YOUR SUCCESS IS OUR MISSION ANNUAL REPORT 2012 Content Introduction Kiatnakin Bank Milestone...........................................................................................................................................................................................8 Vision and Mission ...................................................................................................................................................................................................10 Awards and Commendations ................................................................................................................................................................................11 Financial Highlights ..................................................................................................................................................................................................12 Report from the Board of Directors ......................................................................................................................................................................15 Board of Directors ....................................................................................................................................................................................................18 Executive Committee .................................................................................................................................................................................................20 Report on the Social Responsibility, Community, and Environment ..............................................................................................................22 The Human Development & National Development with Kiatnakin Project ................................................................................................24 Kiatnakin Patra Finance Group 33 Business Operation ...................................................................................................................................................................................................36 Risk Management and Risk Factors .....................................................................................................................................................................54 Management Discussion and Analysis.................................................................................................................................................................64 Corporate Governance 76 Report of the Audit Committee ..............................................................................................................................................................................90 Report of the Nomination and Remuneration Committee ...............................................................................................................................92 Report of the Compliance and Governance Committee ..................................................................................................................................93 Major Shareholders ..................................................................................................................................................................................................95 Management Structure .............................................................................................................................................................................................96 Dividend Policy ......................................................................................................................................................................................................112 Factors Affecting Investment Decisions .............................................................................................................................................................113 Financial Report Report of the Board of Directors Responsibilities for the Financial Statements ......................................................................................116 Report of the Independent Certified Public Accountants ..............................................................................................................................117 Financial Statements and Notes to the Financial Statements .....................................................................................................................118 Other Informations Board of Directors and Management ..............................................................................................................................................................201 Directorship of Directors and Executives .........................................................................................................................................................215 General Information .............................................................................................................................................................................................216 Capital Structure ...................................................................................................................................................................................................219 Branch Offices .......................................................................................................................................................................................................221 Summary of Specified Items per Form 56-2 .................................................................................................................................................224 We advise, You advance Our professional staff provide you lucrative financial products and solutions to make you succeed before others. We strengthen, You secure Kiatnakin Bank merged with Phatra Capital to become ‘High Performance Bank’. We now expand ranges of business opportunities and reduce economic risk in order to provide diverse services distinctively and assuredly. We sustain, You stride We operate business under good corporate governance in concern of best outcome for our customers, business partners, shareholders, community and society, with aiming to walk alongside you on a sustainable and stable growth path. 008 Annual Report 2012 Kiatnakin Bank Kiatnakin Bank Milestone Annual Report 2012 Kiatnakin Bank 009 The1971 Beginning. Kiatnakin Finance and In1973 two years, it was awarded Became1982 Broker No. 19 on the Stock Securities Company Limited established License to operate in finance and Exchange of Thailand. with the initial authorized share capital securities. of Baht 10 million. Listed1988 on the Stock Exchange It1993 became a Public Company Limited. Together1997 with 57 other financial of Thailand. institutions, it was forced to temporarily suspend operations due to the economic crisis. Granted1998 permission by the Ministry It2004 was received an upgrade in credit Granted2005 permission by the Ministry of of Finance to resume business rating from “BBB+” to “A-” by Finance to establish a commercial bank operations. TRIS Rating Company Limited. under the name Kiatnakin Bank PCL. “Best2007 Shareholder Treatment Awards” One2008 of 22 from 448 listed companies Acquired2011 credit rating at “A- / from Thailand Securities Depository that awarded a “Excellent” rating for Stable”, with “Positive” Outlook Company Limited (TSD) corporate governance from the by TRIS Rating Company Limited. Thai Institute of Directors Association (IOD) 2012 September 11, 2012 Kiatnakin Bank Public Company Limited and Phatra Capital Public Company Limited announced the completion of merger to be “Kiatnakin Phatra Financial Group”, aiming to offer clients with its expertise in 2 areas of commercial banking and capital market, to create the excellence in every practice of its core business and to provide the ultimate financial services to clients. Kiatnakin Bank Public Company Limited provides full range of financial and investment services professionally as well Nowadays as offers excellent products and services to support customers’ success. 010 Annual Report 2012 Kiatnakin Bank Vision To be recognized as the bank that stands for customers’ success and builds a sustainable community Mission 1. To provide a complete and expert service and to enhance customers’ potential for a sustainable achievement. 2. To operate under corporate governance in concern of best outcome for all stakeholders. Corporate Value Expertise Result Orientation Self Motivation Trustworthiness Entrepreneurship Integrity Accountability Annual Report 2012 Kiatnakin Bank 011 Awards of Success “A-” Credit Rating By TRIS Rating Co., Ltd. Investers Choice Award The Bank and its debentures were rated “A-” with Received “Investors Choice Award” 100 scores for the fourth “POSITIVE” outlook by TRIS Rating Co., Ltd. consecutive year (2009-2012) from Annual General Meeting (AGM), conducted by Thai Investor Association (TIA) “Excellent” 100 Scores under Volunteer Advocacy Project which corporated by the (The sixth consecutive year) Securities and Exchange Commission Thailand (SEC) and the Stock Exchange of Thailand (SET) Received “Excellent” 100 scores for the sixth consecutive year from Annual General Meeting (AGM) in 2012, conducted by Thai Investor Association (TIA) and the Securities and Commission SET Award of Honor Thailand (SEC) (Corporate Governance Report) Received “SET Award of Honor”