of the Corporate Governance Committee KASIKORNBANK PCL KASIKORNBANK PCL 1994 - Present Director, 1999 - Present Director and Chairman of the Executive Board, Sammakorn Public Company Limited Thai British Security Printing Public Company Limited 2003 - Present Audit Committee Member and Chairman of the 2000 - Present Independent Director, Chairman of the Human Human Resources and Remuneration Committee, Resources and Remuneration Committee, Sammakorn Public Company Limited Member of the Audit Committee, Siam Commercial 2000 - Present Chairman, Punyariddhi Law Office Company Limited Samaggi Insurance Public Company Limited 2005 - Present Director, Siam Motors Company Limited 2006 - Present Director and Chairman of the Executive Board 2006 - Present Eminent Director, The National Commission on Thai Airways International Public Company Limited the Elderly Office of the Prime Minister 2006 - Present Adviser, CPB Equity Company Limited Family Relationship None 2001 - 2006 Adviser to the Board, Siam Cement Public Company Limited 13. Ms. Elizabeth Sam Family Relationship None Director Member of the Audit Committee 15. Dr. Schwin Dhammanungune Age 68 Director Education Chairman of the Human Resources and Remuneration Committee • BA Honors (Economics), University of Singapore, Singapore Age 55 Training Education • Director Accreditation Program (DAP), Thai Institute of Directors • D.B.A. (International Business Administration), Experience Over Past 5 Years US International University, U.S.A. 2001 - Present Director and Member of the Audit Committee, • Ph.D. (I/O Psychology), US International University, U.S.A. KASIKORNBANK PCL Training 1999 - Present Director, Asia Investment Corporation • Director Certification Program (DCP), Thai Institute of Directors 2000 - Present Independent Director, Boardroom Limited Experience Over Past 5 Years 2004 - Present Director, Banyan Tree Holdings Limited 2001 - Present Director, KASIKORNBANK PCL Family Relationship None

ANNUAL REPORT 2007 241 2005 - Present Chairman of the Human Resources and 17. Dr. Piengchai Pookakupt Remuneration Committee, Executive Vice President KASIKORNBANK PCL Age 54 2002 - 2005 Member of the Human Resources and Education Remuneration Committee, • Ph.D. International Business, KASIKORNBANK PCL University of Wisconsin - Madison, U.S.A. 1995 - Present President, LEARNET International (Thailand) Training Company Limited • Director Certification Program (DCP), Thai Institute of Directors 1995 - Present President, Business Intelligence Creativity Co., Ltd. Experience Over Past 5 Years 2003 - Present Chairman of the Academic Standard Regulatory 1999 - Present Executive Vice President, Committee of International Business Program, KASIKORNBANK PCL University of the Thai Chamber of Commerce Family Relationship None 2005 - Present Chairman of the Board of Directors, Irawin Company Limited 18. Mr. Boontuck Wungcharoen 2005 - Present President, Irawin Capital Company Limited Executive Vice President 2006 - Present Chairman of the Academic Standard Regulatory Age 51 Committee of International Business Program, Education Eastern Asia University • Master of Business Administration, New York University, U.S.A. 2007 - Present Chairman, Irawin Foundation Experience Over Past 5 Years Family Relationship None 1999 - 2007 Executive Vice President, KASIKORNBANK PCL 16. Professor Dr. Pairash Thajchayapong Family Relationship None Director * Mr. Boontuck Wungcharoen resigned from the Bank, effective on January 1, 2008 Age 63 Education 19. Mr. Somkiat Sirichatchai • Ph.D. (Electronics and Computer Engineering), Executive Vice President Cambridge University, England Age 43 Training Education • Director Accreditation Program (DAP), Thai Institute of Directors • Master of Business Administration, University of Pennsylvania Experience Over Past 5 Years (Wharton), U.S.A. June 2007 - Present Director, KASIKORNBANK PCL Experience Over Past 5 Years 2005 - Present Specialist and Senior Advisor, 2004 - Present Executive Vice President, National Science and Technology KASIKORNBANK PCL Development Agency, (NSTDA) 2001 - 2003 First Senior Vice President, 1995 - Present Chairman of the Board of Directors, KASIKORNBANK PCL Internet Thailand Public Company Limited Family Relationship None 2004 - 2005 Permanent Secretary, Ministry of Science and Technology Family Relationship None

242 ANNUAL REPORT 2007 20. Mr. Predee Daochai 23. Mr. Sasawat Virapriya Executive Vice President Executive Vice President Age 49 Age 48 Education Education • Master of Comparative Law, University of Illinois, U.S.A • Master of Science, North Texas State University, U.S.A. Training Experience Over Past 5 Years • Director Certification Program (DCP), Thai Institute of Directors 2006 - Present Executive Vice President, Experience Over Past 5 Years KASIKORNBANK PCL 2004 - Present Executive Vice President, 2001 - 2005 First Senior Vice President, KASIKORNBANK PCL KASIKORNBANK PCL 2001 - 2004 First Senior Vice President, Family Relationship None KASIKORNBANK PCL Family Relationship None 24. Mr. Methee Pattarakornkul First Senior Vice President 21. Mr. Krisada Lamsam (In charge of Financial Accounting Management Department, Executive Vice President Finance and Control Division) Age 43 Age 58 Education Education • Master of Arts, Oregon State University, U.S.A. • Bachelor of Business Administration, Thammasat University Experience Over Past 5 Years Experience Over Past 5 Years 2006 - Present Executive Vice President, 1999 - Present First Senior Vice President, KASIKORNBANK PCL KASIKORNBANK PCL 2001 - 2005 First Senior Vice President, Family Relationship None KASIKORNBANK PCL Family Relationship 25. Mr. Prasopsuk Damrongchietanon • Nephew of Mr. Banyong Lamsam and Ms. Sujitpan Lamsam First Senior Vice President • Cousin of Mr. Banthoon Lamsam (In charge of Financial Planning Department, Finance and Control Division) 22. Mr. Teeranun Srihong Age 45 Executive Vice President Education Age 42 • Master of Business Administration, University of Rochester, U.S.A. Education Experience Over Past 5 Years • Master of Business Administration, University of Michigan, 2003 - Present First Senior Vice President, Ann Arbor, U.S.A. KASIKORNBANK PCL Experience Over Past 5 Years Family Relationship None 2006 - Present Executive Vice President, * Mr. Prasopsuk Damrongchietanon has been assigned to oversee other tasks, KASIKORNBANK PCL effective on January 1, 2008. 2001 - 2005 First Senior Vice President, KASIKORNBANK PCL Family Relationship None

ANNUAL REPORT 2007 243 26. Ms. Siriluck Ratanachai First Senior Vice President (Department Head, Financial Planning Department) Age 40 Education • Master of Business Administration, University of Chicago, U.S.A. Experience Over Past 5 Years Jan 2008 - Present First Senior Vice President, KASIKORNBANK PCL 2006 - 2007 Senior Vice President, Financial Planning Department, KASIKORNBANK PCL 2004 - 2005 First Vice President, Financial Planning Department, KASIKORNBANK PCL 2000 - 2003 First Vice President, Financial Accounting Management Department, KASIKORNBANK PCL Family Relationship None 27. Ms. Wasana Surakit Senior Vice President (Department Head, Financial Accounting Management Department) Age 40 Education • Master of Business Administration, Thammasat University Experience over Past 5 Years Jan 2008 - Present Senior Vice President, Financial Accounting Management Department, KASIKORNBANK PCL 2004 - 2007 First Vice President, Financial Accounting Management Department, KASIKORNBANK PCL 2001 - 2003 Vice President, Financial Accounting Management Department, KASIKORNBANK PCL Family Relationship None

Remark: The Stock Exchange of Thailand guidelines define that directors, managers, and those who hold management positions (department head level and above) in the Accounting and Finance Divisions have the responsibility to prepare and submit their holdings in the Bank’s securities.

244 ANNUAL REPORT 2007 Directorship of KASIKORNBANK Directors and Executives in Subsidiaries, Associated and Related Companies As of December 31, 2007

Position

Subsidiaries Associated Related Companies Name Company KASIKORNBANK PCL 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 1 1 2 3 1 Mr. Banyong Lamsam Chairman / / 2 Pol. Gen. Pow Sarasin Vice Chairman 3 Mr. Banthoon Lamsam Chief Executive Officer 4 Dr. Prasarn Trairatvorakul President X X 5 Mr. Sukri Kaocharern Director 6 M.R. Sarisdiguna Kitiyakara Director 7 M.R. Yongswasdi Kridakorn Director 8 Mr. Somchai Bulsook Director 9 Ms. Sujitpan Lamsam Director X 10 Prof. Khunying Suchada Kiranandana Director 11 Mr. Charles L. Coltman, III Director 12 Dr. Abhijai Chandrasen Director and Legal Adviser 13 Ms. Elizabeth Sam Director 14 Mr. Chaisak Saeng-Xuto Director 15 Dr. Schwin Dhammanungune Director / 16 Prof. Dr. Pairash Thajchayapong Director 17 Dr. Piengchai Pookakupt Executive Vice President / 18 Mr. Boontuck Wungcharoen (6) Executive Vice President / 19 Mr. Somkiat Sirichatchai Executive Vice President X X X X X X X X X / X 20 Mr. Predee Daochai Executive Vice President 21 Mr. Krisada Lamsam Executive Vice President / 22 Mr. Teeranun Srihong Executive Vice President / / / 23 Mr. Sasawat Virapriya Executive Vice President / / 24 Mr. Methee Pattarakornkul First Senior Vice President / 25 Mr. Prasopsuk Damrongchietanon (7) First Senior Vice President / 26 Ms. Siriluck Ratanachai (8) Department Head, Financial Planning Department 27 Ms. Wasana Surakit Department Head, Financial Accounting Management Department

Remarks: 1) X = Chairman : / = Director : // = Executive Director 2) List of Subsidiaries 1. Phethai Asset Management Company Limited 7. Progress Storage Company Limited 13. KASIKORN Securities Public Company Limited 2. Progress Plus Company Limited 8. Progress Service Company Limited 14. KASIKORN Asset Management Company Limited 3. Progress Land and Buildings Company Limited 9. Progress Appraisal Company Limited 15. KASIKORN Factoring Company Limited 4. KASIKORN Research Center Company Limited 10. Progress Software Company Limited 16. Progress Service Support Company Limited 5. Progress Facilities Management Company Limited 11. KASIKORN LEASING COMPANY LIMITED 6. Progress Management Company Limited 12. Progress H R Company Limited 3) List of Associated Company 1. Processing Center Company Limited 4) List of Related Companies 1. Ruam Samphant Company Limited 2. Suludee Company Limited 3. Irwin Capital Company Limited 5) The above directors and executives do not receive any remuneration for holding positions in subsidiaries 6) Mr. Boontuck Wungcharoen resigned from the Bank, effective on January 1, 2008 7) Mr. Prasopsuk Damrongchietanon has been assigned to oversee other tasks, effective on January 1, 2008 8) Ms. Siriluck Ratanachai has been promoted to First Senior Vice President, in charge of Financial Planning Department, effective on January 1, 2008

ANNUAL REPORT 2007 245 CHANGES IN KASIKORNBANK SHARES HELD BY DIRECTORS AND EXECUTIVES IN 2007 As of December 31, 2007

KBank shares KBank shares Increase/ Percentage held as of held as of Decrease in of shares No. Name Position 31 December 31 December KBank shares held (%) 2006 2007 held in 2007 1 Mr. Banyong Lamsam Chairman 3,364,420 3,364,420 - 0.141 2 Pol. Gen. Pow Sarasin Vice Chairman 344,388 344,388 - 0.014 3 Mr. Banthoon Lamsam Chief Executive Officer 4,520,000 4,530,000 10,000 0.190 4 Dr. Prasarn Trairatvorakul President 11,280 11,280 - 0.000 5 Mr. Sukri Kaocharern Director 9,200 9,200 - 0.000 6 M.R. Sarisdiguna Kitiyakara Director 48,430 48,430 - 0.002 7 M.R. Yongswasdi Kridakon Director 260 260 - 0.000 8 Mr. Somchai Bulsook Director 272,990 272,990 - 0.011 9 Ms. Sujitpan Lamsam Director 50,000 50,000 - 0.002 10 Prof. Khunying Suchada Kiranandana Director 1,000 1,000 - 0.000 11 Mr. Charles L. Coltman, III Director 15,000 15,000 - 0.001 12 Dr. Abhijai Chandrasen Director and Legal Adviser 10,000 10,000 - 0.000 13 Ms. Elizabeth Sam Director 75,000 75,000 - 0.003 14 Mr. Chaisak Saeng-Xuto Director 1,430 1,430 - 0.000 15 Dr. Schwin Dhammanungune Director - - - - 16 Prof. Dr. Pairash Thajchayapong Director - - - - 17 Dr. Piengchai Pookakupt Executive Vice President - - - - 18 Mr. Boontuck Wungcharoen (3) Executive Vice President - - - - 19 Mr. Somkiat Sirichatchai Executive Vice President - - - - 20 Mr. Predee Daochai Executive Vice President 60 60 - 0.000 21 Mr. Krisada Lamsam Executive Vice President 8,880 8,880 - 0.000 22 Mr. Teeranun Srihong Executive Vice President 63,900 99,700 35,800 0.004 23 Mr. Sasawat Virapriya Executive Vice President - - - - 24 Mr. Methee Pattarakornkul First Senior Vice President 560 91,280 90,720 0.004 25 Mr. Prasopsuk Damrongchietanon (4) First Senior Vice President - - - - 26 Ms. Siriluck Ratanachai (5) Department Head, 20,000 5,000 (15,000) 0.000 Financial Planning Department 27 Ms. Wasana Surakit Department Head, Financial 1,000 2,000 1,000 0.000 Accounting Management Department

Remarks: 1) The common shares held include those of spouse and minor children. 2) The Stock Exchange of Thailand guidelines define that directors, managers, and those who hold management positions (department head level and above) in the Accounting and Finance Divisions have the responsibility to prepare and submit their holdings in the Bank’s securities. 3) Mr. Boontuck Wungcharoen resigned from the Bank, effective on January 1, 2008. 4) Mr. Prasopsuk Damrongchietanon has been assigned to oversee other tasks, effective on January 1, 2008. 5) Ms. Siriluck Rattanachai has been promoted to First Senior Vice President, in charge of Financial Planning Department, effective on January 1, 2008.

