kbank investor presentation 2q15 final · investor presentation as of 2q15 (revised 2015 financial...

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KASIKORNBANK

For further information, please contact the Investor Relations Unit or visit our website at www.kasikornbank.com

Investor Presentation as of 2Q15(Revised 2015 Financial Targets)

August 2015

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Consolidated (as of June 2015)Assets Bt2,512bn (USD74.4bn) Ranked #4 with 14.5% market share** Loans* Bt1,567bn (USD46.4bn) Ranked #4 with 14.6% market share** Deposits Bt1,669bn (USD49.4bn) Ranked #4 with 15.1% market share** CAR 17.39% ***ROE (1H15) 18.03%ROA (1H15) 1.95%Number of Branches 1,130Number of ATMs 9,335Number of Employees 21,621

KASIKORNBANK at a Glance

Share InformationSET SymbolShare Capital: Authorized Bt30.5bn (USD0.9bn) Issued and Paid-up Bt23.9bn (USD0.7bn)Number of Shares 2.4bn sharesMarket Capitalization Bt452bn (USD13.4bn) Ranked #2 in Thai banking sector 2Q15 Avg. Share Price: KBANK Bt208.91 (USD6.19) KBANK-F Bt209.90 (USD6.21)EPS Bt9.98 (USD0.30)BVPS Bt113.96 (USD3.37)

KBANK, KBANK-F

Established on June 8, 1945 with registered capital of Bt5mn (USD 0.15mn) Listed on the Stock Exchange of Thailand (SET) since 1976

Notes: * Loans = Loans to customers less Deferred revenue

** Assets, loans and deposits market share is based on C.B.1.1 (Monthly statement of assets and liabilities) as of June 2015*** Capital Adequacy Ratio (CAR) has been reported in accordance with Basel III Capital Requirement from 1 January 2013 onwards.

CAR is based on KASIKORNBANK FINANCIAL CONGLOMERATE. KASIKORNBANK FINANCIAL CONGLOMERATE means the company under the Notification of the Bank of Thailand re: Consolidated Supervision, consisted of KBank, K Companies and subsidiaries operating in supporting KBank, Phethai Asset Management Co., Ltd. and other subsidiaries within the permitted scope from the BOT’s to be financial conglomerate

Exchange rate at the end of June 2015 (Mid Rate) was Bt33.78 per USD (Source: Bank of Thailand)

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Table of ContentsTopic Slide Page

Operating Environment 5 - 6

2015 Financial Targets 7

Composition of Growth 8 - 11

The K-Strategy 12 - 13

Capital and Dividend 14 - 15

Summary 16

Appendix 17 - 128

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Topic Slide Page KBank

Strategy and Segment HighlightsRisk and Credit Management Financial Performance

18-3233-3738-61

• 1H15 Highlights• Net Interest Margin• Interest Income - net• Non-interest Income• Net Fee Income• Net Premium Earned - net• Other Operating Expenses• Loan• Asset Quality• Investment in Securities and Funding Structure

39-42434445

46-474849

50-5354-5758-61

The wholly-owned subsidiaries of KBank Muang Thai Life Assurance (MTL) Other Information

62-6970-7778-84

Banking System and Regulations Update 85-92

Government Policy 93-105

Thai Economic Figures 106-126

IR Contact Information and Disclaimer 127-128

Appendix

5

Key Points:

Risk Factors:

Operating Environment: Economic Outlook for 2015 Key GDP Forecasts and Assumptions

0.9

2.82.8

0.0

3.0

2013 2014 2015F

% Y

oY

% YoY 2015F

(as of

23 Mar 2015) Range Base Case

GDP 2.8 2.8 2.3-3.3 2.8

Private Consumption 0.8 2.0 1.3-2.1 1.7

Total Investment -0.8 5.0 4.8-6.0 5.4

Gov't Budget Deficit (% of GDP -1.9 -2.4 -3.2 to -2.4 -2.8

Exports -0.1 0.0 -2.8 to -0.5 -1.7

Imports -0.1 3.5 -5.5 to -3.0 -4.2

Current Account (USD bn) -3.9 8.5 18.9-21.7 20.2

Headline Inflation 2.2 0.5 -0.6 to -0.2 -0.4

Policy Interest Rate* 2.25 1.50 1.25-1.50 1.50

(as of 9 Jul 2015)

2015F

0.9

0.6

2014

-0.3

-8.5

-2.6

-2.9

2.00

13.4

1.9

2013

Recovery momentum of Thailand’s major trading partners

Progress of government budgetary disbursement and investment plans

Movement of global oil and commodity prices

Capital volatility and monetary policy responses

2015 GDP growth currently maintained at 2.8%

Pressure on exports expected due to weak global demand and low commodity export prices, while high household debt is restricting consumer consumption

Quickened government budget disbursement and lively tourism sector bringing hope for a pick up in QoQ growth momentum

Clarity on government infrastructure investments will unlock potential growth

Notes: - 2013 and 2014 GDP components were revised according to the NESDB’s new GDP methodology. However, these changes are not significantly impact 2015 GDP growth projection. (NESDB = The Office of the National Economic and Social Development Board)

- At the latest Monetary Policy Committee (MPC) meeting on August 5, 2015, the Policy Interest Rate was 1.50%Source: KResearch (as of July 9, 2015) and *KBank Capital Markets Research (as of August 5, 2015)

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Government Stimulus Plan (App. pages 93-105) The government has an ambitious plan to promote investment in transport infrastructure projects, including setting up a task force to

encourage related investments from the private sector

Outlook on Europe, the US, China, and ASEAN Global economic recovery remains subpar, but will become more stable in 2015

Eurozone: economy may gain traction as a result of QE and TLTRO*, along with lessening concerns with Greece US: economic recovery is rather broad-based and remains resilient; monetary normalization is on the way China: economic growth is expected to cool further in 2015. However, a hard landing is not likely, given flexibility in China’s monetary

and fiscal policies. Some uncertainties remain, especially the fragile banking system and the health of the property sector. Going forward, China’s reform ambitions will likely help sustain the Chinese economy in the longer term

ASEAN economies: slow economic growth expected, due to a spillover effect from China slowdown. Change in Fed policy may pose downside risks to countries with weak external balances, leading to capital outflows

Outlook on Inflation (App. pages 108 and 111) Headline inflation remains subpar in 2015; however, the Thai government’s energy restructuring plan may limit pass-through from a decline

in global energy prices Although inflation may be negative in 2015, Thailand will not experience deflation due to general prices in consumer basket (excluding

energy items) continuing to post gains

Outlook on Exports and Tourism (App. pages 110 and 112-113) Some improvements expected in exports later in 2015. However, Thai exports face challenges from slow global economic recovery

(especially China), undermined commodities prices, and non-tariff measures by trade partners, along with some structural issues including changing global consumer demand toward certain products

Revenue from tourism will gradually pick up in 2015, with support from China and other Asian markets Investment continues to depend on exports and progress on public spending

Impacts from Fed Policy Normalization (App. page 118-119) Impacts on the Thai economy should be rather modest, given ample domestic liquidity as well as strong external balances e.g. high

international reserves and low external debts

Baht (App. page 107) Appreciation trend of the USD is expected to continue throughout 2015, driven by the prospect of US monetary policy normalization

expected to start in 3Q15, thus, putting downward pressure on the Thai Baht

Operating Environment: Economic Outlook for 2015

Note: * TLTRO = Targeted Longer-Term Refinancing Operations Source: KResearch and KBank Capital Markets Research (as of August 5, 2015)

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Consolidated 2014 Actual 1H15 Actual2015 Targets

(Old)

2015 Targets

(Revised)Notes

ROE 19.38% 18.03% N/A N/A

ROA 1.97% 1.95% N/A N/A

NIM 3.80% 3.66% 3.5-3.7% 3.5-3.7%Ranking maintained among large commercial banks (3)

Loan Growth 6.12% 2.59% YTD

6.44% YoY~ 6% ~ 6% Decent and sustainable loan growth; in line

with economic growth (Page 8 and 51-52)

Non-Interest Income Growth** 16.84% 17.15% YoY Low teens Low teens Mainly driven by fee income and insurance business (Page 9 and 45-48)

Non-Interest Income Ratio 40.04% 43.13% ~ 40% ~ 40%

Cost to Income Ratio*** 44.30% 42.37% Mid-40s Mid-40sCost to income ratio continues to range in the mid-40s; seasonally higher in 2H (Page 11)

Credit Cost per year (bps) 96 bps 130 bps ~ 100 bps Up to 150 bps*Prudent and aligned with market environment and credit cycle (Page 10 and 55)

NPL Ratio (Gross)**** 2.24% 2.39% 2.3-2.5% 2.7-2.8%*Manageable with lingering economic environment (Page 10 and 54)

Revised 2015 Financial Targets

Notes: * Forecast as of June 25, 2015

** Non-Interest Income includes Net Premium Earned - net (Net Premium Earned less Underwriting Expenses) from Muang Thai Life Assurance PCL (MTL); KBank has a 38.25% economic interest in MTL; on the consolidated basis, Bancassurance fees are not included in net fee income, due to the elimination of inter-company transactions (the accounting treatment from the Muang Thai Group Holding consolidation); Non-Interest Income = Total operating income – net less Interest income – net

*** Cost to Income Ratio = Total Other Operating Expenses to Total Operating Income – net (Total Operating income less Underwriting Expenses)**** NPL Ratio (Gross) = NPL (gross) to total loans; NPL (gross ) used in the calculation are loans to general customers and loans to financial institutions that are non-performing loans; total loans used in the

calculation are loans to general customers and loans to financial institutions

8

Composition of Growth: Loans by Business

1H15 2015 Outlook

Corporate Loans

Mainly from long-term credits from industrial agriculture, petroleum and petrochemical products, and real estate

Growth target on long-term investment and high capacity utilization industries with a focus on international trade customers Focused industries: construction materials, hardware, construction and

communication

SME

LoansMainly from short-term domestic credits from automotive & parts,

hardware, and entertainment & services

Growth target reflects demand from domestic consumption and international trade benefits from the FTA and AEC Focused industries: commerce, construction materials, and hardware

Retail

Loans

Mainly from mortgage loans; steady growth in line with industry; still proactively monitoring loan portfolio quality

Conservative growth target in line with industry; maintain leading market position Focus on high value customers; proactively monitor loan portfolio quality

Note: Since 1Q13, as per the Bank of Thailand’s requirement, the Bank has complied with TFRS 8 (Operating Segments) to present operating results for each key segment in financial reports

