Company Overview 2007 Table of Contents Section 1 Thanachart Group Section 2 Thanachart Group Financial Highlights Section 3 Thanachart Group Strategic Direction Section 4 Summary of Hire Purchase Business Section 5 Appendix Section 1 Thanachart Group Thanachart Group History Thanachart Capital was approved by the Ministry of Finance to operate finance and securities business in 1974. 1974 - 1997 The Company has been a member number 16 of the Stock exchange of Thailand (SET) since 1979, and been a listed company of the SET on April 1, 1982. Finance and Securities businesses were separated in 1997. Thanachart Insurance and Thanachart Life Assurance were established in 1997. 1997-2004 Thanachart Asset Management was established in 1998. Thanachart Bank was established in 2002. Thanachart Securities co-operated with BNP Paribas Peregrine in investment banking, 2005 research, and equity trading in 2005. In March 2006, Thanachart Capital returned its Finance Business License to the MOF. 2006 Thanachart Capital became the holding company of a fully integrated financial services group. Thanachart Bank bought 8 subsidiaries from Thanachart Capital in order to comply with the group’s reorganization plan. 2007 The Bank of Nova Scotia became a strategic partner of Thanachart Bank by holding 24.98% of Thanachart Bank’s issued and paid-up shares. 4 Thanachart Group Strategic Direction Executive Summary 1.TCAP has become a financial holding company 2. Direction • TBANK will become a leading medium sized bank. • Loan Portfolio will be more diversified. • Spread, Yield, and Fee-based Income will be improved. 3. BNS • BNS will tie up relationship by holding 49% of TBANK’s shares in August 2008. • They will help us introduce more products and services. • We will gain management knowledge from them. 4. Performance • ROE of 10-15% will be maintained. • Total Assets of around Baht 500,000 million or more than 5% market share should be achieved within 2010. 5 Thanachart Group TCAP the Holding Company • Thanachart Bank is majority held by Thanachart Capital holding 74.92% and the Bank of Nova Scotia holding Thanachart Capital (TCAP) As of 11 Jan 2008 24.98%. • To comply with the 100.00% 58.45% Consolidated Supervision by 74.92% MAX Distressed BOT and Reorganization Plan 24.98% NFS Distressed of the Group, TBANK bought BNS Asset Asset 8 subsidiaries from TCAP in Management Management July 2007. Asset Leasing - Supporting Insurance Securities Management Hire Purchase Businesses 75.00% 100.00% 100.00% 100.00% Thanachart Thanachart 100.00% Group Leasing Legal & Co., Ltd. Appraisal 100.00% 100.00% Thanachart National100.0% 100.00% Management & Leasing Co., Services Ltd. 100.00% 100.00% Thanachart Thanachart Broker Co., Ltd. Leasing 2000 100.00% Co., Ltd. Thanachart Training & Development 6 Thanachart Group Thanachart Group Business Structure Thanachart Capital Holding Company Full Licensed Bank, Automobile Hire Purchase, Corporate and Mortgage Loans, Trade Finance and Foreign Exchange, Deposits, and Financial Advisory Services. Brokerage, Research, and Investment Banking. Mutual fund, Private Fund, and Provident Fund services. Various types of non-life insurance such as motor insurance, fire and household insurance, marine and cargo insurance, etc.. Various plans of life insurance such as Group Life Insurance, Endowment Plan, Whole Life Plan, etc.. Max Asset Management Co., Ltd. NFS Asset Management Co., Ltd. Purchase and management of distressed assets. 7 Thanachart Group Fact Sheet ASSETS TCAP Unit: Billion Baht BBL • Total of 13,509 shareholders Shareholding Structure 1,573 as at 18 October 2007. KTB 1,211 Top Ten Shareholders % SCB 1,113 • Thanachart Capital is owned 1. Thai NVDR Co., Ltd. 11.16 KBANK 994 by a diverse range of foreign BAY 651 2. Com-link Co., Ltd. 10.42 investors, mostly TMB 619 institutional. 3. MBK Plc. 9.75 SCIB 407 4. Chase Nominees Limited 42 4.71 TBANK 291 • Thanachart Bank is a small 5. Mr. Banpoj Damapong 4.28 BT 205 to medium sized bank with a TISCO 94 niche in consumer finance 6. Morgan Stanley & Co. International Plc. 2.31 and retail lending KK 89 7. The Southeast Life Insurance Co., Ltd. 2.08 ACL 61 8. Caceis Bank Luxembourg 2.07 • Thanachart Bank is the 8th 0 400 800 1200 1600 largest bank in Thailand 9. Clearstream Nominees Ltd. 1.87 Source: SET (as at 31 Dec 2007) according to assets size. 10. State Street Bank and Trust Company 1.75 Thanachart Bank Total 50.40 Market Share Amount Market Share Source: TSD (as at 18 October 2007) (MB) (%) Assets 291,098 4.0 Thanachart Capital Loans 224,940 4.3 • Paid-up Capital 13,331 MB Deposits 242,905 4.2 # Branches 166 3.3 • Total Equity 32,262 MB # ATMs 280 1.2 Source: Company Data (as at 31 Dec 2007) Source: BOT; SET; Company Data (as at 31 Dec 2007) 8 Section 2 Thanachart Group Financial Highlights Thanachart Group Financial Highlights Assets & Liabilities • Thanachart Group has been Assets vs Liabilities Loans vs Borrowings & Deposits able to grow its assets and THB BN THB BN loans. 