Annual Report 2018 Bangkok Bank Public Company Limited Bangkok Bank Public Company Limited Bangkok Bank Public Annual Report 2018 Bangkok Bank Public Company Limited Head Office 333 Silom Road, Silom, Bang Rak, Bangkok 10500, Thailand Tel. (66) 0-2231-4333 Bualuang Phone 1333 www.bangkokbank.com + SUMMARY OF SPECIFIED ITEMS PER FORM 56-2 Items Page ¥ÄÁ¾¸Î¶Ã¹·ÊȾúÈÈÄ˺Ç˾ºÌ £¶ÉÊǺĻ·ÊȾúÈÈ L O N G L I V E §¾ÈÀ»¶¸ÉÄÇÈ ÄÂŶÃξûÄǶɾÄöùÄɽºÇ¾ÂÅÄÇɶÃɾûÄǶɾÄà H I S M A J E S T Y ¨½¶Çº½ÄÁ¹ºÇÈ ¾Ë¾¹ºÃ¹ÅÄÁ¾¸Î T H E K I N G ¢¶Ã¶¼ºÂºÃÉÈÉÇʸÉÊǺ ÄÇÅÄǶɺ¼Ä˺Çöøº ÄÇÅÄǶɺÈĸ¾¶ÁǺÈÅÄÃȾ·¾Á¾É¾ºÈ §º»ºÇÉĨÊÈɶ¾Ã¶·¾Á¾ÉΧºÅÄÇÉ ÃɺÇöÁ¸ÄÃÉÇÄÁ¶Ã¹Ç¾ÈÀ¶ö¼ºÂºÃÉ ĔúłÒşôłČ%ęşúîŰłşŦȦeÒĸÒčúĶúĸŰȦÒĸôŰÒČČ ÒĸčĪłĪÒĸĪŸíĭęîłĶŜÒĸƗ\ęĶęŰúô §ºÁ¶Éº¹Å¶ÇÉÎÉǶÃȶ¸É¾ÄÃÈ ¾Ã¶Ã¸¾¶Á¾Ã»ÄǶɾÄà ¢¶Ã¶¼ºÂºÃɹ¾È¸ÊÈȾÄöù¶Ã¶ÁÎÈ¾È £ÄɺÃ˺ÈÉÄÇȸ¶ÃÈÉʹλÊÇɽºÇ¾Ã»ÄǶɾÄûÇÄÂɽº¶ÃÀãÈÄÇÂ̽¾¸½¶Åź¶ÇÄÃÌÌÌȺ¸ÄÇɽÄÇɽº¶ÃÀãÈ̺·È¾Éº }ÌÌÌ·¶Ã¼ÀÄÀ·¶ÃÀ¸ÄÂ~ 19_1512_BBL_AR 2018_InCo 06-03-62.indd 4-5 Annual Report 2018 | Bangkok Bank Public Company Limited + CONTENTS 4 _ Who We Are 88 _ Board of Directors 8 _ Our 2019 Focus 100 _ Board of Directors and Top Executives 10 _ Financial Performance Indicators 105 _ Appropriation of Profit for the Year 2018 (Consolidated) 106 _ Report of the Nomination and 11 _ Sustainability Remuneration Committee 14 _ Message from the Chairman, 107 _ Report of the Board of Directors' the Executive Chairman and Responsibilities for the Financial the President Statements 18 _ Management Report 108 _ Report of the Audit Committee 20 _ Management Discussion and Analysis 110 _ Report of the Independent Certified Public Accountants 54 _ Ten-Year Statistical Summary (Consolidated) 114 _ Financial Statements 56 _ Awards 2018 122 _ Notes to the Financial Statements 58 _ Risk Factors and Risk Management 204 _ General Information 71 _ Corporate Governance 212 _ List of Branches 87 _ Organization Chart Bangkok Bank Public Company Limited | Annual Report 2018 + Vision To be a bank which provides quality financial services in line with customers’ requirements, and is well equipped with qualified human resources and world-class technology and working systems, while maintaining its status as a well-established international bank and a leading Asian bank. Annual Report 2018 | Bangkok Bank Public Company Limited 2018 ASSETS 3,116,750 Million Baht LOANS + WHO WE ARE 2,083,160 Bangkok Bank gives people and businesses the Million Baht confidence and support they need to make the right decisions in a changing world. We have been doing DEPOSITS this since our founding to satisfy the unmet needs of Thai people and businesses. 2,326,470 Million Baht USA UK VIETNAM HONG KONG 4 1 1 2 2 MYANMAR CAYMAN 1 ISLANDS 1 LAOS 2 THAILAND MALAYSIA INDONESIA 1,161* 5 3 NUMBER OF BRANCHES * Not including self-service outlets Bangkok Bank Public Company Limited | Annual Report 2018 INTERNATIONAL NETWORK 32 Locations GEOGRAPHIC COVERAGE 15 SCOPE OF OPERATIONS Economies We provide a full range of financial services through six business units: Corporate, Commercial, Business, Consumer, International, and Investment Banking. Our major subsidiaries include Bualuang Securities, BBL Asset Management, Bangkok Bank TOTAL CAPITAL Berhad, and Bangkok Bank (China). ADEQUACY RATIO 18.0 % Corporate Banking Consumer