246 ANNUAL REPORT 2007 MANAGEMENT TEAM Effective on February 1, 2008

Chief Executive Officer Corporate Compliance and Mr. Banthoon Lamsam Secretariat Division Audit Division President Office of Corporate Secretary Compliance Department Dr. Prasarn Trairatvorakul First Vice President Senior Vice President Executive Vice President Ms. Marisa Watthaphanich Mr. Vasant Chariyatantiwate * Dr. Piengchai Pookakupt Ms. Pranee Visitkitchakarn First Vice President Mr. Somkiat Sirichatchai Ms. Prayoonsri Katanyutanon Ms. Warathorn Engsombon Mr. Predee Daochai Mr. Surapong Bumroongsook Mr. Krisada Lamsam Internal Audit Department Mr. Teeranun Srihong Corporate Strategy Senior Vice President Mr. Sasawat Virapriya Management Division Ms. Sumontip Otrakul * First Senior Vice President Corporate Strategy Department First Vice President Ms. Buranee Arunpairojana Senior Vice President Mr. Krisana Tesprasit Mr. Siripongs Kalayanarooj Ms. Pannee Lertchanyakul Ms. Peerapat Wongcharoenwatana Mr. Pramoth Chaiamphorn Mr. Methee Pattarakornkul First Vice President Ms. Chawiwan Varophas Ms. Choompit Wattanachai Corporate Business Mr. Chartchai Sundharagiati Ms. Oratai Nateeratanakamjai Division Mr. Tawit Thanachanan Mr. Thanit Shumnij Corporate Portfolio Management Ms. Patcharin Vongsiridej Department Mr. Ampol Polohakul Corporate Relations Department Mr. Prasopsuk Damrongchietanon First Vice President Corporate Business Marketing and Mr. Surasak Dudsdeemaytha Mr. Rungsee Buranaprapapong Products Department Ms. Kattiya Indaravijaya First Vice President Mr. Suwat Charoenvijitchai Overseas Office Management Ms. Chaowapat Lertwongsatien * Dr. Pipatpong Poshyanonda and Correspondent Relations Ms. Daranee Tanchaiswasd Department Cash Management Department Mr. Pakorn Partanapat First Vice President Senior Vice President Dr. Adit Laixuthai Mr. Chaivudh Chaiphan Mr. Weerachai Amornrat-Tana * Mr. Piti Tantakasem Mr. Kitichai Larlitlertvong First Vice President Mr. Krit Jitjang Ms. Phoranee Rhuwadhana Mr. Chatchai Payuhanaveechai K-Transformation Project Mr. Samote Viranuvatti Mr. Songpol Chevapanyaroj Senior Vice President Mr. Pongpichet Nananukool Ms. Pranee Tirasest Corporate Credit Product Mr. Pipit Aneaknithi First Vice President Management Department Mr. Vasin Vanichvoranun Ms. Sawakon Makasawat First Vice President Mr. Wirawat Panthawangkun Mr. Sorrasak Pheongrattana Mr. Photjanart Sangpruaksa * Ms. Siriluck Ratanachai Ms. Tananart Lorthong Mr. Sayam Prasitsirigul Ms. Tikumporn Papraisawang Mr. Wichai Jermhansa Mr. Winij Panamaeta *Department Head ANNUAL REPORT 2007 247 Securities Services Department Small SME and Micro Segment Credit Card Product Management Senior Vice President Management Department and Marketing Department Ms. Pranee Buranawatanachoke * First Vice President First Vice President Mr. Paphon Mangkhalathanakun * Ms. Anchalee Charasyosvuthichai * International Trade Department Senior Vice President SME Marketing and Business Retail Deposit and Fee Products Mr. Boonyong Puapongsathorn * Support Department Management Department First Vice President First Vice President Mr. Gunt Aungsuthanatharn Mr. Somchart Leelakraisorn * Retail Business Development Mr. Kittipan Jamprawit Department SME Business Operation Department Multi-Corporate Business First Vice President Business Channel Management Department Mr. Somsit Ussavanuphap * Department Senior Vice President First Vice President Mr. Sammit Sakulwira SME Business Network 1 Mr. Dolapar Petpiroon First Vice President First Vice President Mr. Kittipong Koomman Ms. Chanoksuda Chitrattana Mr. Boonchan Kulvatunyou Mr. Pattanasak Kamolngarm Mr. Thawee Teerasoontornwong Retail and SME E-Business Mr. Suwat Techawatanawana Mr. Trirong Butragaht Department Mr. Vallop Vongjitvuttikrai Senior Vice President SME Business Network 2 Mr. Art Wichiencharoen * Large Corporate Business Senior Vice President Department Mr. Vichien Juprasurtporn Electronic Channel and Sales and First Vice President First Vice President Service Network Operation Support Ms. Patcharee Uthairatanakit Mr. Akadej Chotivanich Department Mr. Prasong Hanpiyavatanasakul Mr. Suwat Pisuthiporn First Vice President Ms. Sarunya Bunyaratavej Mr. Phole Dhanashoti *

Mr. Surat Leelataviwat Retail Business Division Mr. Surin Seubvongpataya Retail Portfolio Management Integrated Marketing Communication Department Department Global Business Development Department First Vice President Distribution Network Execution Ms. Sansana Sukhanunth * Support Department Senior Vice President Mr. Pattanapong Tansomboon * Consumer Segment Management First Vice President Mr. Weeranant Chuensuwan * Department SME Business Division Medium SME Segment Consumer Loans Product Management Consumer Sales Management Management Department and Marketing Department Department First Vice President Mr. Chalat Nongkai * *Department Head

248 ANNUAL REPORT 2007 Service and Sales Network 1 Capital Markets Legal Department Senior Vice President Business Division First Vice President Mr. Samphant Takasiyanant Mr. Kobsidthi Silpachai Mr. Cheewin Prangchaikul Mr. Maytee Phanachet Mr. Sittiporn Mahaswat * Service and Sales Network 2 Ms. Nutcharee Nuntivacharin Senior Vice President Mr. Thiti Tantikulanan Retail and SME Business Collection Mr. Somchai Trilerklith Mr. Vikran Paovarojkit and Recovery Department First Vice President Service and Sales Network 3 Credit Management Ms. Hataiporn Chiemprasert * First Vice President Division Ms. Nidapa Sutiratana Mr. Manoch Kritmanorot Credit Policy Department First Vice President Finance and Control Service and Sales Network 4 Mr. Pattarapong Kanhasuwan * Division First Vice President Ms. Pichavadee Charupattanapornkit Internal Risk Management Mr. Tanong Sombutpanit Department Credit Underwriting Department First Vice President Service and Sales Network 5 First Vice President Mr. Porvarate Chetphongphan * Ms. Nartsinee Sarnvanichpitak Dr. Wichai Narongwanich Service and Sales Network 6 Mr. Niasinn Lamsam First Vice President Mr. Pipavat Bhadranavik Financial Planning Department Mr. Manus Pinthong Ms. Porawan Sudsok First Vice President Ms. Sarunya Leelarasamee * Mr. Somkiat Songsupkul Service and Sales Network 7 Asset Quality Management Central Treasury Department Consumer Credit Product Operation Department Senior Vice President Department Senior Vice President Mr. Chongrak Boonchayanurak * First Vice President Mr. Atipat Asawachinda * First Vice President Mr. Nimit Polchai * First Vice President Ms. Manaviga Piyapimook Mr. Chitcharoen Phichitkurugarn Ms. Nipaporn Roongrattanapitak Customer Relations Department Mr. Thitipat Na-Pombejra Senior Vice President Ms. Warunee Chumnansipet Financial Accounting Management Ms. Kwannet Rattanaprug * Mr. Wichai Yongchaitrakul Department Mr. Worawut Piyasachaboon Senior Vice President Private Wealth Management Ms. Wasana Surakit * Department Retail and SME Asset Quality Management Network Consumer Financial Planning Risk Asset Review Department Senior Vice President Senior Vice President Department Mr. Somchai Visitkitchakarn Ms. Sukonrat Bhurivatana * First Vice President First Vice President Mr. Chartree Klongnawee Ms. Visinee Samakasevee *Department Head ANNUAL REPORT 2007 249 Systems Division Cash and Payment Processing Process Development Department Department First Vice President First Vice President Ms. Soopanit Rojanasaranrom * Mr. Banjoed Jareyanukeja *

Information Management Facilities and Fixed Asset Department Management Department First Vice President Senior Vice President Ms. Apiwan Suttitossatum * Mr. Thamrong Nakornratanachai *

Information Technology Human Resource Management Department Division Senior Vice President Human Resource Management Ms. Orn-Anong Thonguthai * Department

Information Technology Planning Senior Vice President Department Ms. Duenpen Pawakranond * First Vice President First Vice President Ms. Pachana Rujirek Mr. Surose Petchakich * Ms. Siranee Phoophat

Information Technology Operation Department Employee Relations Department Senior Vice President First Vice President Mr. Thanawat Duang-Udom * Mr. Chalongchai Sasibutra * First Vice President Mr. Pennung Chaiyachit Treasury and Capital Markets Mr. Wiwat Rumratana Operation Department Senior Vice President Human Resource Development Ms. Chantana Soi-Ampornkun * Department First Vice President First Vice President Ms. Pensri Roungpong Ms. Passamon Vichitkamthorn

Credit Processing Department Ms. Sopa Noonate * Senior Vice President Mr. Yuthchai Chusakpakdee * First Vice President Ms. Chalida Sirampuj Mr. Sakchai Sombatsrisomboon

*Department Head

250 ANNUAL REPORT 2007 INVESTMENTS OF KASIKORNBANK IN OTHER COMPANIES As of December 31, 2007 The following is a list of companies in which KASIKORNBANK made investments, in the form of shareholding of 10 percent or more of the total number of shares issued.

Total Proportion Location of Total Type of Number of of Total Name of Company Corporate Number of Type of Share Business Paid-up Shares Held Headquarters Shares Held Shares (%)

1. PROGRESS KANPAI CO., LTD. Bangkok Services 200,000 200,000 100.00 Common Share Tel 0 2273 3900 Fax 0 2270 1262 2. PROGRESS PLUS CO., LTD. Bangkok Services 230,000 230,000 100.00 Common Share Tel 0 2225 2020 Fax 0 2225 2021 3. KASIKORN FACTORING CO., LTD. Bangkok Factoring 1,600,000 1,600,000 100.00 Common Share Tel 0 2290 2900 Fax 0 2276 9710 4. PROGRESS LAND AND BUILDINGS CO., LTD. Bangkok Real Estate 7,516,000 7,516,000 100.00 Common Share Tel 0 2275 1880 Fax 0 2275 1889 Development 5. KASIKORN RESEARCH CENTER CO., LTD. Bangkok Services 100,000 100,000 100.00 Common Share Tel 0 2273 1144 Fax 0 2270 1218 6. PROGRESS FACILITIES MANAGEMENT CO., LTD. Bangkok Services 50,000 50,000 100.00 Common Share Tel 0 2273 3288 91 Fax 0 2273 3292 7. PROGRESS MANAGEMENT CO., LTD. Bangkok Services 60,000 60,000 100.00 Common Share Tel 0 2275 1880 Fax 0 2275 1889-91 8. PROGRESS SOFTWARE CO., LTD. Bangkok Services 100,000 100,000 100.00 Common Share Tel 0 2225 7900-1 Fax 0 2225 5654-5 9. KASIKORN LEASING CO., LTD. Bangkok Leasing 90,000,000 90,000,000 100.00 Common Share Tel 0 2696 9999 Fax 0 2696 9988 10. KASIKORN ASSET MANAGEMENT CO., LTD. Bangkok Mutual Fund 27,154,274 27,154,274 100.00 Common Share Tel 0 2693 2300 Fax 0 2693 2320 Management 11. PROGRESS STORAGE CO., LTD. Bangkok Services 30,000 30,000 100.00 Common Share Tel 0 2273 3833 Fax 0 2271 4784 12. PROGRESS SERVICE CO., LTD. Bangkok Services 20,000 20,000 100.00 Common Share Tel 0 2273 3293-4 Fax 0 2273 3292 13. PROGRESS H R CO., LTD. Bangkok Services 10,000 10,000 100.00 Common Share Tel 0 2270 1070-6 Fax 0 2270 1068-9 14. PROGRESS APPRAISAL CO., LTD. Bangkok Services 5,000 5,000 100.00 Common Share Tel 0 2270 6900 Fax 0 2278 5035 15. PROGRESS SERVICE SUPPORT CO., LTD. Bangkok Services 40,000 40,000 100.00 Common Share Tel 0 2470 5420 Fax 0 2888 8882 16. PHETHAI ASSET MANAGEMENT CO., LTD. Bangkok Services 800,000,000 800,000,000 100.00 Common Share Tel 0 2694 5000 Ext. 5208 Fax 0 2694 5205 17. K-SME VENTURE CAPITAL CO., LTD. Bangkok Joint Venture 20,000,000 20,000,000 100.00 Common Share Tel 0 2693 2333 Fax 0 2693 2323

ANNUAL REPORT 2007 251 Total Proportion Location of Total Type of Number of of Total Name of Company Corporate Number of Type of Share Business Paid-up Shares Held Headquarters Shares Held Shares (%)

18. Khao Kla Venture Capital Management Co.,ltd. Bangkok Venture Capital 500,000 500,000 100.00 Common Share Tel 0 2693 2333 Fax 0 2693 2323 Management 19. Kasikorn Securities Public Co., Ltd. Bangkok Securities 60,000,000 59,995,762 99.99 Common Share Tel 0 2696 0000 Fax 0 2696 0099 20. Continental Petrochemical (Thailand) Co., Ltd. Samutprakarn Chemical 62,160 27,327 43.96 Preferred Share Tel 0 2315 1478 Fax 0 2315 2270 Industry 21. Fuel Pipeline Transportation Ltd. Bangkok Fuel Pipeline 7,960,000 2,481,138 31.17 Preferred Share Tel 0 2574 6180-3 Fax 0 2574 6101 Transportation 22. Processing Center Co., Ltd. Bangkok Services 100,000 30,000 30.00 Common Share Tel 0 2237 6330-4 Fax 0 2237 6340 23. Siam Phiwan Co., Ltd. Bangkok Services 1,000,000 298,700 29.87 Preferred Share Tel 0 2658 1000-19 Fax 0 2658 1020-1 24. N.c. Associate Co., Ltd. Bangkok Trading 10,000 2,823 28.23 Common Share Tel - Fax - 25. Rural Capital Partners Co., Ltd. Bangkok Joint Venture 1,000,000 275,000 27.50 Common Share Tel 0 2318 3958 Fax 0 2718 1850 26. Wta (Thailand) Co., Ltd. Bangkok Trading 1,000 249 24.90 Common Share Tel 0 2699 1609 Fax 0 2643 1881 27. M Grand Hotel Co., Ltd. Bangkok Hotel 100,000,000 20,000,000 20.00 Common Share Tel - Fax - 28. Unitas Co., Ltd. Bangkok Land Rental 110,532 21,152 19.14 Common Share Tel 0 2249 0491 Fax 0 2249 0503 29. National Itmx Co., Ltd. Bangkok Services 500,000 78,221 15.64 Common Share Tel 0 2650 6800 Fax - 30. Khunka Palang Thai Co., Ltd. Bangkok Energy & Utilities 10,000 1,538 15.38 Common Share Tel 0 2716 1600 Fax 0 2716 1488 31. Palang Thai Kaowna Co., Ltd. Bangkok Energy & Utilities 10,000 1,538 15.38 Common Share Tel 0 2716 1600 Fax 0 2716 1488 32. Misuho Corporation Leasing (Thailand) Co., Ltd. Bangkok Leasing 60,000 6,000 10.00 Common Share Tel 0 2638 0900 Fax 0 2638 0913 33. T S C Innovation Co., Ltd. Bangkok Tele- 30,000,000 3,000,000 10.00 Common Share Tel 0 2682 9700 Fax 0 2682 9709 communications 34. Zin Suapah Co., Ltd. Bangkok Services 6,000 600 10.00 Common Share Tel 0 2221 5895 Fax 0 2221 5895

252 ANNUAL REPORT 2007 Total Proportion Location of Total Type of Number of of Total Name of Company Corporate Number of Type of Share Business Paid-up Shares Held Headquarters Shares Held Shares (%)

35. Seacon Development Co., Ltd. Bangkok Services 5,740,000 574,000 10.00 Common Share Tel 0 2721 8888 Fax 0 2721 9444 36. Baan Somthavil Co., Ltd. Bangkok Real Estate 1,000,000 100,000 10.00 Common Share Tel 0 2332 0352-71 Ext. 2344 Fax 0 2332 0372-4 Development 37. Sun Valley Co., Ltd. Bangkok Real Estate 1,000,000 100,000 10.00 Common Share Tel 0 2226 3390-3 Fax 0 2222 9021 Development 38. Muangthai Fortis Holding Co., Ltd. Bangkok Holding 42,000,000 4,200,000 10.00 Common Share Tel 0 2274 9400 Ext. 4010 Fax 0 2276 1997-8 39. International Software Factory Co., Ltd. Bangkok Computer 5,000,000 500,000 10.00 Common Share Tel - Fax - 40. Advance Micro Tech Co., Ltd. Bangkok Machine 600,000 60,000 10.00 Common Share Tel 0 2739 4095-8 Fax 0 2739 4099 41. Wei Poa Co., Ltd. Hong Kong Agro-Industry 5,500,000 550,000 10.00 Common Share Tel - Fax - 42. Palit Palangngan Co., Ltd. Bangkok Energy & Utilities 10,000 1,000 10.00 Common Share Tel 0 2716 1600 Fax 0 2716 1488

ANNUAL REPORT 2007 253

OTHER INFORMATION • Reference Information • Major Shareholders • Awards and Commendations

Life of Comfort To provide personal convenience and comfort to our customers

REFERENCE INFORMATION KASIKORNBANK PCL conducts commercial banking business under the regulations of Thailand’s Commercial Banking Act and other related directives of the Bank of Thailand. Head Office : 1 Soi Kasikornthai, Ratburana Road, Bangkok 10140, Thailand Company Registration Number : 0107536000315 (formerly PCL 105) Telephone : 0 2222 0000 Fax : 0 2470 1144-5 K-Contact Center : 0 2888 8888 (Thai) 0 2888 8800 (English) 0 2800 8888 (Mandarin) Website : www.kasikornbankgroup.com

Names, Offices, Telephone and Fax Numbers of Referenced Entities Registrar - Ordinary Shares : Thailand Securities Depository Company Limited The Stock Exchange of Thailand Building 62 Ratchadaphisek, Klong Toei, Bangkok 10110 Tel. 0 2229 2800; Fax. 0 2359 1259

- KASIKORNBANK Subordinated : KASIKORNBANK PUBLIC COMPANY LIMITED Debentures No.3, due for redemption 1 Soi Kasikornthai, Ratburana Road, Bangkok 10140 in 2013 Tel. 0 2222 0000 - KASIKORNBANK Short-term Debentures Fax. 0 2470 1144-5 issued under KASIKORNBANK Short-term Debentures Project - Warrants for Ordinary Shares No.3, 4 and 5 (offered to employees) - KASIKORNBANK 8 1/4% Subordinated : The Bank of New York Mellon, Bonds due 2016 One Wall Street New York, N.Y. 10286 U.S.A. Tel. (1) 212 495 1784; Fax. (1) 212 495 1245