Loan Definition (more details on loans can be found in App. page 51-52)Corporate Loans: Loans of KBank and KBank’s Subsidiaries in Corporate Segments (Annual sales turnover > Bt400mn)SME Loans: Loans of KBank and KBank’s Subsidiaries in SME Segments (Annual sales turnover ≤ Bt400mn)Retail Loans: Loans of KBank and KBank’s Subsidiaries in Retail SegmentsOther Loans: Loans in Enterprise Risk Management Division (NPL + Performing Restructured Loans), and other loan types

Moderate loan growth momentum in line with full-year target

Loan Portfolio Loan Portfolio Structure

* December 2014 loan base is not comparable with previous reports, due to customer migration to larger segments and changes to comply with TFRS 8

Consolidated 1H15 1H15 2015Dec 14 1H15 Loan Growth Yield Range Loan Growth Target (%)

(%YTD) (%)

Corporate Loans 456 464 1.8% 4-5% 3-5% SME Loans 572 595 4.0% 7-8% 6-8% Retail Loans 408 413 1.2% 6-7% 5-7% Other Loans 91 95 4.0% Total Loans 1,527 1,567 2.6% 6.1% ~ 6%

Amount (Bt bn)

7% 6% 6% 6%26% 27% 27% 26%

36% 36% 37% 38%

31% 31% 30% 30%

0

400

800

1,200

1,600

2012 2013 2014 1H15

Corporate

SME

Retail

Others

1,3271,527

1,4391,567Bt bn

9

15%2%2%

16%18%

61%

60%

0

10

20

30

40

50

60

2011 2012 2013 2014 1H15

Other Operating Income

Fee and Service Income - net

Net Premium Earned - net

Dividend Income

Share of Profit fromInvestments on Equity Method

Gain on Investment

Gain on Trading and FXtransactions

4%

0.04%2%

12%

2%

20%

61%

0.4%

14%

3%

2%

0.05% 2%

61%

31.92

21%

58%

2%

38% 39% 39% 40%43%

23% 23% 24% 24% 25%

0

10

20

30

40

50

2011 2012 2013 2014 1H15

Non-interest Income Ratio Net Fee Income Ratio

Note:

62% 61% 61% 60%

57%

38%39%

39% 40%

43%

0.00

50.00

100.00

150.00

2011 2012 2013 2014 1H15

Non-interest Income Net Interest Income

(Bt bn)

June 2015 (Consolidated)

Total Operating Income - net

Non-interest Income Net Fee Income

(+13%)(+19%)

Non-interest Income Ratio and Net Fee Income Ratio

90.51104.31

(+20%)(+15%)

- Non-interest Income Ratio = Non-interest Income/Total Operating Income - net - Net Fee Income Ratio = Net Fee Income / Total Operating Income - net- Net Premium Earned - net = Net Premium Earned less Underwriting Expense

(%)

120.32(+15%)

(+18%)

Non-interest income growth continues to be a main driver helping to achieve long-term sustainable profitability, mainly from net fee income and life insurance premiums as a result of customer-centric strategy

1H15 non-interest income accounted for 43% of total net operating income and net fee income accounted for 25%; non-interest income rose 17% YoY mainly from net fee income and insurance business

Net fee income rose 15% YoY mainly from mutual fund business, transaction services, and securities brokerage fees

Composition of Growth: Net Fees and Non-interest Income

- The Bank and its subsidiaries have adopted TFRIC13: Customer Loyalty Programmes since January 1, 2014 onwards and restated the comparative financial statements and financial ratios. There is no effect on net profit of the Bank and its subsidiaries.

34.0240.72

47.52

(+20%)

(+17%)

(+20%)

138.66(+15%)

(+17%)55.52

0.2%

11%

(+18%)33.94

3% 2%2%

74.02

18.58(+15%YoY)

(+10%YoY)

(+17%YoY)

22%

14%

2%1%0.2%

2%

10

5.4 5.97.8

9.4

6.7 7.38.4

11.7

14.2

10.0

0

4

8

12

16

2006 2007 2008 2009 2010 2011 2012 2013 2014 1H15


Asset Quality and Impairment Loss of Loans and Debt Securities (Provision)

(bps)(%)

83 82

93 102

66 64 6685

961306.85

4.44

3.093.76

2.91 2.45 2.16 2.11 2.24 2.39

0

2

4

6

8

10

2006 2007 2008 2009 2010 2011 2012 2013 2014 1H150

50

100

150

200Credit Cost NPL ratio

Asset quality remains manageable

1H15 NPL ratio was at 2.39%, with a coverage ratio of 138.13%

1H15 credit cost was 130bps, prudent and aligned with the macro environment and credit cycle

2015 asset quality expected to remain manageable in lingering economic environment

Note: * NPL ratio in retail business, excluding 180 dpd (days past due) of credit card and consumer loans for peer comparison

(%)

Coverage RatioProvision

NPL Ratio and Credit Cost

(Bt bn)

70.96 73.9088.38

91.64111.02

127.12131.83 134.52

141.38 138.13

0

50

100

150

2006 2007 2008 2009 2010 2011 2012 2013 2014 1H15

NPL Ratio by Business 1H15

Corporate Business <2%

SME Business <3%

Retail Business <2%*

11

2.63 2.47 2.39 2.63 2.56

0

2

4

6

2011 2012 2013 2014 1H15

47.53 45.00 43.44 44.30 42.37

0

10

20

30

40

50

60

70

2011 2012 2013 2014 1H15

Cost to Income Ratio

(%)

Cost to Income Ratio Cost to Average Assets Ratio

(%)


* * *

Cost to income ratio ranging in the mid-40s; seasonally lower in 1H and higher in 2H

1H15 cost to income ratio was 42.37%

Cost to income ratio will be in the mid-40s in 2015

Note: * The Bank and its subsidiaries have adopted TFRIC 13: Customer Loyalty Programmes since January 1, 2014 onwards and restated the comparative financial statements and financial ratios. There is no effect on net profit of the Bank and its subsidiaries.

2011 2012 2013* 2014 1H14 1H15 1Q15 2Q15

Cost to Income Ratio (%) 47.53 45.00 43.44 44.30 42.16 42.37 42.52 42.24

Cost to Average Assets Ratio (%) 2.63 2.47 2.39 2.63 2.45 2.56 2.54 2.56

12

The K-Strategy

Strategic Capabilities

PRODUCT & SOLUTIONInnovate & be responsive

PRODUCT & SOLUTIONInnovate & be responsive

SERVICE QUALITYExcellent customer experience

at all channels

SERVICE QUALITYExcellent customer experience

at all channels

BRANDING & MARKETINGClear & consistent communication

BRANDING & MARKETINGClear & consistent communication

Customer Centricity

Customer Strategy

4 Product Domains8 Customer Segments*

The Way We Work

Long-Term Risk-Adjusted Sustainable Profitability

TO BE CUSTOMER’S MAIN BANK

Innovation & Product Management

Understanding Customer Needs

Sales & Service Excellence

Proactive Risk Management

KASIKORNBANK, its wholly-owned subsidiaries, and its strategic partner

I N T E G R A T I O N

Note: * The definition of the eight customer segments can be found in App. page 19

+

13

6.9 7.5 8.0 9.0 10.0

10.911.7

12.6

13.1

83 85 85 86 86 85 85 86

0

20

40

60

80

100

0

5

10

15

2007 2008 2009 2010 2011 2012 2013 2014 1H15

No. of Customers (mn) Overall Customer Satisfaction

Segment Performance Highlights

Overall Customer Satisfaction

Overall Customer Satisfaction ****

*** Customers in Retail Business Division (RBS) account for 94%, SME Business Division (SME) 6%, and Corporate Business Division (CBS) less than 1% of customer portfolio

**** Overall Customer Satisfaction Index are calculated using the weighted average of each of segments customer satisfaction index; the Customer Satisfaction Index in 2013 and 2014 includes only SME business, and two out of four retail segments (Middle Income and Mass)

No. of Customers (mn) ***

Performance improvement driven by the success of our customer-centric strategy and new IT capabilities No. of customers grew 90% since 2007

Overall Customer Satisfaction was at 86 in Y2014

No. of customers as of June 2015 rose to 13.1mn from 12.6mn in Y2014, which grew 3.7% YTD

2.89 2.89

1.69

2.80

2.15

2.632.78 2.81

2.71

1

2

3

2007 2008 2009 2010 2011 2011(New)

2012(New)

2013(New)

2014(New)

30%

20%

24%27%

26%26%25%24%

17%23%

29%

24%

27% 27%28% 29%

18%

14%

12%11%10%

5%

10%

15%

20%

25%

30%

2008 2009 2010 2011 2012 2013 2014

Average Product Holdings per CustomerMain Bank Status*

** In 2012, the Average Product Holding calculation is adjusted in all eight customer segments to align with our better understanding of customer behavior; 2011 numbers were restated for comparison purposes

Old Definition New Definition**

(Overall)

(By Business Division)

Corporate Business

SME Business

Retail Business

Main Bank Status and Market Penetration increased on track with our customer segment aspirations

* Main Bank Status = % of customers in the market who use KBank and its wholly-owned subsidiaries as their main operating bank and/or main saving and investing bank and/or main borrowing bank; the Main Bank Status of Retail Business in 2013 and 2014 includes two out of four retail customer segments (Middle Income and Mass), which account 99% of retail customers

Average product holdings per customer increasing as a result of enhanced cross-selling capabilities

Overall average rose to 2.89 in 2014, from 2.71 in 2011

2.172.66 2.82 2.862.67

3.12 3.11 3.30 3.54

4.67 4.69

2.882.872.722.78

1.71

3.023.123.05

2.562.142.122.101.831.44

4.41 4.59

0

5

10

2007 2008 2009 2010 2011 2011(New)

2012(New)

2013(New)

2014(New)

Retail Business SME Business Corporate Business

14

9.6310.43 12.02 12.88 13.10

4.185.55 3.23

3.73

0

3

6

9

12

15

18

2011 2012 2013 2014 1H15Tier1 Tier2

(%)

13.81

15.9815.25

3.88

Bank only KASIKORNBANK FINANCIAL CONGLOMERATE*

Capital (Reported Number: Excluding Net Profit of Each Period)

Capital adequacy remains sufficient to support business growth; maintained adequate Tier 1 ratio, as required under the Basel III

June 2015

Under Bank of Thailand regulations, net profit in the first half of the year is to be counted as capital after approval by the Board of Directors as per the Bank’s regulations. Net profit in the second half of the year is also counted as capital after approval of the General Meeting of Shareholders. However, whenever a net loss occurs, the capital must be immediately reduced accordingly.

Note: * KASIKORNBANK FINANCIAL CONGLOMERATE means the company under the Notification of the Bank of Thailand re: Consolidated Supervision, consisted of KBank, K Companies and subsidiaries operating in supporting KBank, Phethai Asset Management Co., Ltd. and other subsidiaries within the permitted scope from the BOT’s to be financial conglomerate.