Banking We are Thailand’s market leader in Through our nationwide branch network CHINA corporate banking with industry and digital channels, we offer our specialists serving large Thai corporations customers banking products and 5 6 and multinationals across a wide range services to suit their stage of life, including of industries. financial advice and investment products. JAPAN 2 Commercial Banking International Banking TAIWAN Our Commercial Banking unit focuses With the largest international branch 3 on medium-sized businesses. We work network of any Thai bank, we provide closely with these customers, supporting local knowledge and expertise to them through changing business trends customers with international business PHILIPPINES and leadership transitions. interests. 1 CAMBODIA Business Banking Investment Banking 1 We support our small-business customers In close cooperation with Corporate to gain a competitive edge by sharing Banking, Bualuang Securities and BBL SINGAPORE knowledge, adding value to their Asset Management, our Investment operations, and introducing them to new Banking Group works with clients to 1 opportunities. ensure they have a complete range of effective financing solutions. Annual Report 2018 | Bangkok Bank Public Company Limited Using expert knowledge, commitment as a trusted partner and reliable close friend and technology to better know and serve our customers and all stakeholders. 6 True Friend Work closely with communities and wider society to promote sustainability of Banking is rapidly society and the environment evolving, driven by technology innovation, new entrants and a Digital Revolution greater focus on enhancing customer Focus on innovation, prepare for digital experience. Customers transformation and future challenges are enthusiastically adopting online and cashless transactions, Value Chain Empowerment while branch services are Share financial knowledge and provide concentrating on financial opportunities for access to financial services advice and wealth to small and medium-sized enterprise operators, management. farmers, and needy groups Employee Centric Attract, develop, and retain capable employees able to cope with volatility and rapid changes Ethical Banking Adhere to business ethics in undertaking the Bank’s business and encourage customers and trade partners throughout the business value chain to realize the importance of ethics and sustainable development Bangkok Bank Public Company Limited | Annual Report 2018 SOME OF OUR INITIATIVES FOR CREATING VALUE + Providing valued services and experiences to support urban and digital lifestyles + Partnering with businesses/ technology providers to provide innovative customer solutions + Adding value through shared knowledge 7 + Helping customers build + Making it easy for customers sustainable success and to do their day-to-day wealth banking + Using digital tools such as Big Data and AI to better understand and serve customers Annual Report 2018 | Bangkok Bank Public Company Limited + OUR 2019 FOCUS + Regionalization Connect the region by using our network and leveraging our corporate and international expertise 8 + Urbanization Support business customers with opportunities