Auditors : Mr. Winid Silamongkol, CPA No.3378 Mr. Thirdthong Thepmangkorn, CPA No.3787 Ms. Wilai Buranakittisopon, CPA No.3920 KPMG Phoomchai Audit Limited Empire Tower 50-51 Floor, 195 South Sathorn Road, Yannawa, Sathorn District, Bangkok 10120 Tel. 0 2677 2000; Fax. 0 2677 2222

Legal Adviser : Dr. Abhijai Chandrasen 22 Soi Soonthornsaratoon (On Nut 21/1), Sukhumvit 77, Suan Luang District, Bangkok 10250 Tel. 0 2730 6969-76; Fax. 0 2730 6967-8

256 ANNUAL REPORT 2007 MAJOR SHAREHOLDERS At the closing registration date for determining the right to receive dividend on September 13, 2007

Percentage of Rank Name Number of common shares common shares 1 The Stock Exchange of Thailand 377,872,397 15.82 2 State Street Bank and Trust Company 185,856,059 7.78 3 Thai NVDR Co., Ltd 119,135,000 4.99 4 Chase Nominees Limited 42 108,919,181 4.56 5 HSBC Bank Plc - Clients General A/C 67,673,005 2.83 6 Nortrust Nominees Ltd 57,306,528 2.40 7 Mellon Bank, N.A. 47,938,222 2.01 8 HSBC (Singapore) Nominees Pte Ltd 36,990,139 1.55 9 Mr. Bhanapot Damapong 28,900,000 1.21 10 State Street Bank and Trust Company, for London 27,812,107 1.16 11 Others 1,329,566,675 55.68 Total paid-up capital 2,387,969,313 100.00

Thai shareholders 1,218,483,424 51.03 Foreign shareholders 1,169,485,889 48.97

KASIKORNBANK’s common shares at September 13, 2007 Registered capital 3,048,614,697 shares, at Baht 10 per share, totaling Baht 30,486,146,970 Paid-up capital 2,387,969,313 shares, at Baht 10 per share, totaling Baht 23,879,693,130

KASIKORNBANK’s common shares at December 31, 2007 Registered capital 3,048,614,697 shares, at Baht 10 per share, totaling Baht 30,486,146,970 Paid-up capital 2,388,202,317 shares, at Baht 10 per share, totaling Baht 23,882,023,170

Note: The above data do not include 5,057,876 shares exercised in December 2007, from the warrants allocated to employees (excluding directors) under the ESOP program, that were paid up and registered with the Ministry of Commerce. On January 10, 2008, the Bank’s paid-up capital totaled Baht 23,932,601,930.

ANNUAL REPORT 2007 257 AWARDS AND COMMENDATIONS In 2007, many honorary awards and commendations have been given to KASIKORNBANK, which reflect the Bank’s achievements in business.

In Recognition of Management • “Best Domestic Bank” from The Asset magazine • Voted for Best Corporate Governance in the survey • “Best Bank” from Alpha Southeast Asia magazine conducted by FinanceAsia magazine. KASIKORNBANK • “Bank of the Year 2007” from The Interest magazine was among the top three companies in Thailand • “Financial Management Excellence Award” from the that earned the highest scores and ranked first among Thailand Corporate Excellence Awards program, Thai commercial banks. organized by the Thailand Management Association • “Best Investor Relations” from FinanceAsia magazine and Sasin Graduate Institute of Business Administration, • “Best Shareholder Treatment Award” from the Chulalongkorn University Shareholder Awards 2007 event co-organized by • “Corporate Governance Asia Recognition Awards Thailand Securities Depository Co., Ltd., Thai Investors 2007” from Corporate Governance Asia magazine Association, Listed Companies Association and Thai • Received the following recognition from the Corporate Investor Relations Club. Governance Poll 2007 conducted by Asiamoney • Rated as “Excellent” and commended for exemplary magazine: practices in Annual General Meeting (AGM) arrangement • Rank 3rd for Best Companies in Asia for Corporate for two successive years, as part of the 2007 AGM Quality Governance Assessment Project initiated by the Office of the • 6 country awards Securities and Exchange Commission (SEC). 1. Best Overall for Corporate Governance 2. Best for Disclosure and Transparency 3. Best for Responsibilities of Management and the Board of Directors 4. Best for Shareholders’ Rights and Equitable Treatment 5. Best for Investor Relations 6. Best Investor Relations Officer

The President represented the Bank in receiving the “Financial Management Alpha Southeast Asia magazine presenting the Bank’s executives Excellence Award” at the Thailand Corporate Excellence Awards program with the “Best Bank in Thailand” award

258 ANNUAL REPORT 2007 The CEO represented the Bank in receiving the “Excellence in SME KBank’s awards from various reputable organizations in 2007 Banking Award” from The Asian Banker magazine

In Recognition of Service • “Excellence in SME Banking Award” from The Asian • Asiamoney Structured Products Poll 2007 conducted Banker Excellence in Retail Financial Service Awards by Asiamoney magazine presented KBank with 2 awards 2007 event organized by The Asian Banker magazine 1. Best Domestic Providers for Local Currency • “Best Cash Management Bank of Thailand” from The Products-Structured Currency Products Asset magazine 2. Best Domestic Providers for Local Currency • “Best Cash Management Bank” from Alpha Southeast Products-Structured Interest-rate Products Asia magazine • Quality Recognition Awards from two leading banks • “Best Domestic Debt House” in Thailand, from Asiamoney due to effective international funds transfer Poll 2007 conducted by Asiamoney magazine transactions both for the purpose of bill payments of • “Best Thailand Deal” from FinanceAsia magazine general customers and for interbank settlements and • “Best Local Currency Bond Deal of the Year in collections. Among these awards received in 2007 were: Southeast Asia” from Alpha Southeast Asia magazine • 2006 In Recognition of Outstanding Payment for • Rated as the Top Bank in Sell-side for Thai Baht Formatting and Straight-Through Rate, from by Government Bonds in the Asian Currency Bond The Bank of New York Benchmark Survey conducted by The Asset magazine • Quality Recognition Awards from JPMorgan Chase: • Asiamoney FX Poll 2007 conducted by Asiamoney 1. 2006 Quality Recognition Awards U.S. Dollar magazine presented KBank with 4 awards as follows: Clearing MT 103 1. Best Domestic Providers of FX Services as voted 2. 2006 Quality Recognition Awards U.S. Dollar by Corporates Clearing MT 202 2. Best Single-Bank Electronic Trading Platform 3. Best for Innovative FX Products and Structured Ideas 4. Best FX Prime Broking Services

ANNUAL REPORT 2007 259

KASIKORNBANKGROUP

KASIKORNBANK • Domestic Branch • Foreign Exchange Booth • Signature Exclusive Center • Business Banking Center • Corporate Business Center • SME Business Center • Overseas Office K Companies

Business with No Limits To facilitate our customers’ growth and success in their business

KASIKORNBANK

Head Office Address: 1 Soi Kasikornthai, Ratburana Road, Bangkok 10140, Thailand Telephone: 0 2222 0000 Facsimile: 0 2470 1144-5 K-Contact Center: 0 2888 8888 (Thai), 0 2888 8800 (English), 0 2800 8888 (Mandarin) TELEX: 81159 KBANK TH, 82542 KBANK TH, 84749 KBANK TH SWIFT: KASITHBK Website: www.kasikornbankgroup.com

FINANCIAL SERVICING BRANCHES AND OFFICES Domestic Branch 604 Branches 1. Bangkok Branch 199 Branches 2. Upcountry Branch 405 Branches K-Lobby Branch 26 Branches (Electronic banking branch) Foreign Exchange Booth 71 Booths Signature Exclusive Center 5 Centers (Providing exclusive services to our Signature customers) Signature Corner 5 Corners (Special reception corners for our Signature customers) K-WePlan Center 1 Center (Personal Financial Planning Center) Business Banking Center (Providing one-stop business banking services) 1. Business Banking Service 34 Services (Financial transaction services for domestic businesses) 2. International Trade Service 40 Services (Import-export services and other international trade services) 3. Cheque Direct Service 12 Services (Arranging cheque payment on behalf of customers and express cheque issuance for customers) Corporate Business Center 9 Centers SME Business Center 61 Centers Overseas Offices 7 Offices

262 ANNUAL REPORT 2007 DOMESTIC BRANCH

199 Bangkok Branches Business Hours: Monday-Friday 8.30 - 15.30 hrs.

No. Branch Tel. Fax. No. Branch Tel. Fax. 1 Ban Thad Thong 0 2215 4674-5 0 2215 5971 55 Prawet 0 2726 0484-7 0 2726 0494 2 Bang Bon 0 2899 8330-7 0 2416 4396 56 Rat Burana Main Branch 0 2871 3650-5 0 2871 3645 3 Bang Khae 0 2801 0610-9 0 2454 2891 57 Ratchadamri 0 2253 4997-9 0 2253 1423 4 Bang Khen 0 2930 1234-7 0 2513 9040 58 Ratchawat Sub-Branch 0 2243 7815-7 0 2668 5637 5 Bang Khun Non 0 2882 5818 0 2882 5495 59 Samre 0 2438 0050-1 0 2437 8236 6 Bang Khun Thian 0 2878 0023-4 0 2878 0526 60 Sanam Pao 0 2617 2315-6 0 2617 2842 7 Bang Krabu 0 2669 0870-6 0 2669 0877 61 Sao Chingcha 0 2622 0034-6 0 2622 1344 8 Bang Lamphu 0 2281 5187-90 0 2629 0947 62 Saphan Krung Thon 0 2883 0172-9 0 2433 4554 9 Bang Mot 0 2870 0224-30 0 2428 2025 63 Saphan Luang 0 2611 6183-6 0 2215 9240 10 Bang Pakok 0 2874 4764-5 0 2428 3523 64 Saphan Mai Don Muang 0 2972 5512-20 0 2552 6544 11 Bang Phlat 0 2885 3333-6 0 2434 6197 65 Saphan Phut 0 2623 7504-8 0 2623 7613 12 Bang Pho 0 2912 6790-3 0 2585 7700 66 Si Wara Town in Town 0 2559 0080-2 0 2559 0086 13 Bang Rak 0 2630 6370-7 0 2266 7540 Sub-Branch 14 Bang Son 0 2910 8768-9 0 2587 0094 67 Si Yaek Bang Na 0 2745 2900-5 0 2393 5546 15 Bang Su 0 2587 0219-21 0 2587 0652 68 Si Yaek Ratchawong 0 2225 6527-9 0 2225 5753 16 Bang Yikhan 0 2883 0163-9 0 2433 1337 Sub-Branch 17 Bukkhalo 0 2877 6689-96 0 2477 2812 69 Si Yaek Saphan Krung Thep 0 2689 0092-8 0 2689 0694 18 Chakkrawat 0 2225 5807-8 0 2225 9675 70 Si Yaek Thanon Chan-Liab 0 2678 4101-4 0 2678 4105 19 Charansanitwong 11 0 2412 0068-71 0 2412 8296 Khlong Chong Nonsi 20 Chok Chai 4 Sub-Branch 0 2539 8735-7 0 2530 4584 Sub-Branch 21 Chong Nonsi Sub-Branch 0 2285 2071-3 0 2678 0844 71 Si Yaek Tossakan Sub-Branch 0 2410 3503-4 0 2410 3887 22 Dao Khanong 0 2877 5671-2 0 2476 4463 72 Si Yaek Wang Hin 0 2940 4824-8 0 2940 4840 23 Din Daeng Sub-Branch 0 2248 1841 0 2248 1843 73 Siangkong 0 2639 4041-5 0 2237 4990 24 Ekkamai 0 2714 1081-8 0 2714 0410 74 Silom Main Branch 0 2232 5001 0 2234 7445 25 Hua Mak 0 2732 2560-3 0 2375 6487 75 Silom Soi 22 Sub-Branch 0 2235 2540-4 0 2235 2545 26 Huai Khwang 0 2692 1375-9 0 2276 1820 76 Soi Chalaem Nimit (Pha Du 1) 0 2688 4250-4 0 2291 1079 27 Khlong Chan 0 2733 7136-40 0 2733 7141 77 Soi Charurat 0 2651 7093-8 0 2253 3537 28 Khlong San 0 2437 0260-2 0 2439 3344 78 Soi Kubon Sub-Branch 0 2509 2169-70 0 2509 2680 29 Khlong Tan 0 2717 8870-3 0 2319 8352 79 Soi Thong Lo Sub-Branch 0 2712 8770-2 0 2390 0457 30 Khlong Toei 0 2671 2042-7 0 2249 5011 80 Soi Udomsuk Sub-Branch 0 2361 7666-7 0 2361 7668 31 King Phet 0 2612 0463-74 0 2612 1550 81 Song Prapha-Don Muang 0 2566 4345-6 0 2566 4347 32 Kluai Nam Thai 0 2367 3111-7 0 2367 3109 Sub-Branch 33 Lat Krabang 0 2739 0187-94 0 2326 7198 82 Southern Bus Terminal Phuttha 0 2894 6020-4 0 2894 6025 34 Lat Phrao 10 0 2938 7425-9 0 2512 5565 Monthon Sai 1 Sub-Branch 35 Lat Phrao 25 0 2938 3040-2 0 2513 1603 83 Suan Chatuchak 0 2617 6040-7 0 2272 0857 36 Lat Phrao 67 0 2933 0960-8 0 2539 3273 84 Suan Mali Sub-Branch 0 2224 5970-1 0 2224 6173 37 Lat Phrao 71 Sub-Branch 0 2530 3866-9 0 2530 3624 85 Suan Phlu 0 2679 4246-53 0 2213 1362 38 Lat Phrao 99 0 2530 0545-7 0 2530 0548 86 Sukhaphiban 1 (Bang Bon) 0 2454 4331-2 0 2454 4333 39 Maha Phruttharam 0 2639 0740-9 0 2236 5566 Sub-Branch 40 Min Buri 0 2918 7708-12 0 2518 1475 87 Sukhumvit 101 0 2741 7661-5 0 2741 8352 41 Na-Na Nua 0 2655 0735-7 0 2253 0298 88 Sukhumvit 15 Sub-Branch 0 2253 7381-5 0 2253 7386 42 Nang Loeng 0 2629 8810-7 0 2629 9379 89 Sukhumvit 57 0 2714 1089-93 0 2390 0784 43 On Nut 0 2742 5080-4 0 2332 5285 90 Surawong 0 2639 4056-60 0 2639 0927 44 On Nut 39 Sub-Branch 0 2322 6514-5 0 2721 3031 91 Sutthisan 0 2616 9990-5 0 2616 9997 45 Phahon Yothin Main Branch 0 2273 3337 0 2273 1399 92 Suwinthawong Nong Chok 0 2988 0680-5 0 2988 0692 46 Phasi Charoen 0 2869 7462-7 0 2869 7128 93 Talat Phattanakan Sub-Branch 0 2321 7426-7 0 2321 7425 47 Phat Phong 0 2637 0041-8 0 2637 0477 94 Talat Phlu 0 2891 4022-9 0 2891 4278 48 Phetkasem 51 0 2801 3626-9 0 2454 2975 95 Talat Wongsakon Sai Mai 0 2563 4357-61 0 2563 4362 49 Pho Sam Ton 0 2891 0037-8 0 2465 4660 Sub-Branch 50 Phra Khanong 0 2711 0203-8 0 2711 1682 96 Taopoon Sub-Branch 0 2911 3126-8 0 2911 3129 51 Phran Nok 0 2866 1323-7 0 2866 1328 97 Tha Phra 0 2868 0125-35 0 2457 8812 52 Pin Klao 0 2884 6380-90 0 2433 9920 98 Tha Rua Sathu Pradit 0 2295 0123-5 0 2294 6661 53 Pracha Niwet 1 Sub-Branch 0 2954 3334-7 0 2589 2914 99 Thai Airways International 0 2513 6243-6 0 2513 6982 54 Pratu Nam Pathum Wan 0 2208 0112-7 0 2208 0096 Sub-Branch

ANNUAL REPORT 2007 263 Business Hours: Monday-Friday 8.30 - 15.30 hrs.