** The details on Basel III regulations can be found in App. Page 89-90

Basel II Basel III Basel II Basel III

2011 2012 2013 2014 1H15Bank onlyCAR (%), excluding net profit of each period 13.81 15.98 15.25 16.76 16.83Tier 1 (%), excluding net profit of each period 9.63 10.43 12.02 12.88 13.10

KASIKORNBANK FINANCIAL CONGLOMERATE

CAR (%), excluding net profit of each period 13.41 15.64 15.78 17.31 17.39Tier 1 (%), excluding net profit of each period 9.57 10.44 12.57 13.49 13.77

Basel IIIBasel II

16.76

12.5710.449.57

13.49 13.77

3.84

5.20

0

3

6

9

12

15

18

2011 2012 2013 2014 1H15

Tier1 Tier2

(%)

13.41

15.64 15.78

3.21

17.31

3.82

17.3916.83

3.62

15

0.0

1.0

2.0

3.0

4.0

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

(Bt) 4.00

21.36

30.55 31.88 32.33

42.49

32.1427.00

22.12 22.32 22.51

0

10

20

30

40

50

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

(%)

Dividend

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014Dividend Per Share (Bt) 1.25 1.75 2.00 2.00 2.50 2.50 2.50 3.00 3.50 4.00

Dividend Payout Ratio (%) 21.36 30.55 31.88 32.33 42.49 32.14 27.00 22.12 22.32 22.51

Dividend policy: both operating results and long-term returns to shareholders are taken into consideration in determining dividend payments

Dividend payout ratio ranges 20-25%, in order to ensure a sustainable and adequate capital level through the changing economic environment and the ongoing adoption of Basel III

Dividend Payout RatioDividend Per Share

1.25

1.752.00 2.00

2.50

Interim Dividend

2.50 2.503.00

3.50

16

Summary

Customer-centric strategy effectively executed: data-mining, analytic campaign management, and multi-channel sales and services platform have enhanced our capability to quickly acquire new customers; the result is a top-notch total customer experience and strong market position

Balanced growth: loans to grow carefully in line with economic conditions; appropriate liquidity maintained; manageable asset quality supported by strong risk management capabilities; appropriate loan loss reserves; moderate non-interest income growth; manageable cost to income ratio; strong ROE maintained

Adequate capital: maintained adequate Tier 1 ratio, as required under Basel III

17

Appendix

18

KBank: Strategy and Segment Highlights

19

Eight Customer Segments Multi-Corporate Business

Large Corporate Business

Medium Business

Small & Micro Business

High Net Worth Individual

Co

rpo

rate

B

usi

nes

sS

ME

B

usi

nes

sR

etai

l Bu

sin

ess

Ret

ail

Bu

sin

ess

Company with annual sales >Bt5,000mn

Company with annual sales >Bt400mn to Bt5,000mn

Individual or company with annual sales >Bt50mn to Bt400mn

Individual or company with annual sales ≤ Bt50mn, and with commercial credit limit ≤ Bt15mn

Individual wealth with KBank and its wholly-owned subsidiaries* ≥ Bt50mn

Individual wealth with KBank and its wholly-owned subsidiaries*≥ Bt15,000 to < Bt10mn

Individual wealth with KBank and its wholly-owned subsidiaries* < Bt15,000

Note: * Wealth with KBank and its wholly-owned subsidiaries is defined as savings and investments, such as deposit products with KBank, mutual funds with KAsset; or the monthly income of an individual customer

Affluent

Middle Income

Mass

Individual wealth with KBank and its wholly-owned subsidiaries*≥ Bt10mn to < Bt50mn

Customer-centric strategy: offering a full array of financial solutions and a satisfying experience to our customers Synergistic portfolio management by monitoring eight customer segments Offer financial solutions from among KBank, its wholly-owned subsidiaries, and the insurance company Make significant progress towards long-term aspirations; performance on track

20

Revenue by Eight Customer Segments

Note: Loan portion and loan yield of each customer segment includes loans from the Enterprise Risk Management Division (NPL + Performing Restructured Loans); figures are not comparable with loan data in other pages

Non-interest income *Loan

Portion

Average

Loan Yield (%)

* Non-interest income excludes capital market business, treasury business and others


Medium Business

Small & Micro Business

High Net Worth Individual

Affluent

Middle Income

Mass

Multi-Corporate Business

June 2015

0.4%

22.1%

3.9%0.4%

19.5%

22.4%

15.5%

15.8%4.0%

6.1%

7.2%

9.7%

4.3%

8.7%

4.4% 5.4% High Net

Worth6%


12%

Small & Micro

Business 11%

Medium Business

12%


8%

Mass10%

Middle Income

26%

Affluent15%

21

Corporate, SME and Retail Business Direction in 2015 Strategy

To attain Main Bank status for all customer segments with strong brand positioning

To become a leader in digital banking and transaction banking services

To affirm our commitment to service excellence in business operations and to enhance our market position

Provide financial advisory and investment banking services

Secure #1 position in Transaction Banking

Support customers operating business in the AEC in terms of international trade and investment

Corporate Business SME Business Retail Business

To attain #1 Main Bank status in all retail customer segments

Secure the lead position in Digital Banking and Transaction Banking

Maintain differentiation with expertise in financial advisory services

Maintain #1 position in SME business by enhancing the competitiveness of SME customers under “K SME Full Support for SMEs” campaign

Tie in credit and transactional products to further support customers through K-Value chain

Improve Relationship Manager productivity to increase customer face time

22

Performance and Market Position Main Bank Status: maintained #1 ranking in 2014

Trusted Partner Bank: aim to be #1 through comprehensive fund raising solutions, integrated cash management solutions, and value chain solutions

Outright Trading Volume of Corporate Bonds: ranked #1 with 21% market share in 1H15

Corporate Bond Underwriting: ranked #1 with 15% market share in 1H15

Syndicated Loan Arranging: leading position with acclaimed expertise in utility sector

Transaction Services: top player in transactional banking services

Security Services (MFS): 38% market share in 2014

Cash Management Services: 24% market share in 2014

Trade Finance: 30% market share in 2014

Industrial Expertise: leverage capability in utility, real estate, transportation, communication and commerce, etc; also, our executives have been invited to

speak at seminars on green business and urbanization

Knowledge-based Organization: strive to be a knowledge-based organization for family businesses (KFAM Club)

19%21%

23% 23% 24% 24%

0%

10%

20%

30%

2009 2010 2011 2012 2013 2014

23% 24% 25%26% 26%

27%

0%

10%

20%

30%

2009 2010 2011 2012 2013 2014

18%15% 14%

17%

11% 14%15%

0%

10%

20%

30%

2009 2010 2011 2012 2013 2014 1H15

Corporate Business: Performance and Market PositionMulti-Corporate

BusinessLarge Corporate

BusinessMedium Business

Small and Micro Business

High Net WorthIndividual

MiddleIncome

Mass

Corporate Bond Underwriting

Affluent

Source: The Thai Bond Market Association (ThaiBMA)

Main Bank Status

Source: KBank Customer Survey

Cash Management Services

Source: KBank Customer Survey

Note: Main Bank Status = % of customers in the market who use KBank and its wholly-owned subsidiaries as their main operating bank and/or main savings and investing bank and/or main borrowing bank

(#1) (#1) (#1)

(#2) (#2)(#3) (#4)

(#2) (#2) (#2) (#2)(#1)

(#2)

(#2)

(#1) (#1)(#2)

(#2) (#1)

23

27% 27% 28% 29% 29% 30%

0%

10%

20%

30%

2009 2010 2011 2012 2013 2014

27% 29% 30% 30% 30% 30%

0%

10%

20%

30%

2009 2010 2011 2012 2013 2014



Medium Business



MiddleIncome

MassAffluent

SME Business: Performance and Market Position

Performance and Market Position Main Bank Status: Improved main bank status and strengthened #1 position

Market Share: maintained 30% market share and strengthened #1 position

Market Position: strengthened #1 position in SME market – “Bank for SMEs”; targeted to be SME market leader in all areas

Improved capital usage efficiency by increasing total income to loan ratio

Only bank to offer comprehensive solutions to SMEs through K SME program (launched in 2006, with a total of 20 classes and about12,000 participants so far) and K SME Knowledge Center (established in 2009)

#1 in Market Share by Value #1 in Main Bank Status

Source: KBank Customer Survey (updated annually)

(#1)

Source: KBank Customer Survey (updated annually)

(#1) (#1)(#1) (#1)

(#1)(#1) (#1)

Note: - SME Business in Thailand accounts for 37.0% of Thailand’s GDP, or Bt4.2trn; 2.73 million SME customers with 0.66 million registered as legal entities (as of December 2012); supported by the government to become a key factor in economic and social growth (Source: The Office of Small and Medium Enterprises Promotion or OSMEP)

- Market Share by Value = share of revenue (derived from both credit and non-credit products) that each bank gains from the market - Main Bank Status = % of customers in the market who use KBank and its wholly-owned subsidiaries as their main operating bank and/or main savings and investment bank and/or

main borrowing bank

(#1)(#1)

(#1)(#1)

24

22.4%22.9%24.3%25.5%

23.1%

0%

10%

20%

30%

2011 2012 2013 2014 1H15

Performance and Market Position Market Penetration**: strong market penetration to affluent customers Bancassurance: MTL ranked #1 in Bancassurance premiums, with 34.1% market share in new business premium and 27.3% market share in total premium; moreover, MTL

focused on balancing First Year Premium and Single Premium to create a sustainable portfolio Fund Management Service:

Mutual Funds: KAsset maintaining #1 position since 2010, with highest market share at 22.4% in 1H15; received Best Fund House (Thailand) Award and Most Innovative Product (Thailand) Award from Asia Asset Management Magazine

Mutual Funds + Private Funds + Provident Funds: maintaining #1 position for 7 consecutive years; first Asset Management Company with total AUM over Bt1trn (20.6% market share as of May 2015)

Mortgage Loans: ranked in top 3, with 8.1% market share in March 2015; conservative growth and maintaining a good quality portfolio Credit Cards:

Total spending: ranked #1, with 23.5% market share in May 2015 Number of cards: ranked #2, with 17.4% market share in May 2015 Card-accepting merchant services (such as EDC, payment gateway, etc.): ranked #1, with 38.8% market share by sales volume in May 2015

Debit Cards: #1 in total debit card spending; maintaining top position by providing functions and features to match customer lifestyles; launched new Character Card (Doraemon stand

by me), Ducati Card, Co-Branded K-DEBIT 7PURSE, and Thailand Football Club Debit Card