in infrastructure, the EEC and urban development, and meet the wealth needs of individual customers + Digitalization Enhance customer experience by strengthening our digital banking capability Bangkok Bank Public Company Limited | Annual Report 2018 Business Banking Consumer Banking International Banking + Provide relevant advice and + Enhance customer experience + Support customers to tap support to help customers’ across all channels into regional opportunities sustainable growth + Target new-generation + Target regional supply chains + Focus on promising businesses customers of domestic and international and opportunities investors + Strengthen wealth + Develop new cash management management services + Connect potential business and trade finance banking partners across the region platforms Digital Banking People + Partner with FinTechs and + Prepare staff for digital technology leaders to provide transformation and innovative services new ways of working 9 + Update and enhance customer + Engage and retain channels with advanced new–generation staff integrated technologies + Develop talent and + Improve operational efficiency reinforce ethical practices through innovation and automation Annual Report 2018 | Bangkok Bank Public Company Limited FINANCIAL PERFORMANCE INDICATORS (Consolidated) Percentage Change 2018 2017 2016 2018/2017 2017/2016 FINANCIAL POSITION (MILLION BAHT) AS AT 31 DECEMBER Assets 3,116,750 3,076,310 2,944,230 + 1.3 + 4.5 Loans /1 2,083,160 2,003,989 1,941,093 + 4.0 + 3.2 Loans (less allowance for doubtful accounts) /1 1,930,157 1,863,968 1,821,575 + 3.6 + 2.3 Deposits 2,326,470 2,310,743 2,178,141 + 0.7 + 6.1 Liabilities 2,703,591 2,674,303 2,564,985 + 1.1 + 4.3 Shareholders’ equity /2 412,814 401,724 379,016 + 2.8 + 6.0 OPERATING RESULTS (MILLION BAHT) FOR THE YEAR ENDED 31 DECEMBER Interest income 110,781 105,476 102,443 + 5.0 + 3.0 10 Total income 170,653 160,253 152,747 + 6.5 + 4.9 Profit before provision and tax 66,236 63,520 55,352 + 4.3 + 14.8 Profit before tax 44,271 41,150 39,625 + 7.6 + 3.8 Net profit /2 35,330 33,009 31,815 + 7.0 + 3.8 PER SHARE (BAHT) Profit before tax 23.19 21.56 20.76 + 7.6 + 3.8 Net profit /2 18.51 17.29 16.67 + 7.0 + 3.8 Par value 10.00 10.00 10.00 - - Book value /2 216.26 210.45 198.56 + 2.8 + 6.0 Share prices - range 218.00 - 184.50 207.00 - 159.50 182.00 - 142.50 - year-end 203.00 202.00 159.50 + 0.5 + 26.6 FINANCIAL RATIO (%) Loan to deposit ratio /1 89.54 86.72 89.12 + 2.82 - 2.40 NPL to total loans 3.42 3.88 3.22 - 0.46 + 0.66 Loan loss reserve to NPL 190.93 160.17 173.62 + 30.76 - 13.45 Return on average assets /2 1.13 1.09 1.09 + 0.04 - Return on average equity /2 8.73 8.49 8.59 + 0.24 - 0.10 Net interest margin (NIM) 2.40 2.32 2.34 + 0.08 - 0.02 Cost to income 45.44 43.52 47.71 + 1.92 - 4.19 Tier 1 capital to risk-weighted assets 16.43 16.63 16.40 - 0.20 + 0.23 Total capital adequacy ratio 17.96 18.17 18.32 - 0.21 - 0.15 Remarks : /1 Less deferred revenue /2 Attributable to owners of the Bank Bangkok Bank Public Company Limited | Annual Report 2018 + SUSTAINABILITY + True Friend 11 + Digital Revolution + Value Chain Empowerment + Employee Centric + Ethical Banking I N R E M E M B R A N C E O F M R .