A pioneer in Thailandûs development, a pillar of stability and an innovative organization which is growing together with the Thai people. These symbols of tangible and successful change are not the beginning but have endured for the last 60 years, reflecting Bangkok Bankûs far-sighted vision, effective strategies, and dynamic development. Bangkok Bank is well placed to adapt to the competitive challenges of todayûs dynamic era and maintain its position of Thailandûs leading bank. AW P1 1 24/3/05, 11:51 AM 60 Years with Bangkok Bank ç We are proud of our relationships with customers. People came to us, not only to make deposits or loans, but also for business advice on their investment and how to make their businesses sustainable. Current building Bangkok Bankûs headquarters in Bangkokûs busy If the customer needed funds, we tried to sort it out immediately. If one Silom Road which was opened in 1982. wanted to run a business, we provided him with tips. This was the kind of service that no other Thai bank had offered to their customers at that time. We worked seven days a week, and customers never stopped The Bank has seen many changes with modernization and coming. We were determined to provide services at our best, so that globalization over the last sixty years, but one aspect will never customers would grow together with usÇé change, and that is its commitment to providing the best quality These were the words of Chin Sophonpanich, the founder service for all its customers. As Bangkok Bank moves into a new and foremost benefactor of Bangkok Bank, in an interview to the Asian era, it will continue to strive for excellence and be both a thinking Finance magazine, on the occasion of his being awarded Banker of the partner and close friend for its customers in line with its motto Year in 1982. çpuen koo kit mit koo baané. It has been sixty years since Bangkok Bank started its operations on December 1, 1944. At a time when foreign banks Old building Bangkok Bank started off in a commercial building in dominated the local scene, Bangkok Bank was proud to say it was founded the Chinatown district of Bangkok on December 1, 1944. The Bank by the capital and knowledge of the Thai people with Thai customers in thrived and went on to play a major role in the expansion and development of modern Thailand. mind. From its humble beginnings, the Bank has pioneered, fostered and expanded its banking services, both locally and internationally, with one important aspect in mind: its customers. Throughout the last sixty years the key to Bangkok Bankûs success has been its commitment and sensitivity to better the livelihoods of the people of Thailand and support the commercial and industrial growth of the nation. It has been proud to maintain its reputation as the leading commercial bank in Thailand as it moves forward into a new era of banking. Today Bangkok Bank has maintained its commitment to quality customer service through new and innovative developments and technology. Services such as the financial information website, internet banking services, credit cards, ATMs, the Bualuang Phone and seven-days-a-week micro branches have made banking more accessible to everyone. 2 Annual Report 2004 Bangkok Bank Public Company Limited AW p2-3/60ªï+‡ß‘”§—≠ * 2 24/3/05, 11:58 AM Financial Performance Indicators Percentage change 2004 2003 2002 2004/2003 2003/2002 Consolidated financial performance (million baht) Assets 1,407,347 1,363,339 1,250,956 + 3.2 + 9.0 Loans and advances (net of loan loss provisions) 1 824,690 715,964 686,492 + 15.2 + 4.3 Deposits 1 1,195,366 1,123,294 1,070,694 + 6.4 + 4.9 Liabilities 1,292,097 1,260,849 1,195,261 + 2.5 + 5.5 Shareholdersû equity - net 115,251 102,490 55,695 + 12.5 + 84.0 Interest and dividend income 48,742 48,195 52,505 + 1.1 - 8.2 Total income 68,289 70,241 67,598 - 2.8 + 3.9 Profit (loss) before tax 2 17,817 11,514 6,287 + 54.7 + 83.1 Net profit (loss) 3 17,620 11,355 6,271 + 55.2 + 81.1 Per share (baht) Profit (loss) before tax 2 9.34 7.79 4.29 + 19.9 + 81.6 Net profit (loss) 3 9.23 7.69 4.28 + 20.0 + 79.7 Par value 10.00 10.00 10.00 - - Book value 2 60.38 53.70 37.98 + 12.4 + 41.4 Share prices - range 113.00 - 83.00 113.00 - 48.75 66.50 - 36.25 - - - year-end 104.00 109.00 49.50 - 4.6 + 120.2 Financial ratio (%) Rate of return on average assets 2 1.28 0.87 0.50 + 0.41 + 0.37 Rate of return on average equity 2 16.24 14.45 12.68 + 1.79 + 1.77 Net profit (loss) to total income 3 25.80 16.17 9.28 + 9.63 + 6.89 Capital to risk assets 13.49 15.88 11.54 - 2.39 + 4.34 Remarks 1. Not including interbank and money market items 2. Including minority interests 3. Not including minority interests 3 Annual Report 2004 Bangkok Bank Public Company Limited AW