No. Branch Tel. Fax. No. Branch Tel. Fax. 100 Thanon Asok Din Daeng 0 2641 8660-2 0 2247 7552 140 Wat Sai 0 2893 6285-93 0 2416 5371 101 Thanon Bang Na-Trat Km.4 0 2397 3570-2 0 2397 3568 141 Wong Waen Rob Nok 0 2899 6930-9 0 2416 0356 102 Thanon Chan 0 2212 9788-9 0 2673 0438 (Ekkachai-Bang Bon) 103 Thanon Charoen Nokorn 36 0 2862 7920-2 0 2862 7924 142 Wong Wian 22 Karakada 0 2623 0030-2 0 2224 9860 Sub-Branch 143 Worachak 0 2621 0244-7 0 2621 0064 104 Thanon Charoen Rat Sub-Branch 0 2437 0256-8 0 2437 0259 144 Yan Nawa 0 2675 5120-7 0 2212 3281 105 Thanon Lan Luang 0 2628 1391-6 0 2628 1406 145 Yotse 0 2224 6075-6 0 2224 4819 106 Thanon Lang Suan 0 2652 0240-2 0 2652 1987 107 Thanon Lat Ya 0 2861 4415-25 0 2438 0538 108 Thanon Maha Chai 0 2621 0764-6 0 2226 4805 Business Hours: Monday-Friday 8.30 - 18.00 hrs. 109 Thanon Padiphat 0 2618 4168-70 0 2618 6042 No. Branch Tel. Fax. 110 Thanon Phanit Chayakan 0 2865 7364-5 0 2865 7367 Thonburi Sub-Branch 146 All Seasons Place Sub-Branch 0 2251 4610-4 0 2251 4615 111 Thanon Phattanakan 0 2321 3373-4 0 2322 2589 147 Sukhumvit 33 (Bang Kapi) 0 2261 0151-7 0 2261 0164 112 Thanon Phetchaburi Tat Mai 0 2318 4700-1 0 2716 5209 113 Thanon Pracha Chun 0 2586 9352-3 0 2586 0757 Business Hours: Monday-Friday 9.00 - 17.00 hrs. 114 Thanon Pracha Uthit 0 2428 7390-2 0 2428 3987 115 Thanon Ram Intra 0 2552 3060-2 0 2971 6515 No. Branch Tel. Fax. 116 Thanon Rama II 0 2894 0274-7 0 2416 5554 148 Asok Sub-Branch 0 2204 0188-92 0 2204 0193 117 Thanon Rama III 0 2683 4250-63 0 2683 4264 149 Sukhumvit 21 (Serm Mit 0 2260 0112-6 0 2260 0117 118 Thanon Rama IX 0 2719 6809-16 0 2318 4820 Tower Building) Sub-Branch 119 Thanon Ramkham Haeng 0 2314 1871-2 0 2314 1873 150 Thanon Narathiwat Rat 0 2237 9858-62 0 2237 9863 Sub-Branch Nakharin Sub-Branch 120 Thanon Rang Nam 0 2642 4611-6 0 2640 0128 151 United Center Sub-Branch 0 2231 1204-8 0 2231 1209 121 Thanon Ratchada Phisek 0 2264 0213-6 0 2264 0221 (Sukhumvit-Rama IV) 122 Thanon Ratchada Phisek 0 2476 8856-8 0 2476 8862 Business Hours: Monday-Friday 10.00 - 18.00 hrs. (Taksin-Tha Phra) 123 Thanon Ratchada Phisek 0 2693 2460-9 0 2693 2472 No. Branch Tel. Fax. Huai Khwang 152 Silom Soi 1 Sub-Branch 0 2237 1902-6 0 2237 1907 124 Thanon Sathon 0 2633 8013-6 0 2633 8018 125 Thanon Sathu Pradit 0 2674 0164-71 0 2212 2900 126 Thanon Sirinthon Sub-Branch 0 2881 9818 0 2423 0918 Business Hours: Monday-Friday 11.00 - 19.00 hrs. 127 Thanon Sri Nakharin Km.9 0 2393 5850-4 0 2361 7236 No. Branch Tel. Fax. Sub-Branch 128 Thanon Sua Pa Main Branch 0 2221 3131-8 0 2225 6573 153 Thanon Phetchaburi Tat Mai 0 2369 1834-8 0 2369 1839 129 Thanon Suk Sawat 0 2877 0350-5 0 2877 1090 (Italthai Tower) Sub-Branch 130 Thanon Sukhaphiban 1 0 2374 0269-72 0 2375 0986 154 Si Yaek Kaset Sub-Branch 0 2561 5231-2 0 2561 5475 Bang Kapi 155 Union Mall Lat Phrao Sub-Branch 0 2511 1227-8 0 2511 1342 131 Thanon Sukhaphiban 2 0 2518 2040-1 0 2518 2043 Suan Siam 132 Thanon Sukhaphiban 3 0 2373 0981-3 0 2373 0985 Business Hours: Daily 8.30 - 18.00 hrs. Bung Kum No. Branch Tel. Fax. 133 Thanon Sukhumvit 55 0 2714 7981-3 0 2714 7879 (Soi Thong Lo 4) Sub-Branch 156 Thanam Ratchawong 0 2224 5490-1 0 2224 9244 134 Thanon Witthayu 0 2252 2177-9 0 2252 2055 Sub-Branch 135 Thanon Wutthakat Sub-Branch 0 2875 4536 0 2875 4535 157 Thanon Mangkon Sub-Branch 0 2224 5070-1 0 2224 5178 136 Thewet 0 2281 4182-3 0 2628 5050 137 Thiam Ruam Mit Sub-Branch 0 2274 4200 0 2274 4203 Business Hours: Monday-Friday 8.30 - 15.30 hrs., 138 Thon Buri 0 2861 4357-64 0 2438 9921 Saturday-Sunday 8.30 - 19.30 hrs. 139 Thung Kru Sub-Branch 0 2873 5140-1 0 2873 5144 No. Branch Tel. Fax. 158 Chatuchak Plaza Sub-Branch 0 2265 9502-6 0 2265 9507

264 ANNUAL REPORT 2007 Business Hours: Monday-Friday 8.30 - 18.00 hrs., Saturday-Sunday 11.00 - 18.00 hrs. Business Hours: Daily 10.30 - 20.00 hrs.

No. Branch Tel. Fax. No. Branch Tel. Fax. 159 Wang Burapha 0 2623 7681-90 0 2225 0344 168 Esplanade Ratchadaphisek 0 2660 9224-8 0 2660 9229 Sub-Branch Business Hours: Daily 9.00 - 16.00 hrs. Business Hours: Daily 11.00 - 19.00 hrs. No. Branch Tel. Fax. 160 Bo Bae Tower Sub-Branch 0 2282 9674-6 0 2282 9803 No. Branch Tel. Fax. 169 Big-C Rat Burana Sub-Branch 0 2873 1268 0 2873 1269 170 Central Bang Na Sub-Branch 0 2398 7240-2 0 2398 8483 Business Hours: Monday-Friday 9.00 - 16.00 hrs., 171 Central Chit Lom Sub-Branch 0 2255 4804-8 0 2255 4809 Saturday-Sunday 10.00 - 17.00 hrs. 172 Central Lat Phrao 2 Sub-Branch 0 2541 1631-4 0 2541 1635 173 Central Lat Phrao Sub-Branch 0 2541 1543-5 0 2541 1548 No. Branch Tel. Fax. 174 Central Pinklao Sub-Branch 0 2424 3595-6 0 2424 2834 161 Yaowarat 0 2623 0016-9 0 2226 4806 175 Central Rama II Sub-Branch 0 2872 4250-2 0 2872 4555 176 Central Rama III Sub-Branch 0 2673 6338-9 0 2673 6240 Business Hours: Daily 9.00 - 18.00 hrs. 177 Central Ramindra Sub-Branch 0 2521 2813-4 0 2521 1140 178 Central World Sub-Branch 0 2251 0231-5 0 2251 0236 No. Branch Tel. Fax. 179 Fashion Island Ram Indra 0 2519 4813-6 0 2519 4817 180 Happy Land IT Sub-Branch 0 2704 9050-4 0 2704 9056 162 Khlong Thom Sub-Branch 0 2221 3239-40 0 2221 3868 181 IT Square Sub-Branch 0 2576 0691-5 0 2576 0696 182 JJ Mall Suan Chatuchak 0 2265 9538-42 0 2265 9543 Business Hours: Monday-Tuesday 9.30 - 15.30 hrs., Sub-Branch Wednesday-Friday 9.00 - 17.00 hrs., 183 Lotus Rama I Sub-Branch 0 2219 1836-40 0 2219 1842 Saturday-Sunday 7.30 - 20.00 hrs. 184 Lotus Rama IV Sub-branch 0 2672 7953 0 2671 4661 185 Mahboonkrong Center 0 2216 4820 0 2216 4821 No. Branch Tel. Fax. Sub-Branch 163 Suan Chatuchak Weekend 0 2272 4790-3 0 2272 4802 186 Money Park Mahboonkrong 0 2686 3940-2 0 2686 3943 Market Sub-Branch Center Sub-Branch 187 Phetkasem Avenue Bang Khae 0 2809 2747-8 0 2809 3313 Sub-Branch Business Hours: Monday-Friday 9.30 - 16.30 hrs., 188 Pradit Manutham Sub-Branch 0 2515 0506-10 0 2515 0511 Saturday-Sunday 10.00 - 18.00 hrs. 189 Robinson Ratchada Phisek 0 2248 6923-7 0 2248 6928 Sub-Branch No. Branch Tel. Fax. 190 Seacon Square 0 2721 8554-61 0 2721 8562 164 Thanon Phetchaburi 17 0 2255 5320-4 0 2255 5325 191 Soi Watcharaphon Sub-Branch 0 2509 0013-4 0 2509 0019 Sub-Branch 192 The Mall Bang Kapi Sub-Branch 0 2374 4261-3 0 2374 7298 193 The Mall Bang Khae Sub-Branch 0 2454 9023-6 0 2454 9027 Business Hours: Daily 10.00 - 18.00 hrs. 194 Wong Sawang Town Center 0 2586 7624-7 0 2586 9821 Sub-Branch No. Branch Tel. Fax. 165 Save-E Buddha Monthon 0 2447 9461-5 0 2447 9494 Business Hours: Daily 11.00 - 19.30 hrs. Sai 2 Pin Klao Sub-Branch 166 Siam Square 0 2658 1755-9 0 2658 1754 No. Branch Tel. Fax. 195 Victory Monument Sub-Branch 0 2644 6879-80 0 2644 6881 Business Hours: Daily 10.00 - 19.30 hrs.

No. Branch Tel. Fax. Business Hours: Daily 11.00 - 20.00 hrs. 167 Big-C Saphankhwai 0 2616 7468-70 0 2616 7471 No. Branch Tel. Fax. Sub-Branch 196 Carrefour Rama IV Sub-Branch 0 2259 7132-6 0 2259 7137 197 Lotus Sukhaphiban 1 0 2947 9271-3 0 2947 9103 Sub-Branch 198 Siam Paragon Sub-Branch 0 2610 9404-8 0 2610 9409 199 The Mall Tha Phra Sub-Branch 0 2477 7343-7 0 2477 7348

ANNUAL REPORT 2007 265 405 Upcountry Branches

Central 125 Branches Business Hours: Monday-Friday 8.30 - 15.30 hrs.

No. Branch Tel. Fax. No. Branch Tel. Fax. Ang Thong 41 Lat Lum Kaeo 0 2979 3434 0 2979 3131 1 Ang Thong 0 3561 1306-7 0 3561 1346 42 Nava Nakorn 0 2909 1123-5 0 2529 2904 2 Pa Mok 0 3566 1235-6 0 3566 1237 43 Pathum Thani 0 2978 0112-8 0 2581 1773 3 Wiset Chai Chan 0 3563 1242 0 3563 1262 44 Rangsit 0 2959 0001-10 0 2531 4124 Chai Nat 45 Talat Si Mum Muang-Rangsit 0 2536 7176-9 0 2536 7171 4 Chai Nat 0 5641 1264 0 5641 1331 Phetchaburi 5 Hankha 0 5645 1373-5 0 5645 1378 46 Ban Laem 0 3245 0692-4 0 3248 1118 6 Sankhaburi 0 5648 1362-3 0 5648 1004 47 Cha-Am 0 3243 3894-6 0 3247 1409 7 Wat Sing 0 5646 1080-3 0 5646 1085 48 Phetchaburi 0 3242 6111-3 0 3242 6245 Kanchana Buri 49 Tha Yang 0 3246 1444 0 3246 1222 8 Tha Rua 0 3463 6859-60 0 3456 1994 Phra Nakhon Si Ayutthaya 9 Kanchanaburi 0 3451 1203 0 3451 2382 50 Ayutthaya 0 3525 2260-2 0 3525 2256 Lop Buri 51 Phak Hai 0 3539 1299 0 3539 1298 10 Ban Mi 0 3662 8729-32 0 3647 1675 52 Pratu Nam Phra In 0 3521 9524-7 0 3536 1123 11 Khok Samrong 0 3644 1117 0 3644 1581 53 Rojana Industrial Park 0 3533 2281-5 0 3533 2286 12 Lam Narai 0 3646 1151-2 0 3646 1153 Sub-Branch 13 Nong Muang 0 3664 8452-6 0 3643 1103 54 Sena 0 3521 7332-4 0 3520 1551 14 Thanon Surasongkhram Lop Buri 0 3661 7280 0 3641 3761 55 Thanon Rojana Ayutthaya 0 3521 3870-2 0 3521 3875 15 Wong Wian Sa Kaeo Lop Buri 0 3661 3770-1 0 3641 3733 56 Wang Noi 0 3521 5286-8 0 3521 5289 Nakhon Nayok Prachuap Khiri Khan 16 Nakhon Nayok 0 3732 1159-64 0 3731 1854 57 Bang Saphan 0 3254 8435-7 0 3269 1249 17 Ongkharak 0 3739 1486-90 0 3739 1492 58 Hua Hin 0 3251 1775-6 0 3251 2585 Nakhon Pathom 59 Prachuap Khiri Khan 0 3255 0933-5 0 3261 1101 18 Huai Phlu 0 3423 9662-4 0 3438 9121 60 Pran Buri 0 3262 1992-3 0 3262 1942 19 Nakhon Pathom 0 3425 3822-9 0 3425 2510 61 Sam Roi Yot 0 3268 8551-2 0 3268 8553 20 Om Yai 0 2420 5561-5 0 2420 8607 62 Thap Sakae 0 3254 6686-8 0 3267 1212 21 Sam Phran 0 3422 5649-51 0 3432 2990 Ratchaburi 22 Talat Ong Phra Pathom Chedi 0 3427 3469-71 0 3427 3209 63 Ban Pong 0 3234 4679-80 0 3220 1193 Sub-Branch 64 Ratchaburi 0 3231 4054-5 0 3232 5834 23 Thanon Phetkasem Nakhon 0 3423 0513-6 0 3423 0517 65 Thanon Srisuriyawong 0 3231 0630-3 0 3231 0634 Chaisi Sub-Branch Ratchaburi Sub-Branch 24 Thanon Phetkasem Nakhon 0 3421 3387-9 0 3421 3390 Samut Prakan Pathom 66 Bang Bo 0 2338 1184-7 0 2338 1113 Nonthaburi 67 Bang Khru 0 2463 6314-6 0 2463 4549 25 Bang Bua Thong Sub-Branch 0 2571 5214-8 0 2571 5219 68 Bang Mek Khao 0 2703 8524-31 0 2387 2779 26 Bang Kruai 0 2879 3060-6 0 2447 0696 69 Bang Phli 0 2751 0650-4 0 2316 7827 27 Bang Yai 0 2921 1145-56 0 2594 0626 70 Khlong Dan 0 2707 3087 0 2330 1136 28 Bang Yai Night Bazaar 0 2595 0401-3 0 2595 0790 71 Phra Pradaeng 0 2818 0990-9 0 2463 1976 Sub-Branch 72 Phra Samut Chedi 0 2819 7747-50 0 2819 7967 29 Nonthaburi 0 2967 4023-30 0 2967 2006 73 Pu Chao Saming Phrai 0 2754 3348-52 0 2754 5531 30 Pak Kret 0 2960 8940-5 0 2583 8919 74 Samrong (Pu Chao Center) 0 2757 8963-8 0 2384 3413 31 Talat Amphoe Bang Kruai 0 2883 6218-9 0 2883 6222 75 Samut Prakan 0 2395 3000-2 0 2701 7805 Sub-Branch 76 Talat Bang Bo 0 2708 4056-7 0 2338 1188 32 Talat Bang Yai Sub-Branch 0 2595 1261-3 0 2595 1264 77 Talat Nam Daeng Sub-Branch 0 2754 7160-1 0 2754 7844 33 Thanon Chaeng Watthana 0 2982 9760-5 0 2982 9934 78 Talat Samut Prakan Sub-Branch 0 2387 0995 0 2387 1794 34 Thanon Ngam Wong Wan 0 2591 7895-7 0 2589 5091 79 Thanon Bang Na-Trad Km.18 0 2740 6611-8 0 2740 6623 35 Thanon Samakee Sub-Branch 0 2573 6191 0 2573 8542 80 Thanon King Kaeo Samut 0 2738 8025-6 0 2738 8216 36 Thanon Tiwanon (Khae Rai) 0 2589 0030-3 0 2580 2838 Prakan Sub-Branch 37 Tiwanon 8 0 2965 9070-8 0 2965 9086 81 Thanon Sri Nakharin Km.15 0 2385 7901-2 0 2385 7149 Pathum Thani Sub-Branch 38 Khlong 2 Thanyaburi Sub-Branch 0 2996 0772-3 0 2996 0774 82 Thanon Sri Nakharin Km.17 0 2385 6968-71 0 2385 6977 39 Khlong 6 Thanyaburi 0 2577 2360-3 0 2577 2366 83 Thanon Thepharak 0 2758 2403-5 0 2394 6966 40 Khlong Luang 0 2516 2130-1 0 2516 2998