8.1%8.1%9.4%9.6% 8.9%

0%

5%

10%

2011 2012 2013 2014 1Q15

#1 in Mutual Fund (KAsset)



Medium Business



MiddleIncome

Mass

Mortgage Loan

Affluent

(% Market Share) (% Market Share) (% Market Share)

Bancassurance*(New Business, Total and Renewal Premium)

Ranked #1 in Bancassurance premiums Ranked #1 in Mutual Fund AUM

(KAsset)

( #1) (#2) (#3) (#3) (#3) (#3)

Maintaining good quality portfolio with lower NPL than industry

Note: * Total Premium = New Business Premium (NBP) + Renewal Premium; New Business Premium = First Year Premium (FYP) + Single Premium (SP)

Retail Business: Performance and Market Position

** Market penetration = % of customers in the market who use at least one of the products of KBank and its wholly-owned subsidiaries

25.0%23.5%

26.1%27.6%

34.1%

22.1% 22.3%23.7% 25.1%

27.3%

19.5% 21.1%21.6% 22.8% 23.4%

0%

5%

10%

15%

20%

25%

30%

35%

2011 2012 2013 2014 1Q15

NewBusiness

TotalPremium

RenewalPremium

(#1) (#1)(#1) (#1)

25

21 23 2426

34 33 33 32

0

20

40

2009 2010 2011 2012 2013 2014 1Q15 2Q15

87 95114

117145

120 120

0

50

100

150

200

2009 2010 2011 2012 2013 2014 2Q15

12

68

68 8 8 8

0

5

10

15

20

2009 2010 2011 2012 2013 2014 1Q15 2Q15

60 61 6263 63 62 62 62

0

15

30

45

60

75

90

2009 2010 2011 2012 2013 2014 1Q15 2Q15

International Trade Service Center *

Channels: Corporate and SME Business

Corporate Business Center SME Business Center **

Cheque Direct Service

Customer facilitation in areas with good potential via opening financial service centers and cheque points

Reduction in the number of centers was a result of consolidation of some centers* Name changed from Corporate & SME Service Center to International Trade Service Center

** Excluding International Trade Service Centers; there could be more than one SME Business Center per branch

Note:

26

7,471 7,366 7,6038,740

9,853 9,335 9,394

1,014 1,067 1,398 2,195

2,775 2,698 2,696

0

5,000

10,000

15,000

2010 2011 2012 2013 2014 1H15 2015F400

600

800

1,000

1,200

2010 2011 2012 2013 2014 1H15 2015F

Branch

(+11)

Channels: Retail Business

(+23)

Self-Service Channel (ATM + CDM ) 1

(+557)

(-105 2)

(+568)805 816865

965 (+1,934)

4 K-Lobby is an electronic banking service with multiple functions such as K-ATM, K-CDM (Cash Deposit Machines), and K-PUM (Passbook Update Machine). K-Lobby is available to serve customers both outside of branch offices and as stand-alone machines in areas without branches

(+100)

Note:

2 A drop in the number of ATMs reflects a relocation plan

1,124(+159)

(+49)

Key Strategies in Channel Expansion

Branch: Maintain competitive number of branches to create perception of convenience Branches to number 1,120 at the end of 2015, due to conversion of BTS branches to self-service

channel to match customer lifestyles Focus in 2015 to improve branch productivity and e-channel migration

Self-Service Channel: #1 in number of self-service channels in Thailand, with a variety of functions and models serving

a variety of customer needs and behaviors In 2015, self-service channels will be reduced to 12,090 machines by removing outdated and low

transaction machines; this is sufficient to create convenience in transactional services Focus in 2015 to increase efficiency and service availability through self-service channels

Digital Banking: Maintain #1 market share of Thailand Digital Banking users (BOT report, March 2015) #1 Top Mobile Banking Application in Thailand (36%) from Zocial inc. Survey 2014 (Independent

Research House) #1 Digital Banking Top of Mind Brand perception rating (Nielsen, 2014)

THE WISDOM Corner, Center, Lounge, and Lounge@: THE WISDOM Channels strengthen top positioning by appearing in flagship department stores

and iconic locations

(-52)8,485 8,433

9,001

10,935

(+53)

(+516)

(+41)

(+1,137)(+237)

CDM (Deposit)

and CDM (Duo-

Function)

1,120 12,090

(+331)

(+797)

1 Self-Service Channel includes ATMs and all types of CDM machines providing 24 hour cash deposit, withdrawal, or money transfer services throughout the country

ATM

2011 2012 2013 2014 1H15Branch 3 816 865 965 1,124 1,130 - Bangkok and Metro 46% 45% 42% 39% 39% - Upcountry 54% 55% 58% 61% 61%ATM 7,366 7,603 8,740 9,853 9,335 - Bangkok and Metro 52% 51% 48% 44% 44% - Upcountry 48% 49% 52% 56% 56%CDM 1,067 1,398 2,195 2,775 2,698 - CDM (Deposit) 95% 76% 52% 46% 47% - CDM (Duo-Function) 5% 24% 48% 54% 53%K-Lobby 4 103 126 185 238 238

THE WISDOM Corner, Center, Lounge and Lounge@

31 36 75 100 104

(+7, close 11 from 2014)

12,628(+1,693)

(+1,113)

(+580)

(+6)1,130

12,033(-595)

(-77)

(-518)

3 Branch: Excludes 10 THE WISDOM channel models and 2 K-Express Credit Centers which BOT’s adjusted definition now defines as branches, as they are physically located separately from regular branches

27

Branch

Sample of Channels

K-Lobby

An electronic banking service with multiple functions such as K-ATM, K-CDM (Cash Deposit Machines), and K-PUM (Passbook Update Machine). K-Lobby is available to serve customers both outside of branch offices and as stand-alone machines in areas without branches

Thematic Branch

THE WISDOM Corner, Center and Lounge

An exclusive center providing a full range of services and facilities to High Net Worth Individual and Affluent segments

Digital Banking

Digital Banking includes:

• K-Mobile Banking

• K-Cyber Service (K-Cyber Banking, K-Cyber Trade and K-Cyber Invest)

• K-Payment Gateway

• K-PowerP@y (mPOS)

Branch @ Department Stores

The thematic branch is designed to blend with the local architecture and culture of each area

Thematic Branch @ Phuket

THE WISDOM Lounge @ The Emquartier

28

KASIKORNBANK to Capture AEC+3 Opportunities

Note: 1. Size of economy for 2014 from IMF and compiled by KResearch (as of April 15, 2015)2. 2015 GDP forecast is projected by KResearch (as of July 9, 2015) 3. ASEAN economic growth are averaged growth among ASEAN member countries in national currencies4. Greater Bangkok includes Nonthaburi, Samut Prakarn, Nakorn Pathom, Samut Sakhon, and Patumthani

To become AEC+3 Bank to capture AEC opportunities plus China, Japan, and South Korea

ASEAN Economic Community (AEC): ASEAN member countries to become a single market by December 2015; free flow of goods & services and non tariff barrier among 10 member nations

Greater opportunities available through AEC + 3 KBank continues to enhance business in

Host Country Business International Trade Inbound Foreign Direct Investment Outbound Foreign Direct Investment Border Trade Retail Customer (Tourist / Expatriate / Transit)

Higher revenue generation and expansion of customer base “AEC Plus” framework is established to cover ASEAN,

China, Japan, and Korea through our presence and collaborative business networks with partner banks

China model developed to ensure KBank’s presence in China

GDP Thailand ASEAN

Size of Economy (GDP) in USD Trillion for 2014 0.37 2.47

2015 GDP Forecast 2.8% 4.5%

Contribution to GDP (by NESDB) 2012 Y2015F

Greater Bangkok : Provinces 45 : 55 44 : 56

29

Note: - One subsidiary bank: KASIKORNTHAI BANK Limited, a subsidiary company in Lao PDR to operate commercial banking

business- Five international branches: Los Angeles, Cayman Islands, Hong Kong, Shenzhen, and Chengdu- One international sub-branch: Longgang- Nine representative offices: Beijing, Shanghai, Kunming, Tokyo, Yangon, Ho Chi Minh, Hanoi, Phnom Penh and Jakarta- Global partners in 11 countries: Japan, China, South Korea, Germany, Italy, Lao PDR, Vietnam, Cambodia, Indonesia,

Philippines and Malaysia

AEC Plus Framework and China Model

GermanyItaly

Jakarta Rep. Office

JapanSouth Korea

KBank (Lao PDR)

Cambodia

Beijing Rep. Office

Kunming Rep. Office

Shenzhen Branch

Chengdu Branch Shanghai Rep. Office

Hong Kong Branch

Los Angeles International Branch

Yangon Rep. Office

Tokyo Rep. Office

Cayman Islands Branch

China

Longgang Sub-branch

Hanoi Rep. Office

Ho Chi Minh Rep. Office

Business Direction

Establish branches in Phnom Penh, Cambodia; build connectivity and collaborative business networks; enhance employees’ capabilities; aim to become the Main Operating Bank for Japanese investors in Thailand

Establish KASIKORNBANK China (Locally Incorporated Institution, LII)

AEC Plus Framework: Collaborative business networks established with

partner banks overseas Global partners with 70 banks in 11 countries:

51 Japanese partner banks; 2 Korean partner banks; 3 European regional banks (in Germany and Italy); 7 ASEAN partner banks (in Lao PDR, Vietnam, Cambodia, Indonesia, Malaysia and Philippines); and 7 Chinese partner banks (as of June 2015)

Established a subsidiary bank in Lao PDR

China Model: Three branches in China include Shenzhen,

Chengdu, and Hong Kong; one sub-branch in Longgang District, Shenzhen; and three representative offices in China

SME lending and international trade business are key strategic business directions for expansion in China

Phnom Penh Rep. Office

30

KASIKORNBANK to Capture Urban Growth Opportunities

Bangkok

Note: Market Penetration = % of customers in the market who use at least one of the products of KBank and its wholly-owned subsidiaries Market Share by Value = share of revenue (derived from both credit and non-credit products) that each bank gains from the market Main Bank Status = % of customers in the market who use KBank and its wholly-owned subsidiaries as their main operating bank and/or main savings and investing bank and/or main borrowing bank

* In 2014, 25 provinces were selected as strategic provinces

Strategic Provinces expansion* started to capture urban growth opportunities and to prepare for the upcoming AEC

Different industries, customer segments, and behaviors in each strategic province in Thailand identified to capture various business opportunities with different approaches

Key areas include: Tourist Hub, Logistic Hub, Education Centre, Industrial Estate, and AEC Linkage

Aspiration to become No.1 in customers’ mind in each strategic province

Higher revenue generation from both net interest income and non-interest income expected, with a gradually increasing proportion of loans and revenue generation from the upcountry