p2-3/60ªï+‡ß‘”§—≠ * 3 24/3/05, 11:58 AM The countryûs largest ATM network Convenient and fast service Comprehensive financial More than using leading technology advisory services the eye can seeÇ Self service terminals Wide variety of products and Service excellence with quality throughout the country Bangkok Bank is not just a bank, but an services for all customer groups Bualuang iBanking innovator that uses modern products and The countryûs largest Complete financial convenient and efficient services to help its micro branch network services Business banking advice from customers to meet the challenges of a new era. Bualuang Phone experienced professionals p4-5 CONCEPT 4-5 24/3/05, 10:47 C h a t r i S o p h o n p a n i c h C h a i r m a n Message from the Chairman The past year has seen Bangkok Bank post strong profit growth, built on the back of continued growth in lending, reduced cost of funding and increasing income from transaction fees. By leveraging off the strength of our customer base, proactive marketing by our branch and business center networks and targeted promotional campaigns, we were able to increase lending income by nearly 10 per cent, the strongest growth in six years. And, while interest rates remained relatively low, deposits continued to rise, as did fee income as customers moved to new fee-based products and services. We also reduced significantly our funding costs with the redemption and adjustment to the terms of Capital Augmented Preferred Securities (CAPS). These factors all helped us to record our fourth consecutive year of positive financial results, enabling us to pay our first dividend since the 1997 economic crisis › a timely reward for shareholders as the Bank celebrated its 60th year of operation. 6 Annual Report 2004 Bangkok Bank Public Company Limited Massage P.6-9/T/E 6 24/3/05, 10:53 Despite a successful financial year, we recognize that this is no time to rest on our laurels. Economic growth is slowing down, at a time when competition is increasing. The Governmentûs Financial Master Plan will lead to the formation of new banks which will be aggressively targeting our most profitable customer segments. And the opening up of the financial sector even further with new free trade agreements will undoubtedly heighten exposure to external players. Meanwhile Basel II will usher in a new era of regulatory compliance which will potentially add to the cost of capital. Balanced against thesethese cautionary factorsfactors we are expectingexpecting growth opportunitiesopportunities fromfrom increasingincreasing demanddemand for financialfinancial services due to regionalregional economic growthgrowth and the continuedcontinued expansionexpansion ofof thethe middlemiddle andand affluentaffluent classesclasses inin Thailand.Thailand. FortunatelyFortunately overover thethe pastpast fewfew years years we we have have put put in in place place new new organizational, organizational, sales sales and and service service and and technology technology systemssystems whichwhich willwill help help us us approach approach the futurefuture asas aa stronger,stronger, fitterfitter bank, bank, readyready toto confrontconfront new new challenges challenges andand makemake thethe most ofof ourour considerable considerable advantages. We intendintend toto fully fully leverage leverage the the power power of of our our brand, brand, our our technology technology systems, systems, our our branch branch andand businessbusiness networks toto maintainmaintain andand buildbuild ourour marketmarket share.share. OurOur peoplepeople holdhold thethe keykey toto retaining retaining ourour customers customers andand attractingattracting newnew onesones andand II amam confidentconfident the BankûsBankûs approach approach of of listening listening to to and and anticipating anticipating the the needs needs of itsof itscustomers customers and and being being an innovativean innovative and andtrusted trusted partner partner is the is rightthe right formula formula as Thailand as Thailand enters enters a period a period of growth of growth and competition.and competition. Bangkok Bank, with its unrivalled commercial banking franchise and brand name, its large scale multi-tiered distribution platform, its long standing customer relationships and its proven ability to move with the time, is well positioned to meet the changing needs of our customers and grow as Thailand grows. I would like to take this opportunity to thank our customers, partners, stakeholders and members of the Board of Directors for their support during the year. I would also like to thank staff and management for their efforts and continued commitment to our common goals during a successful period of change.