266 ANNUAL REPORT 2007 Business Hours: Monday-Friday 8.30 - 15.30 hrs., Saturday 9.00 - 15.30 hrs.

No. Branch Tel. Fax. No. Branch Tel. Fax. Samut Sakhon Samut Sakhon 84 Ban Phaeo Lak Sam 0 3485 0597-9 0 3448 1463 111 Talat Samut Sakhon Sub-Branch 0 3442 7138 0 3442 7137 85 Krathum Baen Samut Sakhon 0 3447 2006-7 0 3447 9503 Sub-Branch 86 Om Noi Sub-Branch 0 2420 1571 0 2420 2364 Business Hours: Daily 9.00 - 18.00 hrs. 87 Phutta Monthon Sai 4 0 2813 1701-7 0 2420 9978 No. Branch Tel. Fax. 88 Samut Sakhon 0 3481 1087-91 0 3442 3013 Pathum thani 89 Thanon Ekkachai-Photchae 0 3449 4551-4 0 3449 5002 112 Talat Thai Sub-Branch 0 2529 5697 0 2529 5550 Sub-Branch 90 Thanon Setthakit 1 Samut Sakhon 0 3481 6662-9 0 3481 6671 Samut Songkhram Business Hours: Monday-Friday 9.30 - 19.00 hrs., 91 Samut Songkhram 0 3471 1522-3 0 3471 2433 Saturday-Sunday 11.00 - 19.00 hrs. Saraburi No. Branch Tel. Fax. 92 Kaeng Khoi Saraburi Sub-Branch 0 3624 5429-33 0 3624 5434 Nonthaburi 93 Nong Khae 0 3632 6281-5 0 3632 6290 113 Central Rattanathibet 0 2969 8085-90 0 2969 8091 94 Phra Phutthabat 0 3626 6716-7 0 3626 6998 95 Saraburi 0 3622 0414-8 0 3622 0422 96 Thanon Sutbanthad Saraburi 0 3622 1132-3 0 3622 1941 Business Hours: Daily 11.00 - 19.00 hrs. Sing Buri No. Branch Tel. Fax. 97 In Buri 0 3658 1490 0 3658 1722 Lop Buri 98 Sing Buri 0 3652 0035-7 0 3651 1308 114 Big-C Lop Buri Sub-Branch 0 3661 5762-3 0 3661 6113 99 Talat Channasut Bang Rachan 0 3659 1478 0 3659 1479 Nakhon Pathom 100 Tha Chang 0 3653 6265-6 0 3659 5237 115 Lotus Samphran Sub-Branch 0 3431 2134-8 0 3431 2139 Suphan Buri Nonthaburi 101 Dan Chang 0 3559 5013 0 3559 5252 116 Muang Thong Thani Sub-Branch 0 2980 6055-9 0 2980 6060 102 Doembang Nangbuat 0 3557 8011 0 3557 8099 117 The Mall Ngam Wong Wan 0 2550 0790 0 2550 0799 103 Song Phi Nong 0 3553 1943-4 0 3553 1092 Sub-Branch 104 Suphan Buri 0 3551 1522-3 0 3552 2155 Pathum Thani 105 Talat Nangbuat 0 3540 9327-8 0 3557 8471 118 Big-C Lam Luk Ka Sub-Branch 0 2152 7182-6 0 2152 7187 106 Thanon Malaiman Suphan Buri 0 3552 4044-6 0 3552 4047 119 Future Park Rangsit 2 0 2958 6160-4 0 2958 6165 107 U Thong 0 3540 4202-4 0 3555 1405 Sub-Branch 120 Future Park Rangsit Sub-Branch 0 2958 0971-2 0 2958 0974 Business Hours: Monday-Friday 8.30 - 16.30 hrs. 121 Zeer Rangsit Sub-Branch 0 2992 6112-4 0 2992 6117 No. Branch Tel. Fax. Phra Nakhon Si Ayutthaya Samut Prakan 122 Lotus Ayutthaya Sub-Branch 0 3534 5324 0 3534 5160 108 Customs Free Zone 0 2134 1916-9 0 2134 1905 Prachuap Khiri Khan Suvarnabhumi Sub-Branch 123 Hua Hin Market Village 0 3252 6290-4 0 3252 6295 Sub-Branch Ratchaburi Business Hours: Monday-Friday 9.00 - 16.00 hrs. 124 Big-C Ratchaburi Sub-Branch 0 3231 7313-5 0 3231 6760 No. Branch Tel. Fax. Samut Prakan Samut Prakan 125 Big-C Suksawat 0 2464 4281-5 0 2464 4284 109 Suvarnabhumi Airport 0 2134 1906-10 0 2134 1911 Sub-Branch Business Hours: Monday-Friday 10.00 - 17.00 hrs.

No. Branch Tel. Fax. Nakhon Pathom 110 Talat Pathom Mongkhon 0 3425 6627-8 0 3425 3554 Nakhon Pathom Sub-Branch

ANNUAL REPORT 2007 267 North 76 Branches Business Hours: Monday-Friday 8.30 - 15.30 hrs.

No. Branch Tel. Fax. No. Branch Tel. Fax. Chiang Mai 42 Thanon Kosi Nakhon Sawan 0 5631 2885-8 0 5622 5202 1 Bo Sang 0 5338 6850-1 0 5333 9036 43 Thanon Sai Asia Nakhon Sawan 0 5622 9120-1 0 5622 9122 2 Chang Phuak Chiang Mai 0 5321 1672 0 5321 2013 Sub-Branch 3 Chom Thong 0 5334 1181-2 0 5334 1180 44 Thanon Sawanwithi Nakhon 0 5622 1521-2 0 5622 1581 4 Fang 0 5345 1111-3 0 5345 1114 Sawan 5 Hang Dong Chiang Mai 0 5344 2871-2 0 5344 2951 nan Sub-Branch 45 Nan 0 5471 0162 0 5471 0566 6 Mae Chaem 0 5348 5124-5 0 5382 8192 46 Pua 0 5479 1106-7 0 5479 1108 7 Night Bazaar Sub-Branch 0 5327 3487 0 5327 3552 8 Sam Yaek San Sai Sub-Branch 0 5349 1822 0 5349 1821 Phayao 9 San Pa Tong 0 5382 3503-4 0 5331 1113 47 Chiang Kham 0 5441 6340-3 0 5445 1432 10 Saraphi 0 5342 3248-50 0 5332 1591 48 Chun 0 5442 0186-7 0 5445 9033 11 Si Yaek Sanambin Chiang Mai 0 5320 2529-37 0 5327 0825 49 Phayao 0 5441 2209 0 5443 1774 12 Talat Pratu Chiang Mai 0 5381 4196 0 5381 4556 50 Si Yaek Mae Tam Phayao 0 5441 2526-9 0 5441 2530 Sub-Branch Sub-Branch 13 Thanon Chang Klan Chiang Mai 0 5328 1850-3 0 5328 1859 Phetchabun 14 Thanon Charoen Muang 0 5324 2855 0 5324 2901 51 Dong Khui 0 5676 9223-5 0 5676 9226 Chiang Mai 52 Lom Sak 0 5674 6048-9 0 5670 1119 15 Thanon Chiang Mai-Mae Jo 0 5324 3851-2 0 5324 3853 53 Phetchabun 0 5672 2262-3 0 5671 1163 Sub-Branch 54 Sap Samo Thot 0 5673 1168 0 5673 1169 16 Thanon Moon Muang Chiang Mai 0 5321 8210-3 0 5321 8217 55 Talat Huai Phai 0 5675 0045-8 0 5675 0050 17 Thanon Ratchawong Chiang Mai 0 5325 1852-3 0 5323 3918 Phichit 18 Thanon Si Don Chai Chiang Mai 0 5328 2085-6 0 5327 9026 56 Bang Mun Nak 0 5666 0758-60 0 5663 1278 19 Thanon Suthep Chiang Mai 0 5380 8514-6 0 5380 8523 57 Phichit 0 5661 2532-4 0 5661 2178 20 Thanon Tha Phae Chiang Mai 0 5327 0151-8 0 5328 2679 58 Taphan Hin 0 5662 1388 0 5662 1488 Chiang Rai 59 Thap Khlo 0 5664 1237-8 0 5665 4430 21 Chiang Khong 0 5365 5393-4 0 5379 1112 Phitsanulok 22 Chiang Rai 0 5375 2225-9 0 5371 4003 60 Ha Yaek Khok Matum 0 5524 5215-9 0 5524 1984 23 Ha Yaek Po Khun Mengrai 0 5374 8311-3 0 5374 8314 61 Nong Tom 0 5536 6000-1 0 5536 6002 Sub-Branch 62 Phitsanulok 0 5524 1497-9 0 5524 1744 24 Huai Khrai Mae Chan Sub-Branch 0 5376 3003 0 5376 3004 Phrae 25 Mae Chan 0 5377 1230-2 0 5377 1054 63 Phrae 0 5462 7230-2 0 5452 1483 26 Mae Sai 0 5364 0786-90 0 5373 3101 Sukhothai 27 Pa Daet 0 5365 4282-4 0 5376 1011 64 Sawankhalok 0 5564 1550 0 5564 1392 28 Thanon Super Highway Chiang Rai 0 5375 4144-5 0 5371 7489 65 Sukhothai 0 5561 1101-2 0 5561 2887 Kamphaeng Phet Tak 29 Kamphaeng Phet 0 5571 1244 0 5571 3702 66 Mae Sot 0 5553 1020 0 5553 2738 30 Khlong Khlung 0 5572 4383-7 0 5572 4390 67 Tak 0 5554 0609-11 0 5551 1188 31 Khlong Lan Kamphaeng Phet 0 5573 5250 0 5578 6233 Uthai Thani Lampang 68 Lan Sak 0 5653 7002 0 5653 7003 32 Thanon Chatchai Lampang 0 5422 4830-1 0 5422 1994 69 Nong Chang 0 5653 1037-8 0 5653 1190 33 Thanon Rob Wiang Lampang 0 5432 3501-4 0 5422 7676 70 Uthai Thani 0 5651 1414-5 0 5651 1962 Lamphun Uttaradit 34 Lamphun 0 5356 1115-7 0 5356 1118 71 Uttaradit 0 5544 1829-31 0 5541 2082 35 Li 0 5397 9777-8 0 5397 9779 36 Pa Sang 0 5355 7264-8 0 5352 0227 Business Hours: Monday-Friday 9.00 - 16.30 hrs. Mae Hong Son 37 Mae Hong Son 0 5362 0337-9 0 5361 1557 No. Branch Tel. Fax. Nakhon Sawan lamphun 38 Lat Yao 0 5631 7640-2 0 5627 1438 72 Lamphun Industrial Estate 0 5358 1376-7 0 5358 2304 39 Nong Bua 0 5625 1351 0 5625 1053 Sub-Branch 40 Takhli 0 5626 1520-1 0 5626 1972 41 Tha Tako 0 5636 0636-8 0 5624 9330

268 ANNUAL REPORT 2007 Business Hours: Monday-Friday 10.00 - 19.00 hrs.

No. Branch Tel. Fax. No. Branch Tel. Fax. Chiang Mai Maha Sarakham 73 Thanon Nimmanhemin 0 5335 7650-4 0 5335 7655 21 Maha Sarakham 0 4374 0920-4 0 4371 1242 Chiang Mai Sub-Branch 22 Wapi Pathum 0 4379 9375-8 0 4379 9380 Mukdahan 23 Mukdahan 0 4263 1200-5 0 4263 1206 Business Hours: Monday-Friday 9.00 - 17.00 hrs. 24 Talat Mukdahan Sub-Branch 0 4261 1655 0 4261 1620 No. Branch Tel. Fax. Nakhon Phanom Chiang Mai 25 Nakhon Phanom 0 4252 2896-7 0 4251 1411 74 Talat Warorot Sub-Branch 0 5325 2960 0 5325 2961 26 Si Songkhram 0 4259 9160-2 0 4259 9165 27 Tha Uthen 0 4258 1117-8 0 4258 1116 Nakhon Ratchasima Business Hours: Daily 11.00 - 19.00 hrs. 28 Cho Ho Nakhon Ratchasima 0 4492 8955-9 0 4492 8960 Sub-Branch No. Branch Tel. Fax. 29 Dan Khun Thot Sub-Branch 0 4420 4875-8 0 4420 4874 Chiang Mai 30 Hua Tha Le Nakhon Ratchasima 0 4425 1372-4 0 4425 6394 75 Big-C Hang Dong Sub-Branch 0 5344 7822-6 0 5344 7827 31 Khon Buri 0 4444 8011-2 0 4444 8012 76 Central Airport Plaza 0 5390 3607-8 0 5390 3612 32 Pak Chong 0 4428 0383-6 0 4431 1387 Chiang Mai Sub-Branch 33 Pak Thong Chai 0 4428 3970-1 0 4444 1433 34 Phimai 0 4428 7403-6 0 4447 1394 35 Sam Yaek Pak Thong Chai 0 4421 3542-3 0 4421 3541 Nakhon Ratchasima Northeast 73 Branches 36 Soeng Sang 0 4444 7150-4 0 4444 7079 37 Thanon Chomphon Nakhon 0 4424 2526 0 4425 3225 Business Hours: Monday-Friday 8.30 - 15.30 hrs. Ratchasima No. Branch Tel. Fax. 38 Thanon Mittraphap Nakhon 0 4426 8239-42 0 4425 1367 Amnat Charoen Ratchasima 1 Amnat Charoen 0 4551 1561 0 4551 1560 39 Wang Nam Khieo 0 4422 8023-5 0 4422 8026 Buriram Nong Bua Lamphu 2 Buriram 0 4461 1056 0 4461 2590 40 Nong Bua Lumphu 0 4236 0843-7 0 4236 0852 3 Nang Rong 0 4462 4466-8 0 4463 1863 41 Si Bun Ruang 0 4235 3910-1 0 4235 3912 4 Prakhon Chai 0 4465 2008-10 0 4467 1483 Nong Khai 5 Satuk 0 4462 7407-9 0 4468 1325 42 Bung Kan 0 4249 1667-9 0 4249 1666 Chaiyaphum 43 Nong Khai 0 4241 1669-70 0 4241 1058 6 Chaiyaphum 0 4483 8015-7 0 4481 1267 44 Pak Khat 0 4240 4260-4 0 4248 0016 7 Kaeng Khro 0 4488 2754 0 4488 2758 45 Si Chiang Mai Nong Khai 0 4240 6503-5 0 4245 1449 8 Phu Khieo 0 4484 4900-2 0 4486 1498 Sub-Branch 9 Thep Sathit 0 4485 7005 0 4485 7131 46 Tha Bo 0 4243 1329-31 0 4243 1332 Kalasin Roi Et 10 Kalasin 0 4381 1024 0 4381 1497 47 Roi Et 0 4352 2790-1 0 4351 2426 Khon Kaen 48 Thanon Thevaphiban Roi Et 0 4351 3021-2 0 4351 3023 11 Ban Phai 0 4327 2433-4 0 4327 2435 Sakon Nakhon 12 Chum Phae 0 4331 1027 0 4331 1007 49 Phang Khon 0 4273 4928-30 0 4277 1282 13 Kranuan 0 4325 1276 0 4325 1683 50 Sakon Nakhon 0 4273 3581-2 0 4271 1712 14 Muang Phon 0 4341 4132 0 4341 4138 51 Sawang Daen Din 0 4272 1588-90 0 4272 1592 15 Thanon Mittraphap Khon Kaen 0 4332 5519-24 0 4332 5442 Si Sa Ket 16 Thanon Na Muang Khon Kaen 0 4322 5131-3 0 4322 5069 52 Kantharalak 0 4566 1159 0 4566 1160 17 Thanon Pracha Samoson 0 4333 3761-7 0 4323 7709 53 Si Sa Ket 0 4562 0708-9 0 4561 2874 Khon Kaen 54 Uthumphon Phisai 0 4569 1202-4 0 4569 1440 18 Thanon Sri Chan Khon Kaen 0 4332 6154-5 0 4332 6156 Surin Sub-Branch 55 Samrong Thap 0 4456 9098-9 0 4456 9103 Loei 56 Sangkha 0 4457 1071-3 0 4457 1020 19 Loei 0 4281 1080 0 4281 1443 57 Surin 0 4451 1543 0 4451 4416 20 Wang Saphung 0 4285 0920-2 0 4284 1043

ANNUAL REPORT 2007 269 East 71 Branches Business Hours: Monday-Friday 8.30 - 15.30 hrs.