Wider customer base in all customer segments expected, along with higher Market Penetration (especially retail customers), higher Market Share by Value, and higher Main Bank Status

As of 1H15, the proportion of KBank’s outstanding loans in Bangkok and its metropolitan area is around 62% vs. around 38% in the upcountry

31

K-Transformation Project: Completed

Implemented

K-Transformation Foundation Capabilities

Information Technology

Capital (ITC)

Financial Information

System (FIS)

Know Our Customers

(KOC)

Multi-channel

Sales andServices

(MSS)

K-Transformation Supporting Solution (KSS)

Innovation & Product Management

Understanding Customer Needs

Sales & Service Excellence

Strategic Capabilities

Proactive Risk Management

Support K-Strategy (Customer Centricity); opens possibilities to capture new business opportunities

32

- In 2012, Average Product Holding calculation was adjusted in all eight customer segments to align with customer behavior; 2011 numbers were revised for comparison purposes

- Since January 1, 2011, financial statements have been reclassified per the Bank of Thailand’s requirements; the 2009 and 2010 financial statements were restated and adjusted for comparison purposes

New IT Business Capabilities Highlights

- The Bank and its subsidiaries have adopted TFRIC 13: Customer Loyalty Programmes since January 1, 2014 onwards

2007 2008 2009 2010 2011 2012

1.69 2.152.71

51.54

2.782.63

47.5350.5750.9253.95

39.0435.23 39.5034.7433.55

Average Product Holdings

Non-interest Income Ratio (%)

Cost to Income Ratio (%)

14.35 12.7915.7315.94 16.72ROE

(%)

2.80

37.58

45.00

20.76

Y2007-2008: Old Financial Presentation

37.79

43.44

20.45

2013 2014

2.89

Y2009 onwards: New Financial Presentation

40.04

44.30

19.38

1H15

43.13

42.37

18.03

2.89

K-Transformation Project MilestoneY2008 Y2011 Y2012 (1Q12) Y2014 (1Q14) Y2015 (Jul15)

Note:

KOC & FIS completedKOC key business

capabilities: customer analytics; data mining; campaign managementFIS key business

capabilities: new chart of accounts; enhanced financial controls; enhanced budgeting capabilities; enhanced procurement capabilities

New branch infrastructure platform rollout under MSS completedMSS Key business

capabilities: increased effectiveness of campaign execution from MSS and KOC integration through new branch platform

MSS; branch roll-out completed nationwideMSS key business

capabilities: enhanced sales & service capabilities; single view of customer; multi-channel integration; legacy risk mitigation

ITC: deployed new loan core banking systemITC key business

capabilities: enhanced new product development capability; shortened product development time; reduced maintenance cost in long term

ITC: deployed new deposit core banking systemITC key business

capabilities: enhanced product innovation capability; shortened product development time

Continued a determination to become the

leader in Transaction Banking and

Digital Financial Services

K-Transformation completed

33

KBank: Risk and Credit Management

34

KBank Risk Management Structure The Bank’s organization is structured to facilitate all aspects of risk management; each business unit’s

responsibilities and segregation of duties are clearly identified in accordance with good internal-control practices

Board of Directors

Audit Committee

Risk Management CommitteeSub-committee

Credit Policy and Risk Management Sub-committeeCredit Process Management Sub-committee

Market Risk Management Sub-committeeAsset and Liabilities Management Sub-committee

Operational Risk Management Sub-committeeCapital Management Sub-committee

Business Continuity Management Sub-committeeIT Strategy Sub-committee

Business FunctionsCBS/ RBS/ SME CMB/ CSP/ WBS

Risk FunctionsERM

Approve risk appetite and all risk management policies and guidelines

Ensure the adequacy and effectiveness of risk management system and internal controls

Approve risk limits according to the risk appetite approved by the Bank’s Board of Directors

Oversee and monitor risk management policies and overall risk profile under the policies and guidelines approved by the Bank’s Board of Directors

Credit Policy and Risk Management Sub-committee and Corporate Governance Committee oversee project financing requests that could have significant adverse environmental and social impacts

Risk functions are responsible for risk management policies, methodologies, and processes in order to effectively measure, monitor, and control all related risks

Business functions are accountable for managing all risks inherent in their day-to-day activities

CBS = Corporate Business Division, RBS = Retail Business Division, SME = SME Business Division, CMB = Capital Market Business Division, CSP = Corporate and SME Products Division, WBS = World Business Division, ERM = Enterprise Risk Management Division

35

KBank Credit Risk Management Process

Efficient collection and follow-up of customers with late payments

Restructure viable customers to prevent NPLs

Foreclose pledged assets to recover loan loss

Enhance decision making/support tools for more efficient return and risk evaluation

Setup specific prescreening criteria for potential industries

Enhance customer income validation process

Monitoring Collection & RecoveryCollection & RecoveryOrigination

Portfolio Management

Determine portfolio-by-design i.e., portfolio target setting by key credit concentration dimensions (Country, Industry, Large Customer Group) and other sub portfolio dimensions based on value-based analysis

Manage portfolio according to the Bank’s risk appetite and concentration

Perform stress testing to identify portfolio weaknesses and proactively prepare appropriate management actions

The Bank continues to enhance credit risk management processes to promote risk strategies with justified risk-return tradeoff within the rapidly changing economic environment

Monitor customer behavior and detect early warning signs

Leverage National Credit Bureau information for effective credit monitoring

Ensure credit condition compliance (e.g. insurance, capital injection, project progress)

Take prompt action to prevent credit deterioration

36

• Automated collection system• Efficiently utilize available behavior scoring and collection tools i.e. SMS, automated letter

generation, phone

Unsecured Credit and Merchant Product Service

Fulfillment Dept.

Policy Lending

• Sufficiency of cash flow• Growth trends and ability to compete• Management experience and depth• Leverage, Liquidity, and Asset Quality• Credit Risk Mitigation• Facilities Structure

Formula Lending

Corporate SME (Medium) Retails (Housing and Unsecured Loans)

Po

st A

pp

rova

l

• Legal document• Limit set up

Credit Service Fulfillment Dept.

Bank-wide Risk Asset Review

• Customer Review by Relationship Manager (RM)• Credit Portfolio Monitoring Unit to facilitate RM in

customer monitoring• Credit Clinic

Asset Quality Management Operation Dept.

Ap

pro

val P

roce

ss

• Legal document• Limit set up

• Application Score• FICO Score• Bureau information/Credit history• Debt service capacity• LTV

KBank Credit Approval Process

Note: FICO = Fair Isaac Corporation

Formula Lending

• Application Score• FICO Score• Bureau information/Credit history• Debt service capacity • LTV (only housing loan/secured consumer)

SME Credit and Housing Loan Approval Dept.Credit Underwriting Dept.

Unsecured Credit and Merchant Product

Service Fulfillment Dept.

SME (Small & Micro)

37

Credit Bureau Summary

Two Types of Credit Reports Offered by NCB:

Consumer credit report for individuals

Commercial credit report for businesses

Credit report (monthly reported by members)

Customer information (Name, address, identification number, birth date, occupation, etc.)

Credit information (History of application, approval history, loan payment history, etc.)

Data Record of Credit Report

Individuals: Credit report remains on file for 3 years

Businesses: Credit report remains on file for 3 years

Members: Financial institutions including commercial banks, specialized financial institutions (SFIs), non-bank financial institutions, finance companies, securities companies, insurance companies, etc.

KBank PracticeNational Credit Bureau (NCB)*

Note: * The concept of a credit bureau started in 1961 and central credit registration started in 1964. The Central Information Service was established in 1999 and its name was changed to Central Credit Information Service in 2000 and to the National Credit Bureau in 2005

KBank’s customers applying for loans

Corporate Business



Required to

4 Customer Segments in Retail (HN, AF, MI and MA)

Retail Business

Reject application

Sign agreement to allow the Bank to get credit report from NCB

Good credit

Small & Micro

Business

Medium Business

SME Business

Reject application

Required to (Large companies normally have reliable financial statements)

Optional to

Poor credit Good credit Poor credit

KBank’s Policy

Lending

KBank’s Credit

Scoring

38

KBank: Financial Performance

39

1H15 Performance HighlightsConsolidated 2013 2014 1Q15 2Q15 1H15

Net Profit (Bt bn) 41.33 46.15 12.401 11.479 23.880Profitability

- NIM 3.55% 3.80% 3.67% 3.59% 3.66%

- ROE 20.45% 19.38% 18.84% 16.94% 18.03%

- ROA 1.89% 1.97% 2.04% 1.84% 1.95%

- YTD Loan growth 8.46% 6.12% 1.39% 2.59% 2.59%

- YoY Loan growth 8.46% 6.12% 6.75% 6.44% 6.44%

- YoY Net fee income growth 17.75% 17.82% 14.63% 14.96% 14.80%

- YoY Non-interest income growth 16.69% 16.84% 11.82% 22.51% 17.15%

Cost control

- Cost to income 43.44% 44.30% 42.52% 42.24% 42.37%

Asset quality

- NPL ratio 2.11% 2.24% 2.26% 2.39% 2.39%

- Coverage ratio 134.52% 141.38% 139.74% 138.13% 138.13%

Loans to Deposits 94.06% 93.70% 93.64% 93.86% 93.86%

Tier 1 Ratio 12.57% 13.49% 13.20% 13.77% 13.77%

CAR 15.78% 17.31% 17.01% 17.39% 17.39%


Note: - Under Bank of Thailand regulations, net profit in the first half of the year is counted as capital after approval by the Board of Directors as per Bank regulations. Net profit in the second half of the year is counted as capital after approval of the GeneralMeeting of Shareholders. However, when a net loss occurs, the capital must be reduced immediately.

- Capital Adequacy Ratio (CAR) has been reported in accordance with Basel III Capital Requirement from January 1, 2013 onwards.CAR is based on KASIKORNBANK FINANCIAL CONGLOMERATE. KASIKORNBANK FINANCIAL CONGLOMERATE means the company under the Notification of the Bank of Thailand re: Consolidated Supervision, consisting of KBank, K Companies and subsidiaries operating in supporting KBank, Phethai Asset Management Co., Ltd. and other subsidiaries within the permitted scope of the BOT’s definition to be a financial conglomerate

1H15 net profit rose 0.89% YoY, driven by both net interest income and non-interest income

Loans grew 2.59% YTD and 6.44% YoY; from all businesses

NIM was 3.66% in 1H15

Net fee income continued to grow due to customer-centric strategy; growth entails strengthening acquisition, retention, and cross-selling capabilities

1H15 cost to income ratio was at 42.37%; cost to income ratio in 2015 will range in the mid-40s

NPL increased but remained manageable; high coverage ratio maintained

Strong capital base maintained

40

Consolidated Financial Statements

- KBank acquired additional ordinary shares in MTGH, to hold a 51% stake valued at Bt7,529mn; the MTGH Acquisition was completed on November 30, 2009. As the MTGH acquisition was completed on November 30, 2009, the Bank’s consolidated financial statements from 2010 include the performance of companies in the MTGH Group for the whole year.