400 300 272 248 239 321 209 300 286 289 193 263 200 228 159 163 205 139 200 185 130 168 163 106 148 100 100 0 0 2003 2004 2005 2006 2007 2003 2004 2005 2006 2007 Assets Liabilities Loans Borrow ings & Deposits Source: Company Data Source: Company Data Assets Breakdown Liabilities Breakdown % % Interbank & MM Investment Deposits Interbank & MM S-T Borrowings Loans -Net Property Foreclosed Others L-T Borrowings Others 4.0% 12.6% 2.5% 3.8% 5.9% 9.0% 22.6% 1.7% 66.0% 71.9% Source: Company Data (as at 31 Dec 2007) Source: Company Data (as at 31 Dec 2007) 10 Thanachart Group Financial Highlights Loans Portfolio • As the economy slowdown, Loans Growth HP Loans Growth Thanachart was still able to % % grow its loans especially 50.0% from HP loans. 100.0% 75.0% 28.6% • Hire Purchase Loans 25.4% accounted for 79.8% of total 22.3% 43.5% 25.0% 50.0% loans and accrued interest 36.4% 35.5% receivable and 59.5% of total 14.3% assets. 25.0% 16.2% 0.0% 0.0% • Loans CAGR from 2003 to 2004 2005 2006 2007 2007 = 22.5%, and HP CAGR 2004 2005 2006 2007 = 32.5%. Source: Company Data Source: Company Data Unit: Million Baht • HP loans growth declining: Loans and Accrued Interest 2005 % 2006 % 2007 % - Bigger base Manufacturing & Commerce 7,082 4.4 5,914 2.8 7,717 3.2 - Huge repayment Real Estate & Construction 5,113 3.1 7,558 3.6 7,258 3.0 - Economy slowdown Public Utilities & Services 10,281 6.3 7,996 3.8 9,129 3.8 Hire Purchase 121,251 74.4 164,325 78.4 191,025 79.8 Housing Loans 11,120 6.8 9,793 4.7 8,143 3.4 Others 8,114 5.0 13,979 6.7 16,218 6.8 Total 162,961 100.0 209,565 100.0 239,490 100.0 Source: Company Data 11 Thanachart Group Financial Highlights Borrowings & Deposits • As banking branches Deposits Breakdown Branch Expansion expand, an increased portion % of funding will originate from 300 public savings deposits. Current Savings PN < 6M 6M-12M > 1Y BE 0.5% • With the target of 350 200 166 branches within2010, 21.2% 24.4% 133 Thanachart has been continuously aggressive in 100 66 opening its outlets. It is 1.6% expected to open around 80 15.9% 5 13 branches in 2008. 0 20.3% 2002 2003 2004 2005 2006 2007 16.3% • In term of No. of branches, Source: Company Data (as at 31 Dec 2007) Source: Company Data Mini vs Full branches 77 : 89 Unit: Million Baht BKK vs Up-country 86 : 80. Borrowings & Deposits 2005 2006 2007 % Deposits + B/E from Public 148,371 203,341 241,985 89.0% • Expansion of banking Public Deposits 148,371 198,527 190,626 70.1% branches will lead to more fund raising, stability of B/E from Public - 4,814 51,359 18.9% deposits, channels of Interbank and Money Market Items 2,601 4,507 4,769 1.8% distribution, and cost of funds reduction. Borrowings 41,950 40,221 25,086 9.2% Debentures 7,521 7,087 6,845 2.5% Promissory Notes 15,964 15,665 7,730 2.8% B/E and Others 18,465 17,469 10,511 3.9% Total 192,922 248,069 271,840 100.0% Source: Company Data 12 Thanachart Group Financial Highlights Performance • Total Income up 35.9% yoy from Total Income Net Interest Income + NII up 31.7% . THB MN THB MN + Non-Interest Income up 39.7%, 19,774 mainly from fees and services 20,000 10,000 9,098 income and income from HP 14,552 8,000 6,909 related business (life/non-life 15,000 6,514 11,658 5,784 insurance). 10,733 6,000 9,707 4,425 10,000 4,000 • NII up 31.7% yoy from 5,000 + HP Interest Income up 25.8%. 2,000 + Interest Expenses dropped by 0 0 3.4%. 2003 2004 2005 2006 2007 2003 2004 2005 2006 2007 Source: Company Data Source: Company Data • Net Profit increased by 92.0% yoy. Pre-Provision Profit Net Profit THB MN THB MN 7,500 6,925 3,500 3,104 2,983 2,818 5,703 2,669 6,000 5,670 2,800 4,500 3,816 2,100 3,509 1,468 3,000 1,400 1,500 700 0 0 2003 2004 2005 2006 2007 2003 2004 2005 2006 2007 Source: Company Data Source: Company Data 13 Thanachart Group Financial Highlights Financial Ratios • Financial Ratios improved ROAA ROAE from 2006.