No. Branch Tel. Fax. No. Branch Tel. Fax. Ubon Ratchathani Chachoengsao 58 Det Udom 0 4536 1488-9 0 4536 1199 1 Bang Khla 0 3854 1847 0 3854 1391 59 Phibun Mangsahan 0 4520 4817-9 0 4544 1871 2 Bang Pakong 0 3883 2449-51 0 3853 2815 60 Thanon Chayangkun 0 4526 1598-9 0 4524 2803 3 Bang Wua Sub-Branch 0 3884 1040-2 0 3884 1043 Ubon Ratchathani 4 Bus Station Chachoengsao 0 3851 6102-3 0 3881 2087 61 Thanon Phrom Thep 0 4524 3470-3 0 4525 5675 Sub-Branch Ubon Ratchathani 5 Chachoengsao 0 3881 6296 0 3851 2195 62 Warin Chamrap 0 4526 9416-8 0 4526 9415 6 Phanom Sarakham 0 3855 1464-5 0 3855 1025 Udon Thani 7 Suwinthawong Chachoengsao 0 3859 3470-3 0 3859 3475 63 Ban Dung 0 4227 1097-8 0 4227 1100 8 Talat Khlong Suan 0 3859 5061-2 0 3859 5063 64 Kumphawapi 0 4233 1992 0 4233 1993 Chanthaburi 65 Nam Som 0 4228 9174-8 0 4228 9179 9 Khlung 0 3944 1659 0 3944 1367 66 Talat Ban Huai Udon Thani 0 4224 6419 0 4224 6274 10 Soi Dao 0 3938 1384-6 0 3938 1387 Sub-Branch 11 Tha Mai 0 3935 6810-2 0 3943 1547 67 Thanon Prajak Udon Thani 0 4224 8570-5 0 4222 2416 12 Thanon Sri Rong Muang 0 3932 5964-7 0 3932 1172 68 Udon Thani 0 4224 1121-2 0 4224 3320 Chanthaburi Yasothon 13 Thanon Triratana Chanthaburi 0 3932 1822-3 0 3932 1824 69 Yasothon 0 4571 2592-3 0 4571 2679 Chon Buri 14 Ban Bung 0 3844 3097-8 0 3844 3707 15 Bang Lamung 0 3836 7867-9 0 3822 5664 Business Hours: Monday-Friday 10.30 - 18.30 hrs. 16 Bang Pakong Industrial Estate 0 3821 3555-8 0 3821 3560 No. Branch Tel. Fax. 17 Bo Thong 0 3821 1001-3 0 3821 1005 Khon Kaen 18 Ko Sichang 0 3821 6131-2 0 3821 6133 70 Khon Kaen University 0 4320 4434-8 0 4320 4439 19 Laem Chabang 0 3849 3624-7 0 3849 3628 Sub-Branch 20 Na Klua 0 3872 7450-2 0 3872 7454 21 Noen Plap Wan Chon Buri 0 3840 6305 0 3840 6348 Sub-Branch Business Hours: Daily 11.00 - 19.00 hrs. 22 Nong Mon Chon Buri 0 3839 2601-3 0 3839 2604 23 Nong Pru 0 3829 2444-8 0 3829 2450 No. Branch Tel. Fax. 24 Om Muang Chon Buri 0 3827 1995 0 3879 8993 Khon Kaen Sub-Branch 71 Big-C Khon Kean Sub-Branch 0 4322 7187-91 0 4322 7192 25 Pattaya Klang 0 3842 5583-8 0 3842 5582 Nakhon Ratchasima 26 Pattaya Tai 0 3842 8513-5 0 3842 7696 72 The Mall Nakhon Ratchasima 0 4428 8490-2 0 4428 8493 27 Phan Thong Chon Buri 0 3845 2791-5 0 3845 2796 Sub-Branch Sub-Branch 28 Phanat Nikhom 0 3847 3080-3 0 3847 3085 Business Hours: Daily 11.00 - 20.00 hrs. 29 Saha Industrial Park Si Racha 0 3876 2787-90 0 3876 2791 Sub-Branch No. Branch Tel. Fax. 30 Sattahip 0 3873 9351-3 0 3843 7666 Udon Thani 31 Si Racha 0 3831 1194-5 0 3832 2476 73 Charoensi Complex Udon Thani 0 4234 3906-10 0 4234 3920 32 Talat Ko Pho 0 3820 9101-3 0 3820 9104 Sub-Branch 33 Thanon Sukhumvit Chon Buri 1 0 3827 3862-6 0 3827 3867 34 Thanon Sukhumvit Chon Buri 2 0 3827 2055-7 0 3827 2058 35 Thanon Sukhumvit Chon Buri 3 0 3879 4689-92 0 3879 4593 (Si Yaek Chalerm Thai) 36 Thanon Wachira Prakan 0 3827 3850-5 0 3827 3856 Chon Buri Prachin Buri 37 Kabin Buri 0 3728 1879 0 3728 1880 38 Prachin Buri 0 3721 1440-1 0 3721 2305 39 Si Mahosot 0 3727 6509-10 0 3727 6511

270 ANNUAL REPORT 2007 Business Hours: Daily 10.00 - 18.00 hrs.

No. Branch Tel. Fax. No. Branch Tel. Fax. Rayong Sa Kaeo 40 Amata City Rayong Industrial 0 3865 0334-8 0 3865 0339 60 Talat Rong Klua Aranyaprathet 0 3723 0217-9 0 3722 6079 Estate Sub-Branch Sub-Branch 41 Ban Chang 0 3888 2875-7 0 3860 2577 42 Eastern Seaboard Industrial 0 3865 6494-8 0 3865 6499 Estate Rayong Sub-Branch Business Hours: Daily 10.30 - 20.00 hrs. 43 Klaeng 0 3888 4119-21 0 3867 1360 No. Branch Tel. Fax. 44 Mab Ta Phut 0 3860 7518-21 0 3860 7525 Rayong 45 Rayong 0 3861 1007 0 3861 3969 61 Big-C Rayong Sub-Branch 0 3801 1771-5 0 3801 1776 46 Thanon Chantha Udom Rayong 0 3861 6002-5 0 3861 6006 Sa Kaeo 47 Aranyaprathet 0 3723 1272 0 3723 1072 Business Hours: Daily 11.00 - 19.00 hrs. 48 Khlong Hat 0 3751 2251-4 0 3751 2249 No. Branch Tel. Fax. 49 Sa Kaeo 0 3722 0522-3 0 3724 1022 Chanthaburi 50 Wang Nam Yen 0 3725 1002-3 0 3725 1001 62 Robinson Chanthaburi 0 3932 8804-8 0 3932 8809 Trat Sub-Branch 51 Khlong Yai 0 3958 1123-4 0 3958 1255 Chon Buri 52 Laem Ngop 0 3959 7045-6 0 3953 8297 63 Carrefour Chon Buri Sub-Branch 0 3838 7910-4 0 3838 7915 53 Trat 0 3952 0569-73 0 3953 2857 64 Central Festival Pattaya 0 3841 5273-4 0 3841 5277 Sub-Branch Business Hours: Monday-Friday 8.30 - 16.30 hrs. 65 Lotus Pattaya Tai Sub-Branch 0 3841 2661-2 0 3841 3508 66 Thanon Chai Hat Pattaya 0 3805 2274-8 0 3805 2279 No. Branch Tel. Fax. Sub-Branch Chon Buri 67 Robinson Si Racha Sub-Branch 0 3831 4391-3 0 3832 4368 54 Bo Win Chon Buri Sub-Branch 0 3834 6654-5 0 3834 6656 68 Royal Garden Plaza Pattaya 0 3841 6972-4 0 3841 6997 Sub-Branch Business Hours: Monday-Friday 10.00 - 18.00 hrs. 69 Soi Bua Khao Pattaya 0 3841 6989-93 0 3841 6994 Sub-Branch No. Branch Tel. Fax. Rayong Prachin Buri 70 Laem Thong Rayong 0 3861 7084-7 0 3861 7209 55 Industrial Park 304 Sub-Branch 0 3741 4537-41 0 3741 4542 Sub-Branch Business Hours: Monday-Friday 10.30 - 18.30 hrs. Business Hours: Daily 11.00 - 20.00 hrs.

No. Branch Tel. Fax. No. Branch Tel. Fax. Chon Buri Chon Buri 56 Thanon Liab Chai Hat Chomtien 0 3823 6264-8 0 3823 6269 71 The Avenue Pattaya Sub-Branch 0 3805 2240-4 0 3805 2245 Sub-Branch 57 Thanon Phra Tamnak Pattaya 0 3841 6859-63 0 3841 6864 Sub-Branch South 60 Branches Business Hours: Monday-Friday 11.00 - 19.00 hrs. Business Hours: Monday-Friday 8.30 - 15.30 hrs.

No. Branch Tel. Fax. No. Branch Tel. Fax. Chon Buri Chumphon 58 Tuk Com Si Racha Sub-Branch 0 3831 4350-2 0 3832 1047 1 Chumphon 0 7750 1418 0 7750 1029 2 Lang Suan Chumphon 0 7758 1490-2 0 7754 1071 3 Pak Nam Chumphon 0 7752 1013 0 7752 1620 Business Hours: Monday-Saturday 9.00 - 18.00 hrs. 4 Tha Sae 0 7759 9260-1 0 7759 9262 No. Branch Tel. Fax. Krabi Chon Buri 5 Krabi 0 7561 1333 0 7563 1465 59 Amata Nakorn Industrial Estate 0 3844 0611-5 0 3844 0616 6 Talat Kao Krabi Sub-Branch 0 7561 2804-5 0 7561 1512 Chon Buri Sub-Branch

ANNUAL REPORT 2007 271 No. Branch Tel. Fax. No. Branch Tel. Fax. Nakhon Si Thammarat 45 Surat Thani 0 7727 2200 0 7728 3972 7 Chandi 0 7548 6490-3 0 7548 6446 46 Thanon Talat Mai Surat Thani 0 7728 4093-5 0 7728 4096 8 Nakhon Si Thammarat 0 7531 2085-9 0 7534 2891 47 Wiang Sa 0 7736 1661-3 0 7736 2007 9 Talat Hua It 0 7534 5771-2 0 7534 5773 Trang 10 Tha Sala 0 7552 1337-8 0 7552 1336 48 Kantang 0 7523 8100-4 0 7523 8111 11 Thung Song 0 7541 2842 0 7541 1798 49 Trang 0 7521 0137-8 0 7521 8200 Narathiwat Yala 12 Narathiwat 0 7351 1360 0 7351 1231 50 Betong 0 7324 5806-7 0 7323 1386 13 Rue Soh 0 7357 1186-7 0 7357 1196 51 Yala 0 7321 2729 0 7321 4190 14 Sungai Kolok 0 7361 1578-9 0 7361 2455 Pattani 15 Pa Lat 0 7348 5181 0 7348 5186 Business Hours: Monday-Friday 9.00 - 16.00 hrs. 16 Pattani 0 7331 1518-20 0 7333 1039 No. Branch Tel. Fax. Phang Nga Krabi 17 Phang Nga 0 7643 0529-30 0 7641 1888 52 Ao Nang Krabi Sub-Branch 0 7569 5683-7 0 7569 5688 18 Talat Yan Yao 0 7642 1555 0 7642 1389 Surat Thani 19 Thai Muang 0 7657 1501 0 7657 1203 53 Chaweng 2 Ko Samui 0 7742 2252 0 7742 2762 Phatthalung Sub-Branch 20 Phatthalung 0 7462 7808-9 0 7461 2214 Phuket 21 Choeng Ta Le Phuket 0 7627 1490-3 0 7632 4522 Business Hours: Monday-Friday 9.00 - 17.00 hrs. Sub-Branch 22 Ha Yaek Chalong Phuket 0 7638 1388-9 0 7638 1634 No. Branch Tel. Fax. Sub-Branch Surat Thani 23 Hat Patong 0 7634 0447-9 0 7634 0198 54 Chaweng Ko Samui Sub-Branch 0 7743 0267-8 0 7743 0494 24 Phuket 0 7625 6400-1 0 7621 3561 25 Samkong Phuket Sub-Branch 0 7621 7011-2 0 7621 7450 Business Hours: Daily 9.00 - 17.00 hrs. 26 Thalang Phuket Sub-Branch 0 7631 1588-90 0 7631 1584 27 Tilok Center Phuket 0 7621 8068-70 0 7621 8074 No. Branch Tel. Fax. Ranong Surat Thani 28 Ranong 0 7783 2188-9 0 7781 1345 55 Chaweng Center Ko Samui 0 7741 3243 0 7741 4223 29 Thanon Saphan Pla Ranong 0 7783 5216-8 0 7783 5219 Sub-Branch Sub-Branch 56 Lamai Ko Samui Sub-Branch 0 7742 4305-6 0 7742 4619 Satun 30 Satun 0 7473 0431-5 0 7472 1358 Business Hours: Daily 10.00 - 17.00 hrs. Songkhla 31 Hat Yai Nai 0 7425 7840-2 0 7425 4843 No. Branch Tel. Fax. 32 Padang Besa 0 7452 1977-8 0 7452 1980 Songkhla 33 Songkhla 0 7444 0420-3 0 7432 1071 57 Chong Khao-Mo O Hat Yai 0 7426 2631-4 0 7426 2637 34 Thanon Nakhon Nai Songkhla 0 7432 1063-4 0 7432 1065 Sub-Branch Sub-Branch 35 Thanon Phetkasem Hat Yai 0 7436 6151-2 0 7424 6923 36 Thanon Saiburi Songkhla 0 7448 7247-9 0 7431 3322 Business Hours: Daily 11.00 - 19.00 hrs. 37 Thanon Si Phuwanat Hat Yai 0 7435 4727-8 0 7423 5770 No. Branch Tel. Fax. 38 Thanon Supphasan Rangsan 0 7422 0884 0 7424 5233 Nakhon Si Thammarat Hat Yai 58 Robinson Nakhon Si Thammarat 0 7534 6317-21 0 7534 6322 Surat Thani Sub-Branch 39 Ban Ta Khun 0 7739 7003-4 0 7739 7055 40 Chai Buri 0 7736 7141-3 0 7736 7150 41 Ko Samui 0 7742 1200-1 0 7742 0141 Business Hours: Daily 11.00 - 20.00 hrs. 42 Mae Nam Ko Samui Sub-Branch 0 7724 8305-9 0 7724 8310 No. Branch Tel. Fax. 43 Phunphin 0 7731 1033 0 7731 1000 Phuket 44 Si Yaek Sang Phet Surat Thani 0 7721 8392 0 7721 9594 59 Central Festival Phuket 0 7624 9981-3 0 7624 9985 Sub-Branch Sub-Branch 60 Jung Ceylon Phuket Sub-Branch 0 7636 6060-4 0 7636 6065

272 ANNUAL REPORT 2007 K-LOBBY BRANCH Business Hours: Daily 24 hrs.

No. Branch Tel. Fax. Bangkok 1 Amway Head Office K-Lobby Branch - - 2 Carrefour Bangbon K-Lobby Branch - - 3 Central Chit Lom K-Lobby Branch - - 4 Central Rama II K-Lobby Branch - - 5 City Complex Pratunam K-Lobby Branch 0 2253 1196 0 2253 1197 6 Dietham Building K-Lobby Branch - - 7 Lotus Express Klong Chan K-Lobby Branch 0 2378 1757, 0 2378 1796 0 2378 1806 8 Loxley Building K-Lobby Branch - - 9 Mahboonkrong Center K-Lobby Branch - - 10 Praram 9 Hospital K-Lobby Branch - - 11 Robinson Bangrak K-Lobby Branch - - 12 Seacon Square K-Lobby Branch - - 13 Silom Complex K-Lobby Branch - - 14 Siripinyo Building K-Lobby Branch - - 15 Thai Airways International Head Office K-Lobby Branch - - 16 The Old Siam Plaza K-Lobby Branch - - 17 Tops Daily Petchkasem 75 K-Lobby Branch - - 18 Victory Monument K-Lobby Branch - - CHON BURI 19 Amata Square K-Lobby Branch - - 20 Laem Chabang Industrial Estate K-Lobby Branch - - NONTHABURI 21 Lotus Express Pornsawan Plaza K-Lobby Branch 0 2527 7402-3 0 2527 7421 22 Lotus Express Vidapa Park K-Lobby Branch 0 2592 6090-1 0 2592 6092 23 The Avenue Chaengwattana K-Lobby Branch - - PRACHUAP KHIRI KHAN 24 Chatchai Hotel K-Lobby Branch - - SAMUT PRAKAN 25 Carrefour Srinakarin K-Lobby Branch - - 26 Crew Center Suvarnabhumi Airport K-Lobby Branch - -