2013 2014 2Q14 3Q14 4Q14 1Q15 2Q15 1H 15

Interest income 106,226 113,578 27,880 28,471 29,450 28,531 28,680 57,210Interest expenses 33,428 30,446 7,300 7,177 7,686 7,556 7,561 15,116Interest inco me - net 72,797 83,132 20,580 21,294 21,765 20,975 21,119 42,094Fee and service income 36,613 42,690 10,433 11,237 11,043 11,273 11,587 22,859Fee and service expenses 7,803 8,746 2,127 2,116 2,405 2,240 2,039 4,279F ee and service inco me - net 28,810 33,944 8,305 9,121 8,638 9,033 9,548 18,581T o tal o perat ing inco me 169,002 199,975 50,093 50,170 50,346 56,111 55,725 111,836Underwriting expenses 48,685 61,319 15,933 14,546 14,638 19,852 17,969 37,821T o tal o perat ing inco me - net 120,317 138,656 34,160 35,624 35,709 36,259 37,756 74,015T o tal o ther o perat ing expenses 52,270 61,419 15,137 14,954 18,080 15,417 15,947 31,364Impairment loss of loans and debt securities 11,743 14,243 3,036 3,661 3,886 4,007 6,037 10,044Operating profit before income tax expenses 56,303 62,994 15,987 17,009 13,742 16,836 15,772 32,608Income tax expenses 11,457 12,692 3,265 3,368 2,822 3,321 2,924 6,245Net profit attributable: Equity ho lders o f the B ank 41,325 46,153 11,732 12,516 9,967 12,401 11,479 23,880 Non-contro lling interest 3,522 4,148 991 1,124 954 1,114 1,370 2,483

Statements o f F inancial P o sit io n (B t mn)

2013 2014 2Q14 3Q14 4Q14 1Q15 2Q15 1H 15

Loans to customers (less deferred revenue) 1,438,978 1,527,080 1,471,922 1,501,203 1,527,080 1,548,238 1,566,691 1,566,691Total Assets 2,290,045 2,389,137 2,339,798 2,415,588 2,389,137 2,474,871 2,511,723 2,511,723Deposits 1,529,835 1,629,831 1,567,499 1,621,056 1,629,831 1,653,391 1,669,174 1,669,174Total Liabilities 2,053,038 2,108,451 2,080,975 2,143,653 2,108,451 2,180,645 2,213,568 2,213,568Total Equity attributable to equity ho lders of the Bank 219,232 257,059 237,383 248,814 257,059 269,437 272,745 272,745

Notes:

- In accordance with the corporate income tax rate reduction from 30% of taxable profit to 23% in 2012 and 20% in 2013, KBank recognized a one-time Bt1.9bn impact to the 4Q11 income statement due to deferred tax item adjustments; there was no effect on the business undertakings, profitability, or capital fund of the Bank and its subsidiaries


41

Earnings Before Provision and Tax (EBPT) and Net Profit

47.49

57.37

68.05

77.24

42.65

0

10

20

30

40

50

60

70

80

2011 2012 2013 2014 1H15

(Bt bn)


EBPT Net Profit

2011* 2012 2013 2014 1H14 1H15 1Q15 2Q15

EBPT (Bt bn) 47.49 57.37 68.05 77.24 38.94 42.65 20.84 21.81

EBPT Growth (% YoY) 27.86% 20.81% 18.61% 13.50% 12.06% 9.54% 4.66% 14.64%

Net Profit (Bt bn) 24.23 35.26 41.33 46.15 23.67 23.88 12.40 11.48

Net Profit Growth (% YoY) 20.85% 45.55% 17.20% 11.68% 12.26% 0.89% 3.87% (2.16%)

* In accordance with the corporate income tax rate reduction from 30% of taxable profit to 23% in 2012 and 20% in 2013, KBank recognized a one-time Bt1.9bn impact to the 4Q11 income statement due to deferred tax item adjustments; there was no effect on the business undertakings, profitability, or capital fund of the Bank and its subsidiaries

Note:

**

EBPT and net profit in 1H15 grew 9.54% and 0.89% YoY, respectively

42

16.7220.76 20.45 19.38 18.03

0

4

8

12

16

20

24

2011* 2012 2013 2014 1H15

(%)

1.481.86 1.89 1.97 1.95

0

0.5

1

1.5

2

2.5

2011* 2012 2013 2014 1H15

(%)

2011* 2012 2013 2014 1H14 1H15 1Q15 2Q15

ROA (%) 1.48 1.86 1.89 1.97 2.05 1.95 2.04 1.84

ROE (%) 16.72 20.76 20.45 19.38 20.74 18.03 18.84 16.94

Note:

ROA and ROE

ROA ROE


* In accordance with the corporate income tax rate reduction from 30% of taxable profit to 23% in 2012 and 20% in 2013, KBank recognized a one-time Bt1.9bn impact to the 4Q11 income statement due to deferred tax items adjustment; there was no effect on the business undertakings, profitability, or capital fund of the Bank and its subsidiaries

43

Net Interest Margin

3.75 3.58 3.55 3.663.80

0

1

2

3

4

5

2011 2012 2013 2014 1H15

(%) (%)

NIM


Note: * Cost of deposits including contributions to the Financial Institutions Development Fund (FIDF) and Deposit Protection Agency (DPA)

Yield on Loans

Yield on Earnings Assets

Cost of Fund

Cost of Deposit*

Yield on Earnings Assets and Cost of Fund

5.55 5.42 5.18 5.19 4.98

5.94 6.24 6.37 6.33 6.14

2.08 2.141.93 1.69 1.64

1.70 1.99 1.89 1.63 1.54

0

2

4

6

8

2011 2012 2013 2014 1H15

2011 2012 2013 2014 1H14 1H15 1Q15 2Q15

NIM (%) 3.75 3.58 3.55 3.80 3.68 3.66 3.67 3.59

Yield on Earnings Assets (%) 5.55 5.42 5.18 5.19 5.11 4.98 4.99 4.88Yield on Loans (%) 5.94 6.24 6.37 6.33 6.30 6.14 6.18 6.09

Cost of Fund (%) 2.08 2.14 1.93 1.69 1.73 1.64 1.64 1.61

Cost of Deposit (%), incl DPA 1.70 1.99 1.89 1.63 1.71 1.54 1.54 1.52

NIM was 3.66% in 1H15, remaining the highest level among large commercial banks High portion of CASA at 68% helped support low cost of fund

44

56.4963.58

72.80

83.13

42.09

0102030405060708090

2011 2012 2013 2014 1H15

Interest Income - net

(Bt bn)

83.6996.17

106.23113.58

57.21

27.20 32.59 33.43 30.45

15.12

0

20

40

60

80

100

120

2011 2012 2013 2014 1H15

Interest Income Interest Expenses

(Bt bn)

Interest Income - net

Interest Income and Interest Expenses Interest Income - net


Note: KBank acquired additional ordinary shares in MTGH, to hold a 51% stake valued at Bt7,529mn; the MTGH Acquisition was completed on November 30, 2009. As the MTGH acquisition was completed on November 30, 2009, the Bank’s consolidated financial statements from 2010 include the performance of companies in the MTGH Group for the whole year.

1H15 net interest income grew 5.04% YoY

2011 2012 2013 2014 1H14 1H15 1Q15 2Q15

Interest Income (Bt bn) 83.69 96.17 106.23 113.58 55.66 57.21 28.53 28.68

Interest Expenses (Bt bn) 27.20 32.59 33.43 30.45 15.58 15.12 7.56 7.56

Interest Income - net (Bt bn) 56.49 63.58 72.80 83.13 40.07 42.09 20.98 21.12

Interest Income - net (% Growth YoY) 20.85% 12.55% 14.50% 14.20% 14.05% 5.04% 7.59% 2.62%

45

2.08 2.14 2.18 2.37 2.61

0

1

2

3

4

2011 2012 2013 2014 1H15

(%)

16%18%

0

10

20

30

40

50

60

2011 2012 2013 2014 1H15

Other Operating Income

Fee and Service Income - net


Dividend Income

Share of Profit from Investmentson Equity Method

Gain on Investment

Gain on Trading and FXtransactions

20%

38 39 39 40 43

0102030405060

2011 2012 2013 2014 1H15

(%)

Non-interest Income and StructureNon-interest Income to Average Assets

Non-interest Income Ratio

Non-interest Income Structure

2011 2012 2013 2014 1H14 1H15 1Q15 2Q15Non-interest Income (Bt bn) 34.02 40.72 47.52 55.52 27.25 31.92 15.28 16.64

Non-interest Income Growth (%YoY) 19.78 19.72 16.69 16.84 12.94 17.15 11.82 22.51

Non-interest Income Ratio (%) 37.58 39.04 39.50 40.04 40.47 43.13 42.15 44.06


Note: - Non-interest Income Ratio = Non-interest Income/Total Operating Income - net - Net Premium Earned - net = Net Premium Earned less Underwriting Expense- The Bank and its subsidiaries have adopted TFRIC 13: Customer Loyalty Programmes since January 1, 2014 onwards

34.02

40.72

47.52

(+20%)

(+17%)

(+20%)

55.52(+17%)

2%

21%

2%

3%

4%

61%

60%

61%

61%

2%

2%

2%2%

2% 2%

2%3%0.2%0.04% 0.05%

12%

0.4%

14%11%

15%14%

1%2%

2%

0.2%

22%

58%

31.92(+17%YoY)

Non-interest income continued to grow, mainly from net fee income and insurance business

46

23% 23% 24% 24% 25%

0

10

20

30

2011 2012 2013 2014 1H15

(%)

20.6424.47

28.8133.94

18.58

0

10

20

30

40

2011 2012 2013 2014 1H15

(Bt bn)

Net Fee IncomeJune 2015 (Consolidated)

Net Fee Income to Net Total Operating IncomeNet Fee Income

2011 2012 2013 2014 1H14 1H15 1Q15 2Q15Fee Income (Bt bn) 26.07 31.43 36.61 42.69 20.41 22.86 11.27 11.59Fee Income-net (Bt bn) 20.64 24.47 28.81 33.94 16.19 18.58 9.03 9.55

Fee Income Growth (%YoY) 14.25 20.55 16.50 16.60 11.73 12.00 12.98 11.06Net Fee Income Growth (%YoY) 13.22 18.56 17.75 17.82 11.62 14.80 14.63 14.96

Net Fee Income to Net Operating Income (%) 22.80 23.46 23.95 24.48 24.04 25.10 24.91 25.29Note: - On the consolidated basis, Bancassurance fees are not included in net fee income since 30 November 2009, due to the elimination of inter-company transactions (the accounting treatment from the Muang Thai Group

Holding consolidation)- The Bank and its subsidiaries have adopted TFRIC 13: Customer Loyalty Programmes since January 1, 2014 onwards and restated the comparative financial statements and financial ratios. There is no effect on net

profit of the Bank and its subsidiaries.