ANNUAL REPORT 2007 273 FOREIGN EXCHANGE BOOTH

No. Foreign Exchange Booth Tel. Fax. BANGKOK 1 Central World Plaza 0 2251 1393 0 2251 1392 2 Chatuchak Plaza 0 2265 9502-6 0 2265 9507 3 City Complex Pratu Nam 0 2253 1196 0 2253 1197 4 Mahboonkrong Center 0 2216 4820-2 ext. 19 0 2216 4820-2 ext. 20 5 Na-Na Nua 0 2655 0735-40 ext. 120 0 2655 0741 6 National Stadium BTS 0 2612 5328 0 2612 5266 7 Petroleum of Thailand Building, Phrakhanong Office 0 2348 6410 0 2348 6497-8 8 Phat Phong 0 2637 0042-8 ext. 144 0 2637 0476 9 Silom 0 2237 6947 0 2233 7643 10 Silom Complex 0 2632 0073 0 2632 0073 11 Silom Soi 22 0 2235 2540-4 0 2235 2545 12 Soi Rambutri 1 0 2629 5031 0 2629 5032 13 Soi Rambutri 2 0 2282 8628-9 0 2282 8661 14 Soi Sukhumvit 11 0 2253 8623-4 0 2253 8600 15 Soi Sukhumvit 4 0 2253 1280 0 2253 1281 16 Soi Sukhumvit 7 0 2253 7387-8 0 2253 7389 17 Suan Chatuchak 0 2615 8861 0 2615 8862 18 Suan Chatuchak Weekend Market 0 2272 4790-3 0 2272 4802 19 Sukhumvit 15 0 2253 7381-5 0 2253 7386 20 Thanon Khao San 1 0 2282 8959 0 2282 4122 21 Thanon Khao San 2 0 2282 7367 0 2282 7368 22 Thanon Phetchaburi 17 0 2255 5320-4 ext. 108 0 2255 5325 23 Wat Trai Mit 0 2221 9184 0 2221 9185 Chiang Mai 24 Night Bazaar 0 5381 9117-9 0 5327 3552 25 Thanon Tha Phae Chiang Mai 0 5327 0151-8 ext. 143 0 5328 2679 Chiang Rai 26 Chiang Rai Airport 0 5379 8266 0 5379 8267 27 Golden Triangle 0 5378 4507 0 5378 4508

274 ANNUAL REPORT 2007 No. Foreign Exchange Booth Tel. Fax. Chon Buri 28 Chomtien 1 Pattaya 0 3825 2862 0 3825 2863 29 Chomtien 2 Pattaya 0 3823 2320 0 3823 2321 30 Pattaya Klang 0 3842 5583 0 3842 5582 31 Pattaya Tai 1 0 3842 9294 0 3842 9145 32 Pattaya Tai 2 0 3842 8511 ext. 150 0 3842 7696 33 PS Plaza Pattaya 0 3842 5316 0 3842 5929 34 Royal Garden Plaza Pattaya 0 3841 6995-6 0 3841 6997 35 Soi Bua Khao Pattaya 1 0 3841 6421 0 3841 6422 36 Soi Bua Khao Pattaya 2 0 3841 6989-93 0 3841 6994 37 Thanon Chai Hat Pattaya 0 3805 2274-8 0 3805 2279 38 Thanon Chai Hat Pattaya 1 0 3842 1403 0 3842 6361 39 Thanon Chai Hat Pattaya 2 0 3842 1345 0 3842 9429 40 Thanon Chai Hat Pattaya 3 Pattaya Tai 0 3841 6428 0 3841 6429 41 Thanon Chai Hat Pattaya 4 Pattaya Klang 0 3841 6430 0 3841 6431 42 Thanon Liab Chai Hat Chomtien 0 3823 6264-8 ext. 109 0 3823 6269 43 Thanon Pattaya Sai 2 0 3841 6423 0 3841 6424 44 Thanon Pattaya Sai 2 (Pattaya Nua) 0 3842 1630 0 3842 1680 45 Thanon Phra Tamnak Pattaya 0 3841 6859-63 ext. 101 0 3841 6864 46 The Avenue Pattaya 0 3805 2240-4 0 3805 2245 Krabi 47 Hat Ao Nang 1 0 7569 5654 0 7569 5655 48 Hat Ao Nang 2 0 7569 5657 0 7569 5658 49 Ko Lanta 0 7568 4546 0 7568 4593 Phuket 50 Ha Yaek Chalong Phuket 0 7638 1710-1 0 7638 1634 51 Hat Patong 1 0 7634 0447-9 ext. 114 0 7634 0198 52 Hat Patong 2 0 7634 0060 0 7634 0069 53 Hat Patong 3 0 7634 1104 0 7634 1128 54 Karon 1 0 7633 3551 0 7633 3552

ANNUAL REPORT 2007 275 No.No. Foreign ExchangeBranch Booth Tel. Tel. Fax. Fax. 55 Karon 2 0 7639 8388 0 7639 8389 56 Kata 0 7633 3010 0 7633 3011 57 Liab Chai Hat Patong 1 0 7634 4601 0 7634 4610 58 Liab Chai Hat Patong 2 0 7634 4208 0 7634 4209 Prachuap Khiri Khan 59 Hua Hin 1 0 3251 1646 0 3251 1656 60 Hua Hin 2 0 3252 1329 0 3252 1330 Samut Prakan 61 Suvarnabhumi Airport 0 2134 1906-10 0 2134 1911 Songkhla 62 Hat Yai Airport 0 7422 7257 0 7422 7256 Surat Thani 63 Chaweng 2 Ko Samui 0 7742 2252, 0 7742 2258 0 7742 2762 64 Chaweng Center Ko Samui 0 7741 3243, 0 7741 3763 0 7741 4223 65 Chaweng Ko Samui 0 7743 0267-8 0 7743 0494 66 Hat Chaweng 1 0 7741 3871 0 7741 3872 67 Hat Chaweng 2 0 7742 2690 0 7742 2692 68 Hat Chaweng 3 0 7741 4439 0 7741 4440 69 Ko Phangan 0 7737 5206 0 7737 5221 70 Lamai Ko Samui 0 7742 4616-8 ext. 107 0 7742 4619 trat 71 Ko Chang 0 3955 1509 0 3955 1510

276 ANNUAL REPORT 2007 Signature Exclusive Center Business Hours: Monday-Friday 8.30 - 15.30 hrs.

No. Branch Tel. Fax. BANGKOK 1 Silom Main Branch 0 2232 5001 ext. 5220, 5248 0 2234 5145 2 Thanon Sua Pa Main Branch 0 2221 3131-8 ext. 5515-6 0 2222 5741 Business Hours: Monday-Friday 9.00 - 18.00 hrs.

No. Branch Tel. Fax. 3 Phahon Yothin 0 2273 1212-6 0 2273 1234 4 Thanon Sathon 0 2238 2881-6 0 2238 2887 Business Hours: Monday-Friday 9.00 - 16.00 hrs., Saturday-Sunday 10.00 - 17.00 hrs.

No. Branch Tel. Fax. 5 Yaowarat 0 2623 0016-9 0 2226 4806

Signature Corner Business Hours: Monday-Friday 8.30 - 15.30 hrs. No. Branch Tel. Fax. BANGKOK 1 Rat Burana Main Branch 0 2871 3650-5 0 2871 3645 2 Thanon Sukhumvit 55 (Soi Thong Lo 4) Sub-Branch 0 2714 7981-3 0 2714 7879 Business Hours: Monday-Friday 8.30 - 18.00 hrs., Saturday-Sunday 11.00 - 18.00 hrs.

No. Branch Tel. Fax. 3 Wang Burapha 0 2623 7681-90 0 2225 0344 Business Hours: Daily 10.00 - 18.00 hrs.

No. Branch Tel. Fax. 4 Siam Square 0 2658 1755-9 0 2658 1754 5 Siam Paragon Sub-Branch 0 2610 9404-8 0 2610 9409

K-WePlan Center Business Hours: Saturday-Sunday 12.00 - 18.00 hrs. No. Branch Tel. Fax. BANGKOK 1 Siam Square 0 2251 4595-8 0 2251 4599

ANNUAL REPORT 2007 277 Business Banking center

Business Banking Service Business Hours: Monday-Friday 8.30 - 15.30 hrs.

No. Business Banking Service Tel. Fax. Bangkok and Metropolitan Bangkok 1 Thanon Sua Pa Main Branch 0 2226 4560-79 ext. 5521 0 2222 5741 2 Phahon Yothin Main Branch 0 2273 1398 0 2273 1399 3 Silom Main Branch 0 2234 7051-9 ext. 5208 0 2234 5145 4 Dao Khanong Branch 0 2877 5670-2 0 2476 4463 5 Thanon Ram Intra Branch 0 2552 3060-2 0 2971 6515 6 Tha Rua Sathu Pradit Branch 0 2682 0172-5 ext. 129 0 2294 6661 7 Bang Bon Branch 0 2899 8336-9 0 2416 4396 8 Bang Yikhan Branch 0 2883 0163-9 ext. 109 0 2433 1337 9 Thanon Sri Nakharin Km. 9 Sub-Branch 0 2393 5850-4 0 2361 7236 10 Ratchadamri Branch 0 2655 0275-83 ext. 112 0 2253 1423 11 Lat Krabang Branch 0 2739 0187-9 ext. 155,158 0 2326 8303 12 Lat Phrao 25 Branch 0 2938 3040-2 0 2513 1603 13 Sukhumvit 33 (Bang Kapi) Branch 0 2261 0161-2 0 2261 0683 14 Ekkamai Branch 0 2714 1081-8 ext. 109,110 0 2714 0410 NONTHABURI 15 Thanon Ngam Wong Wan Branch 0 2951 0930-4 0 2589 5091 16 Pak Kret Branch 0 2960 8940-5 ext. 105 0 2583 8919 NAKORN PATHOM 17 Om Yai Branch 0 2811 5860-1 ext. 103 0 2420 8607 PATHUM THANI 18 Nava Nakorn Branch 0 2909 1121-6 ext. 109 0 2529 2904 samut prakan 19 Bang Phli Branch 0 2751 0650-4 ext. 101 0 2316 7827 20 Phra Pradaeng Branch 0 2818 0990-3 0 2463 1976 21 Free Zone Suvarnabhumi Sub-Branch1 0 2134 1916-9 0 2134 1905 22 Samut Prakan Branch 0 2701 7800-4 ext. 137 0 2701 7805 samut sakhon 23 Thanon Setthakit 1 Samut Sakhon Branch 0 3481 6662-5 0 3481 6671

278 ANNUAL REPORT 2007 No. Business Banking Service Tel. Fax. Upcountry chon buri 24 Laem Chabang Branch 0 3849 3624-6 ext. 161-2 0 3849 3628 25 Bang Pakong Industrial Estate Branch 0 3821 3555-9 ext. 166 0 3821 3560 CHIANGMAI 26 Thanon Tha Phae Chiang Mai Branch 0 5327 0151-6 0 5328 2679 NAKHON RATCHASIMA 27 Hua Tha Le Nakhon Ratchasima Branch 0 4425 1372-4 0 4425 6394 prachin buri 28 Industrial Park 304 Sub-Branch2 0 3741 4537-41 0 3741 4542 ayutthaya 29 Rojana Industrial Park Sub-Branch 0 3533 2281-5 0 3533 2286 rayong 30 Mab Ta Phut Branch 0 3860 7518-9 ext. 102-3 0 3860 7525 31 Eastern Seaboard Industrial Estate Sub-Branch 0 3865 6494-8 0 3865 6499 32 Amata City Rayong Industrial Estate Sub-Branch 0 3865 0334-8 0 3865 0339 lamphun 33 Lamphun Industrial Estate Sub-Branch3 0 5358 1376-7 0 5358 2304 songkhla 34 Thanon Phetkasem Hat Yai Branch 0 7422 0503-4 ext. 106 0 7424 6923

Remark: 1 Business Hour: Monday-Friday 8.30-16.30 hrs. 2 Business Hour: Monday-Friday 10.00-18.00 hrs. 3 Business Hour: Monday-Friday 9.00-16.30 hrs.

ANNUAL REPORT 2007 279 International Trade Service Business Hours: Monday-Friday 8.30 - 15.30 hrs.

No. International Trade Service Tel. Fax. Bangkok and Metropolitan Bangkok 1 International Trade Service Office Bang Pho 0 2585 7468, 0 2585 9747 0 2585 9767 2 International Trade Service Office Bang Yikhan 0 2424 2143, 0 2424 2160 0 2424 2166 3 International Trade Service Office Dao Khanong 0 2877 5641-7, 0 2476 0619 0 2476 0620, 0 2877 5697 4 International Trade Service Office Hua Mak 0 2377 3522-3, 0 2377 3351 0 2377 3357 5 International Trade Service Office Kluai Num Thai 0 2367 3388-9 0 2367 3390 6 International Trade Service Office Lat Krabang 0 2739 0191-5 ext. 155-8 0 2326 8303 7 International Trade Service Office Lat Phrao 25 0 2513 1504, 0 2513 1571 0 2513 1724 8 International Trade Service Office Phahonyothin 0 2279 1403-11, 0 2273 1401 0 2273 1472, 0 2273 1635 9 International Trade Service Office Phetchaburi 17 0 2254 5652-4 0 2254 5655 10 International Trade Service Office Phetkasem 51 0 2454 0278, 0 2454 0279 0 2454 2606 11 International Trade Service Office Saphan Luang 0 2214 6450-2 0 2214 6453 12 International Trade Service Office Silom 0 2634 0580 ext. 5420-30 0 2234 6178, 0 2234 9650 13 International Trade Service Office Sri Nakharin 0 2399 4225-7, 0 2398 9201 0 2398 0477 14 International Trade Service Office Suapa 0 2221 3131-8 ext. 6301-3 0 2225 6575, 0 2226 1796 15 International Trade Service Office Sukhaphiban 2 0 2518 2052, 0 2518 2054-5 0 2518 2058 Suan Siam 16 International Trade Service Office Sukhumvit 101 0 2331 0875-7 0 2331 0878 17 International Trade Service Office Thanon Rama II 0 2417 2361-3 0 2417 2364 18 International Trade Service Office Thanon Ram Intra 0 2552 8329, 0 2552 8330 0 2552 8624 19 International Trade Service Office Thanon 0 2264 0072-4, 0 2264 0080-2 0 2264 0083 Ratchada Phisek (Sukhumvit-Rama IV) 20 International Trade Service Office Thanon Sathon 0 2236 7642 3, 0 2236 7645 0 2236 7646 nakorn pathom 21 International Trade Service Office Om Yai 0 2811 6845-6, 0 2431 2043 0 2431 2042, 0 2420 5565 nonthaburi 22 International Trade Service Office 0 2574 6576-7, 0 2574 6567 0 2574 6569 Thanon Chaeng Watthana pathum thani 23 International Trade Service Office Nava Nakorn 0 2529 1572-3, 0 2529 1231 0 2529 1963, 0 2529 1522 samut prakan 24 International Trade Service Office Free Zone Building, 0 2134 1901-2 0 2134 1903 Suvarnabhumi Airport

280 ANNUAL REPORT 2007 No. International Trade Service Tel. Fax. 25 International Trade Service Office Phra Pradaeng 0 2464 3153-4, 0 2464 3577 0 2464 3578 26 International Trade Service Office Samut Prakan 0 2395 3946-7, 0 2387 0039 0 2387 1192 samut sakhon 27 International Trade Service Office Samut Sakhon 0 3481 6666, 0 3442 2395-6 0 3481 6708 upcountry ayutthaya 28 International Trade Service Office Rojana Industrial Park 0 3533 2293-4 0 3533 2295 chiang mai 29 International Trade Service Office Chiang Mai 0 5327 1677, 0 5328 2681 0 5328 2680 chon buri 30 International Trade Service Office Ban Bung 0 3844 6329-30, 0 3844 6334 0 3844 6335 31 International Trade Service Office Bang Pakong 0 3874 3853-5 0 3874 3856 32 International Trade Service Office Laem Chabang 0 3849 3620-1 ext. 150-5 0 3833 0055, 0 3849 3622 lamphun 33 International Trade Service Office 0 5358 2693-4 0 5358 2695 Lamphun Industrial Estate phuket 34 International Trade Service Office Phuket 0 7621 9819-20 0 7621 9825 prachin buri 35 International Trade Service Office Industrail Park 304 0 3727 4060-2 0 3727 4063 ratchaburi 36 International Trade Service Office Ban Pong 0 3222 2674-6 0 3222 1233 rayong 37 International Trade Service Office Amata City 0 3865 0168-70 0 3865 0171 Rayong Industrial Estate 38 International Trade Service Office Eastern Seaboard 0 3865 6342-3 0 3865 6344 Industrial Estate 39 International Trade Service Office Mab Ta Phut 0 3860 7522, 0 3860 9490 0 3860 9489 songkhla 40 International Trade Service Office Hat Yai 0 7422 0501-2, 0 7424 6716 0 7423 5772

ANNUAL REPORT 2007 281 Cheque Direct Service Business Hours: Monday-Friday 8.30 - 15.30 hrs.

No. Cheque Direct Service Tel. Fax. Bangkok and Metropolitan Bangkok 1 Bang Khun Thian Branch 0 2878 0027-8 - 2 Phahon Yothin Main Branch1 0 2273 1398 - 3 Phat Phong Branch 0 2673 0040 - pathum thani 4 Khlong Luang Branch 0 2516 1438 - samut prakan 5 Thanon Bang Na-Trad Km.18 Branch 0 2470 6611-8 ext. 128 - 6 Free Zone Suvarnabhumi Sub-Branch 0 2134 1916 - Upcountry chon buri 7 Laem Chabang Branch 0 3849 4931 - 8 Bang Pakong Industrial Estate Branch 0 3821 3555-9 ext. 114 - rayong 9 Mab Ta Phut Branch 0 3860 7518-9 ext. 103 - 10 Ban Chang Branch 0 3860 4704 - phuket 11 Phuket Branch 0 7621 3914 - songkhla 12 Thanon Saiburi Songkhla Branch 0 7430 7047 -

Remark: 1 Business Hour: Monday-Friday 8.30-16.00 hrs.

282 ANNUAL REPORT 2007 Corporate Business Center Business Hours: Monday-Friday 8.30 - 16.30 hrs.

No. Corporate Business Center Tel. Fax. Bangkok and Metropolitan Bangkok 1 Rat Burana 0 2470 3400 0 2470 2948-9 2 Silom 0 2234 7050 ext. 5477-8 0 2235 0322 3 Bangmod 0 2428 9870-4 ext. 101-14 0 2428 9875 pathum thani 4 Nava Nakorn 0 2529 5416 0 2529 5419 samut prakan 5 Thanon Bang Na-Trad Km.18 0 2312 6032-35 0 2312 6036 UpCOUNTRY chon buri 6 Bang Pakong Industrial Estate 0 3845 8971-5 0 3845 8976 7 Laem Chabang 0 3849 3830-2 0 3849 3833 nakhon ratchasima 8 Hua Tha Le Nakhon Ratchasima 0 4425 8723 0 4425 8883 nakhon sawan 9 Thanon Sai Asia Nakhonsawan 0 5637 2231-6 0 5637 2239

ANNUAL REPORT 2007 283 SME Business Center

Bangkok and Metropolitan Business Hours: Monday-Friday 8.30 - 16.30 hrs.

No. SME Business Center Tel. Fax. 1 Bang Khun Non 0 2424 6573-4 0 2424 7716 2 Bang Khun Thian 0 2476 5421-4 0 2476 8608 3 Bang Phli 0 2317 1282-6, 0 2316 7563-7 0 2317 1287, 0 2567 4828 4 Dao Khanong 0 2476 8995, 0 2877 5677-81 0 2476 8820, 0 2877 5683-4 5 Hua Mak 0 2378 4561-5 0 2378 4567-8 6 Lat Phrao 25 0 2511 5890-4 0 2511 5899 7 Nava Nakorn 0 2529 3127-8, 0 2529 3595 0 2529 6310, 0 2529 6301 8 Om Yai 0 2811 6570-4 0 2811 6574-5 9 Phahon Yothin Main Branch 0 2273 3679, 0 2273 1224 0 2273 3771, 0 2273 1575 10 Phetkasem 51 0 2801 3630-4 0 2801 3635-6 11 Phra Khanong 0 2381 6194-8, 0 2711 2752 0 2711 2753 12 Phra Pradaeng 0 2464 0691-3 0 2464 0694 13 Rangsit 0 2567 4936, 0 2567 1087, 0 2567 4586 0 2567 4828 14 Si Yaek Wang Hin 0 2570 1861-3 0 2570 1865 15 Silom Main Branch 0 2634 4021-5, 0 2237 2961-5 0 2234 7448, 0 2237 2966-7 16 Sukhumvit 33 (Bang Kapi) 0 2261 4455-8, 0 2260 2566-8 0 2261 4269, 0 2237 2966-7 17 Thanon Chaeng Watthana 0 2982 9927-30, 0 2575 2395, 0 2575 2394 0 2982 9767 18 Thanon Phattanakan 0 2320 0059-60, 0 2321 7269-70 0 2321 1972 19 Thanon Sathon 1 0 2237 4133-7 0 2237 4138 20 Thanon Sua Pa Main Branch 0 2224 0955, 0 2225 9433-4 0 2224 0917, 0 2222 5800 21 Thanon Thepharak 0 2380 5724-7 0 2380 5732 Samut Prakan

284 ANNUAL REPORT 2007 Central

No. SME Business Center Tel. Fax. 1 Pran Buri 0 3262 3913-4 0 3262 3915 2 Ratchaburi 0 3232 8164-5 0 3232 8166 3 Rojana Industrial Park Sub Branch 0 3533 7040-1 0 3533 7060 4 Thanon Setthakit 1 Samut Sakhon 0 3442 4918-21, 0 3481 6956-8 0 3442 4922, 0 3481 6959 5 Thanon Surasongkhram Lop Buri 0 3641 4080-1 0 3641 1615

North

No. SME Business Center Tel. Fax. 1 Chiang Rai 0 5360 1747-9, 0 5371 9781-3 0 5360 1750, 0 5371 7490 2 Ha Yaek Khok Matum Phitsanulok 0 5530 1129-32, 0 5537 8116-8 0 5530 4976, 0 5537 8119 3 Phrae 0 5452 2138 0 5452 2137 4 Si Yaek Sanambin Chiang Mai 0 5320 2533-6 0 5320 2537 5 Sukhothai 0 5561 6362-5, 0 5561 6359-61 0 5561 6314, 0 5561 2855 6 Thanon Chang Klan Chiang Mai 0 5382 0100-4 0 5381 9188 7 Thanon Sawanwithi Nakhon Sawan 0 5637 2155-7, 0 5631 1850-3 0 5637 2158, 0 5622 1580 8 Thanon Tha Phae Chiang Mai 0 5328 0803, 0 5328 4419 0 5328 0785

Northeast

No. SME Business Center Tel. Fax. 1 Buriram 0 4461 8738-41 0 4461 8736 2 Hua Tha Le Nakhon Ratchasima 0 4425 6984, 0 4424 4527 0 4425 6985 3 Roi Et 0 4351 6310, 0 4351 6085-7 0 4351 6362 4 Sakon Nakhon 0 4271 5372 0 4271 5370 5 Thanon Chomphon 0 4424 2884, 0 4424 2772 0 4426 8211 Nakhon Ratchasima 6 Thanon Na Muang Khon Kaen 0 4322 5774, 0 4322 5771-3 0 4322 8370, 0 4322 1506 7 Thanon Phrom Thep 0 4524 4386, 0 4525 6424 0 4524 0607, 0 4525 6451 Ubon Ratchathani 8 Thanon Prajak Udon Thani 0 4221 2058 0 4222 1350 9 Thanon Thevaphiban Roi Et 0 4351 4021, 0 4351 3810 0 4351 2613 10 Udon Thani 0 4224 9279 0 4224 9514

ANNUAL REPORT 2007 285 East

No. SME Business Center Tel. Fax. 1 Bang Pakong 0 3853 2623-6 0 3853 2627 2 Chachoengsao 0 3881 6300-1 0 3881 6297 3 Kabin Buri 0 3728 1394-5 0 3728 1389 4 Laem Chabang 0 3849 5136-40 0 3849 3833 5 Na Klua 0 3872 6571-2, 0 3841 0048 0 3872 6572 6 Rayong 0 3887 6265-6 0 3887 6267 7 Thanon Chantha Udom Rayong 0 3861 5801-3 0 3861 5804 8 Thanon Sukhumvit Chon Buri 1 0 3879 0148-50 0 3879 0147 9 Thanon Triratana Chanthaburi 0 3932 1945-6 0 3932 1947

South

No. SME Business Center Tel. Fax. 1 Chumphon 0 7750 6651-3, 0 7751 2189-90 0 7750 6654, 0 7751 2191 2 Ko Samui 0 7724 8349-51 0 7724 8352 3 Nakhon Si Thammarat 0 7534 4376, 0 7534 1878 0 7534 5858 4 Pattani 0 7333 1041 0 7333 1040 5 Phuket 0 7621 4695, 0 7625 6890-3 0 7621 4740, 0 7625 6894 6 Surat Thani 0 7727 5981-3, 0 7727 5985-6 0 7727 5975, 0 7727 5984 7 Talat Hua It Nakhon Si Thammarat 0 7534 4311, 0 7534 4331 0 7534 4361 8 Thanon Phetkasem Hat Yai 0 7423 6482, 0 7423 6559 0 7422 5154, 0 7423 6448

286 ANNUAL REPORT 2007 OVERSEAS OFFICE

Los Angeles International Branch Beijing Representative Office 350 South Grand Avenue, Suite 3050, Suite 22-C, CITIC Building, Los Angeles, CA. 90071, USA 19 Jianguomenwai Dajie, Beijing 100004, China Tel : (1) (213) 680-9331-7 Tel : (86) (10) 6500-8333 Fax : (1) (213) 620-9362 Fax : (86) (10) 6500-7899 SWIFT : KASI US 6L Chief Representative : Mr. Chavalit Nithagon Telex : 184778 KBANK US E-mail : [email protected] General Manager : Mr. Prasertchao Thuvanuti E-mail : [email protected]

Hong Kong Branch Shanghai Representative Office Suite 2502-4, 25th Floor, Two Pacific Place, Suite 2708, China Insurance Building , 88 Queensway, Admiralty, Hong Kong 166 Lujiazui Road (East), Pudong, Shanghai 200120, Tel : (852) 2526-6811-5 China Fax : (852) 2868-4342 Tel : (86) (21) 6841-9528-9 SWIFT : KASI HK HH Fax : (86) (21) 6841-9530 Telex : 65704 KBANK HX Chief Representative : Mr. Suwat Aviruttapong General Manager : Mr. Chaivudh Chaiphan E-mail : [email protected] E-mail : [email protected]

Cayman Islands Branch Kunming Representative Office P.O.Box 1034 GT, Harbour Place, 4th Floor, Suite 2708, Expo Building, 45 Tuodong Road, 103 South Church Street, Grand Cayman KY1-1102, Kunming, Yunnan 650011, China Cayman Islands Tel : (86) (871) 310-1092, 318-2727 C/O Close Bank (Cayman) Limited Fax : (86) (871) 310-5568 Tel : (1) (345) 814-1574 Chief Representative : Mr. Teerapong Hongboonyarak Fax : (1) (345) 949-8499 E-mail : [email protected] Manager : Mr. Kitichai Larlitlertvong E-mail : [email protected]

Shenzhen Branch 7th Floor, An Lian Building, B03-05, 4018 Jin Tian Road, Fu Tian District, Shenzhen 518026, China Tel : (86) (755) 8229-1298 Fax : (86) (755) 8222-7150 Telex : 420328 KBANK CN General Manager : Mr. Sawat Laisupunawong E-mail : [email protected]

ANNUAL REPORT 2007 287 K companIES

KASIKORN FACTORING CO., LTD. KASIKORN SECURITIES PCL Head Office Head Office Company Address : 252/20 Muang Thai-Phatra Tower 1, Company Address : 400/22 KASIKORNBANK Building, 16th Floor, Ratchadaphisek Road, 19th Floor, Phahon Yothin Road, Huaykwang, Bangkok 10310 Samsen Nai, Phayathai, Bangkok Tel : 0 2290 2900 10400 Fax : 0 2277 3060 Tel : 0 2696 0000 KFactoring Call Center : 0 2290 2900 Fax : 0 2696 0099 Website : www.kasikornbankgroup.com KSecurities Call Center : 0 2696 0011 Website : www.kasikornbankgroup.com Business Service Centers Open Monday-Friday 8.30-17.00 hrs. Business Service Center

Business Service Open Monday-Friday 8.30-17.00 hrs. No. Tel. Fax. Center Business Service No. Tel. Fax. 1 Chon Buri 0 3827 9004-5 0 3827 7996 Center 2 Ayutthaya 0 3533 7257-8 0 3533 7262 1 Sua Pa 0 2622 9153 0 2622 9154

KASIKORN ASSET MANAGEMENT CO., LTD. KASIKORN LEASING CO., LTD. Head Office Head Office Company Address : 252/38-41 Muang Thai-Phatra Tower 1, Company Address : 400/22 KASIKORNBANK Building, 30th-32nd Floor, Ratchadaphisek Road, 17th Floor, Phahon Yothin Road, Huaykwang, Bangkok 10320 Samsen Nai, Phayathai, Bangkok Tel : 0 2693 2300 10400 Fax : 0 2693 2320 Tel : 0 2696 9900 KAsset Call Center : 0 2276 2233 Fax : 0 2696 9977 Website : www.kasikornbankgroup.com KLeasing Call Center : 0 2696 9999 Website : www.kasikornbankgroup.com KASIKORN RESEARCH CENTER CO., LTD. Head Office Business Service Centers Company Address : 400/22 KASIKORNBANK Building, Open Monday-Friday 8.30-17.00 hrs. 2nd Floor, Phahon Yothin Road, Business Service No. Tel. Fax. Samsen Nai, Phayathai, Bangkok Center 10400 Tel : 0 2273 1144 1 Chon Buri 0 3879 2131 0 3879 2132 Fax : 0 2270 1218 2 Songkhla (Hat Yai) 0 7424 7721 0 7424 7722 KResearch Call Center : 0 2273 1144 3 Ratchaburi 0 3232 2171 0 3232 2172-3 Website : www.kasikornbankgroup.com 4 Phitsanulok 0 5524 5161 0 5524 5162-3 5 Chunthaburi 0 3934 6351 0 3934 6352

288 ANNUAL REPORT 2007 SUMMARY OF SPECIFIED ITEMS PER FORM 56-2 IN 2007 ANNUAL REPORT (Presented in accordance with SEC notification Ref. Kor. Jor. 40/2540 regarding principles, conditions and methods in presentation of financial data and operation results of a company which issues securities)

Items Page Board of Directors’ Report 7 Report of the Board of Directors’ Responsibilities for Financial Reports 72 Report of the Audit Committee 73 Corporate Governance Committee Report 194 1. Company information 1.1 Company 256 1.2 Other companies in which the proportion of shares held is 10% or greater 251-253 1.3 Other references 256 2. Financial summary 2.1 Data from financial statements 188-191 2.2 Financial ratios 4 3. Nature of business 3.1 Business undertakings of the Bank and affiliated companies 10-51 and division of work policies 3.2 Income structure 19 3.3 Revision in business undertakings 26-46 4. Risk factors 52-69 5. Shareholders and management 5.1 Shareholders 257 5.2 Management 5.2.1 Management structure 203-222/234-235 5.2.2 Selection of Board members and management 205/212 5.2.3 Remuneration to directors and executives 219-222 5.2.4 Corporate governance 196-222/224-231 5.2.5 Rules of proper use of insider information 198 5.2.6 Internal control and auditing systems 217-218 5.3 Dividend policy 223 6. Related party transactions 157-165/216-217 7. Management discussion and analysis 12-51 8. Financial statements 8.1 Consolidated and the Bank’s financial statements 75-83 8.2 Auditors’ fees 218-219 9. Industrial situation and competition 12-51 10. Other factors that may affect investment decisions 10.1 Legal disputes 231 10.2 Binding obligations on future share issues 151 11. Information on debentures or financial instruments 149-150 (In cases of previous sale offers of debentures and financial instruments which have not yet reached maturity)

ANNUAL REPORT 2007 289

KASIKORNBANK PCL 1 Soi Kasikornthai, Ratburana Road, Bangkok 10140 Thailand Tel. +66 2222 0000 Fax. +66 2470 1144-5 K-Contact Center 0 2888 8800 TELEX: 81159 KBANK TH, 82542 KBANK TH, 84749 KBANK TH SWIFT: KASITHBK Website: www.kasikornbankgroup.com