1H15 net fee income grew 14.80% YoY, mainly from mutual fund business, transaction services, and securities brokerage fee

Net fee income growth will continue to be helped by the cross-selling capabilities of our customer-centric strategy Net fee income to net total operating income was 25.10% in 1H15

47

Others14%

Bancassurance18%

Trade Finance5%

Cash Management4%

Commercial Credit20%

Transaction Services

24%

Credit Card Business

15%

Credit Card Business

Transaction Services

Commercial Credit

Cash Management

Trade Finance

Bancassurance

Others

Net Fee Income Structure (Bank only)

Net Fee Income by Product

Loan Related and Non-loan Related Fees - net

(mainly from credit card merchant fees)

(such as ATM & debit cards, bill payments, money transfers, etc.)

(such as mutual funds, securities services, capital market business, etc.)

(mainly from commercial credit related fees)

(such as fees from payroll accounts)

(fee income obtained from selling Bancassurance products)

Note: - On the consolidated basis, Bancassurance fees are not included, due to the

elimination of inter-company transactions (the accounting treatment from the Muang Thai Group Holding consolidation)

- On the consolidated basis, Net Premium Earned - net (Net Premium Earned Less Underwriting Expenses) from Muang Thai Life Assurance (MTL) is reported as a part of non-Interest Income; KBank has a 38.25% economic interest in MTL

June 2015

Loan-related

21%Non-loan

related79%

48

37.12

47.52

58.41

73.09

44.78

31.7140.19

48.69

61.32

37.82

0

20

40

60

80

2011 2012 2013 2014 1H15

Net Premium Earned Underwriting Expenses

(Bt bn)

5.417.33

9.7311.77

6.96

0

5

10

15

20

2011 2012 2013 2014 1H15


(Bt bn)


Net Premium Earned and Underwriting Expenses Net Premium Earned – net


Note: KBank acquired additional ordinary shares in MTGH, to hold a 51% stake valued at Bt7,529mn; the MTGH Acquisition was completed on November 30, 2009. As the MTGH acquisition was completed on November 30, 2009, the Bank’s consolidated financial statements from 2010 include the performance of companies in the MTGH Group for the whole year.

2011 2012 2013 2014 1H14 1H15 1Q15 2Q15

Net Premium Earned (Bt bn) 37.12 47.52 58.41 73.09 38.18 44.78 22.82 21.96

Underwriting Expenses (Bt bn) 31.71 40.19 48.69 61.32 32.14 37.82 19.85 17.97

Net Premium Earned - net (Bt bn) 5.41 7.33 9.73 11.77 6.05 6.96 2.97 3.99

Net Premium Earned - net (% Growth YoY) 39.84 35.41 32.79 20.96 19.11 15.14 (1.63) 31.87

Net Premium Earned - net = Net Premium Earned less Underwriting Expense

49

Other Operating Expenses

Other Operating Expenses Structure


46%46%

46%

22%21%

7%8%0.2%0.2%

25%25%

3%

0

10

20

30

40

50

60

70

2011 2012 2013 2014 1H15

Impairment on ApplicationSoftware & Related Expenses

Others

Directors' remuneration

Taxes & Duties

Premises & Equipment

Employee's expenses

44%

20%

8%

24%

27%

7%

20%

0.2%

46%

7%

21%

0.3%

26%

43.0246.93

(Bt bn)

52.27

2011 2012 2013 2014 1H14 1H15 1Q15 2Q15Other Operating Expenses (Bt bn) 43.02 46.93 52.27 61.42 28.38 31.36 15.42 15.95

% Growth (YoY) 13.20 9.10 11.37 17.50 15.78 10.50 16.38 5.35

Note: The Bank and its subsidiaries have adopted TFRIC 13: Customer Loyalty Programmes since January 1, 2014 onwards

61.42

31.360.2%

1H15 other operating expenses rose 10.50% YoY mainly from employee’s expenses

50

12.439.57 8.46

6.12 6.44

0

5

10

15

20

2011 2012 2013 2014 1H15

(%)

Loan Growth June 2015 (Consolidated)

Loan Growth (% YoY)

2011 2012 2013 2014 1H14 1H15 1Q15 2Q15Loans (Bt bn) 1,211 1,327 1,439 1,527 1,472 1,567 1,548 1,567

Loan Growth (% YoY) 12.43 9.57 8.46 6.12 5.88 6.44 6.75 6.44

Loan Growth (% YTD) 12.43 9.57 8.46 6.12 2.29 2.59 1.39 2.59

Loans grew sensibly at 2.59% YTD and 6.44% YoY, from all businesses

51

Loan Structure and Loan Growth TargetsJune 2015 (Consolidated, TFRS 8: Operating Segments*)

Loan Portfolio Structure Loan Structure, Loan Yield and Loan Growth Targets

** December 2014 loan base is not comparable with previous reports, due to customer migration to larger segments and changes to comply with TFRS 8

Loan Definition (TFRS 8: Operating Segments)Corporate Loans: Loans of KBank and KBank’s Subsidiaries in Corporate Segments (Annual sales turnover > Bt400mn)SME Loans: Loans of KBank and KBank’s Subsidiaries in SME Segments (Annual sales turnover ≤ Bt400mn)Retail Loans: Loans of KBank and KBank’s Subsidiaries in Retail SegmentsOther Loans: Loans in Enterprise Risk Management Division (NPL + Performing Restructured Loans), and other loan types

Note: * Since 1Q13, as per the Bank of Thailand’s requirement, the Bank has complied with TFRS 8 (Operating Segments) to present operating results for each key segment in financial reportsY2015 Previous Loan Growth Target (%): Corporate 4-6%, SME 8-10%, Retail 6-9%, Total Loans 8-9% Y2014 Loan Growth Target (%): Corporate 5-7%, SME 6-8%, Retail 6-9%, Total Loans: Less than 8%

(Amount in Bt bn) Dec14** Y2014 1H15 YTD 1H15 Y2015Loan Loan Yield Loan Growth

Growth Growth Range Target (%)

(%) (%) (%)1) Corporate 456 2.2 464 1.8 4-5% 3-5%

Multi-Corporate Business 223 0.6 239 7.0Large Corporate Business 233 3.8 225 (7.6)

2) SME 572 10.3 595 4.0 7-8% 6-8%Medium Business 299 10.6 314 5.1Small and Micro Business 270 9.7 276 2.4

3) Retail 408 6.7 413 1.2 6-7% 5-7%4) Others 91 (0.7) 95 4.0Total Loans 1,527 6.1 1,567 2.6 6.1% ~ 6%

7% 6% 6% 6%26% 27% 27% 26%

36% 36% 37% 38%

31% 31% 30% 30%

0

400

800

1,200

1,600

2012 2013 2014 1H15

Corporate

SME

Retail

Others

1,3271,527

1,4391,567Bt bn

52

Loan by Retail Products (All Segments) June 2015 (Consolidated, TFRS 8: Operating Segments*)

Loan Definition (TFRS 8: Operating Segments)Housing Loans: KBank’s housing loans to retail customer segmentsCredit Cards: KBank’s credit card loans to all eight customer segmentsConsumer Loans: KBank’s consumer loans to retail customer segmentsKLeasing: KLeasing’s loans to all eight customer segments

Note: * Since 1Q13, as per the Bank of Thailand’s requirement, the Bank has complied with TFRS 8 (Operating Segments) to present operating results for each key segment in financial reports

Loan by Retail Products

** December 2014 loan base is not comparable with previous reports, due to customer migration to larger segments and changes to comply with TFRS 8

(Amount in Bt bn) Dec 14** Y2014 Jun 15 YTD % Portion

Loan Loan to

Growth Growth Total Loan(%) (%)

Housing Loans 225 4.7 231 3.0 14.8Credit Cards 76 15.8 73 (3.8) 4.7Consumer Loans 50 13.8 53 6.4 3.4KLeasing 90 0.7 89 (1.0) 5.7

53

6 months and over14.0% Immediate Repricing

61.5%

< 6 months11.8%

Other12.7%

Loan Portfolio Breakdown by Industry, Currencies, and Interest Rate

Loan Portfolio by Industry (March 2015)*

Definition of Loans1) by industry = Gross loans = Loans to customers less deferred revenue2) by currency = Loans to customers and AIR - net3) by maturity of interest repricing = Loans to customers less deferred revenue

By Maturity of Interest Repricing (December 2014)*

By Currencies (December 2014)*

Note:

Thai Baht92.1%

US Dollar7.0%

Other Currencies0.8%

(Bt bn)

54.3% 51.2% 48.9% 48.9% 48.1% 48.3%

5.7%6.2% 6.5%

6.7% 6.9% 7.1%10.7%

12.4%13.0%

13.0% 12.5% 12.4%15.5%

16.0%16.0%

15.5% 14.8%14.8%

11.4%

11.6%13.1%

13.6%15.7% 15.5%

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2010 2011 2012 2013 2014 1Q15

Others

Housing Loans

Utilities & Services

Real Estate & Construction

Manufacturing & Commerce

Agricultural and Mining

2.0%

1548152714391327

1211

1077

2.0%2.3%2.4%2.5%2.5%


* The data as of June 2015 is not available until the release of the audited financial statements The information on loans breakdown by currencies and maturity of interest repricing are disclosed on half year basis

54

Asset QualityJune 2015 (Consolidated)

NPL Ratio(%)

Coverage Ratio(%)

2011 2012 2013 2014 1H14 1H15 1Q15 2Q15

NPL Ratio (%) 2.45 2.16 2.11 2.24 2.14 2.39 2.26 2.39

Coverage Ratio (%) 127.12 131.83 134.52 141.38 140.83 138.13 139.74 138.13

NPL ratio was 2.39% in 1H15 Coverage ratio was 138.13%; this ratio has been maintained above 100% since 2Q10 2015 asset quality expected to remain manageable in lingering economic environment

55

Impairment Loss of Loans and Debt Securities (Provision) and Credit CostJune 2015 (Consolidated)

Impairment Loss of Loans and Debt Securities Credit Cost

2011 2012 2013 2014 1H14 1H15 1Q15 2Q15Impairment Loss of Loans and Debt Securities (Bt bn) 7.35 8.39 11.74 14.24 6.70 10.04 4.01 6.04

Credit Cost (bps) 64 66 85 96 92 130 104 155

(Bt bn) (bps)

1H15 credit cost increased to 130bps, to be prudent and aligned with macro environment and credit cycle 2015 credit cost will be up to 150 bps

56

38% 27% 22% 24% 22% 26% 22% 17% 17% 24%

62%73%

78%76% 78% 74% 78% 83% 83% 76%

0

20

40

60

80

100

2006 2007 2008 2009 2010 2011 2012 2013 2014 1H15% of Performing Restructured loans to Restructured loans

% of Non-Performing Restructured loans to Restructured loans

18.717.3

16.1 16.7 15.915.1

12.5 13.4 13.5

0

5

10

15

20

2006 2007 2008 2009 2010 2011 2012 2013 2014 1H15

(Bt bn)

12.1

Bad Assets Resolution

(Bt bn)


Outstanding Foreclosed Properties

Note: * On September 11, 2013, the Bank was formally notified of its final loss sharing portion under the asset transfer agreement with TAMC established in October 2001. This amounted to Bt206mn. An amount of Bt1,159mn relating to the provision for losses recordedin prior years has been reversed through profit or loss in 2013.

(Bt bn)

2001-2004: KBank sold NPLs totaling Bt14.6bn to TAMC*

2007: KBank and Phethai AMC sold NPLs totaling Bt11.4bn to Standard Bank Asia Limited and Morgan Stanley Emerging Markets Inc. at Bt7.6bn and Bt3.8bn, respectively

2008-1H15: NPLs continued to decline without bulk NPL sales

Write-offs NPL Portfolio Sales Sales of Foreclosed Properties

Restructured Loans

(Bt bn)

52.3367.01

77.19 74.50

% of Restructured loans to Total loans

Outstanding Restructured Loans was Bt90.30 in 1H15; 76% were performing restructured loans Definition: Outstanding Restructured Loans is the accumulated outstanding amount of restructured loans,

comprised of performing restructured loans and non-performing restructured loans. Non-performing restructured loans are already counted as part of Non-Performing Loans (NPLs)

Restructured loans

61.51

76.7082.38

9.1%6.9% 7.4%

8.2%6.9% 6.3% 6.2% 5.9% 6.1% 5.7%

0%

4%

8%

12%

16%

2006 2007 2008 2009 2010 2011 2012 2013 2014 1H15

85.8393.52

1.52.8

4.1

7.2

6.0

4.85.05.65.45.0

0

2

4

6

8

10

2006 2007 2008 2009 2010 2011 2012 2013 2014 1H15

90.30

0.0

5.0

10.0

15.0

Write-of f 11.6 8.7 4.3 5.5 4.3 3.9 5.0 10.3 7.3 3.3

2006 2007 2008 2009 2010 2011 2012 2013 2014 1H15

57

Proactive risk management to counter economic slowdown and high household debt

SME Business

Selective on quality customers

Proactive risk management by visiting customers; raise productivity of sales teams and relationship manager

Efficient collection process

Offer financial aid package for SMEs who need urgent financial aid to temporarily alleviate customer burden

Offer 6-month grace period for principal payment

Cut overdraft (OD) rate for 3 months

Retail Business

Shift towards customers that are less sensitive to high household debt (high income customers)

Proactive and efficient collection process

Analyze behavior regularly to identify weak spots

Slow growth with focus on high-income customers

Efficient collection process

Improve asset quality better than the market

Continue to deploy proactive credit portfolio/ risk management/ asset quality management to mitigate an adverse impact from former political unrest and high household debt

High-impact customers: review policy/ process, and offer financial aid programs Low-impact customers: closely monitor

58

2% 2% 2% 4% 4% 5%

64%68%

68%60%

59% 56%33%

29%

29% 35%37% 38%

0.7%

0.4%

0.3% 0.3%0.3% 0.3%

0

100

200

300

400

500

600

700

2011 2012 2013 2014 1Q15 2Q15T rading Available-for-salesHeld-to-maturity GeneralInvestment in Receivables Investments Subsidiaries

(Bt bn)

264

382

568497560 565

Investment in Securities Portfolio and Structure

Note: Accounting for investments 1) Trading: Stated at fair value (FV). Unrealized gains or losses arising from changes in FV are recognized in the income statement 2) AFS: Stated at FV. Unrealized gains or losses arising from revaluation are reflected in the equity 3) HTM: Stated at amortized cost, after deduction of any allowance for impairment


Instrument Type Holding Type

KBank continues to manage its investment portfolio by focusing on ensuring sufficient liquidity at all times and adjusting investment position according to interest rate trend to enhance risk-adjusted return

0.4%

2010 2011 2012 2013 2014 1H14 1H15 1Q15 2Q15

Investment Portfolio (Bt bn) 251 264 382 497 568 532 565 560 565

% Growth (YoY) (1.48) 5.21 44.66 29.97 14.24 20.79 6.29 9.32 6.29

0.4%

0.01%

0.2% 0.2%

0.06%

0.04%

0.07%0.3%0.08%

0.09% 0.09%

59

97.5%

95.4%94.1%

93.7% 93.6% 93.9%94.7%

94.1%92.9% 93.2% 93.2% 93.6%

85%

90%

95%

100%

2011 2012 2013 2014 1Q15 2Q15

Loans to Deposits Loans to Deposits + B/E

1,2421,391

1,5301,630 1,653 1,669

36 19 19 10 7 40

300

600

900

1,200

1,500

1,800

2011 2012 2013 2014 1Q15 2Q15

Deposits B/E

Deposits Growth and Loans to Deposits Ratio

Deposits & B/E Loans to Deposits Ratio


(Bt bn)

2011 2012 2013 2014 1H14 1H15 1Q15 2Q15Deposits (Bt bn) 1,242 1,391 1,530 1,630 1,567 1,669 1,653 1,669

Deposits (% YoY) 12.9% 12.0% 10.0% 6.5% 6.8% 6.5% 6.4% 6.5%

Deposits (% YTD) 12.9% 12.0% 10.0% 6.5% 2.5% 2.4% 1.4% 2.4%

Loans to Deposits (%) 97.5% 95.4% 94.1% 93.7% 93.9% 93.9% 93.6% 93.9%

Deposits have grown at a consistent pace providing a stable source of funding

60

6% 5% 6% 6% 6% 5% 5%

62% 55%60% 58% 61% 62% 63%

32%40%

34%36%

33% 33%32%

0

400

800

1,200

1,600

2010 2011 2012 2013 2014 1Q15 2Q15

Current Savings Term

1,1001,242

1,3911,530

1,630 1,653(Bt bn) 1,669

Deposit Structure

Funding Structure and Interest Rate Movement

Funding Structure

KBank Interest Rate Movement (Retail customers)

Savings 0.50

Fixed 3M-12M 0.90-1.50

Fixed 24M-36M 1.70

MLR 6.50%

MOR 7.37%

MRR 7.87%

Deposit and Bill of Exchange Rates (July 18, 2015)

Lending rates (May 21, 2015)

(%)


90%91% 84% 86% 91% 89% 90%

8%5%

5%4%

5% 5% 4%

2%4%

11% 10%4% 6%

0200400600800

1,0001,2001,4001,6001,800

2010 2011 2012 2013 2014 1Q15 2Q15

Deposits ST and LT Borrowings Interbank and Money Market

1,2281,368

1,6541,769 1,793 1,850 1,862

1,2281,368

1,6541,769 1,793 1,850 1,862

6%

59%

51%22% 26%

11% 9% 5%

34%

45% 78%74% 89% 91% 95%

0

40

80

120

2010 2011 2012 2013 2014 1Q15 2Q15

ST Debentures B/E & Others LT Borrowing

(Bt bn)

72

9588

72

87

4%7%

85 83

ST and LT Borrowings

(Bt bn)

0

2

4

6

8

2007 2008 2009 2010 2011 2012 2013 2014 Jul 15

MLR Savings Fixed 3M

61

Long-term Senior/Subordinated DebenturesIssued Date

Name TypeEmbedded

OptionAmount

Maturity

Years

Interest Rate

(Per annum)

Interest Payment period

Credit Rating

Thai Currency Long-term Senior/Subordinated Debentures

03/10/2014

Subordinated debentures of

KASIKORNBANK PCL No. 1/2014

(Basel III-complaint Tier 2)

Unsecured

Callable

after

5.5 years

Bt14,000mn10.5 years

(03/04/2025)5.0% Quarterly

AA- (tha)

by Fitch Ratings

15/02/2012


KASIKORNBANK PCL

No.1/2012

Unsecured

Callable

after

5 years

Bt22,000mn10 Years

(15/02/2022)4.5% Quarterly

AA- (tha)

by Fitch Ratings

and axA by S&P

22/06/2010


KASIKORNBANK PCL

No.1/2010 *

Unsecured

Callable

after

5 years

Bt7,500mn10 Years

(22/06/2020)4.5%

QuarterlyAA- (tha)

by Fitch Ratings

Foreign Currency Long-term Senior/Subordinated Debentures

25/04/2014Senior Unsecured

Debentures of KASIKORNBANK PCL

Unsecured - USD350mn **5.5 Years

(25/10/2019)3.5% Semi-annually Baa1 by Moody’s

BBB+ by S&P

and BBB+ by

Fitch Ratings 20/09/2012Senior Unsecured

Debentures of KASIKORNBANK PCL

Unsecured - USD500mn **5.5 Years

(20/03/2018)3.0% Semi-annually

21/08/1996Subordinated debentures of

KASIKORNBANK PCL

Unsecured- USD183.31mn

20 Years

(21/08/2016)8.25% Semi-annually

BBB by S&P

Baa3 by Moody’s

Note: * The BOT has granted an approval for the Bank to early redeem the whole amount of the Debenture; therefore, the Bank would like to exercise the right to redeem the debenture prior to the maturity date on September 22, 2015

** The issued note is drawn from the Bank’s USD2.5bn Euro Medium Term Note Programme

62

KBank: The wholly-owned subsidiaries, and

Muang Thai Life Assurance

63

The wholly-owned subsidiaries of KBank: Business Profile and AspirationJune 2015

* In February 2012, KBank and Macquarie signed an Exclusive Strategic Alliance (ESA) covering a range of investment banking and securities operations; KSecurities and Macquarie Securities (Thailand) are traded under a new ticket, KSMACQ. The exclusive strategic alliance agreement ended in February 2015.

KAsset

EST. 1992

KResearch

EST. 1995KSecurities*EST. Jul 2005

KLeasingEST. Aug 2005

KF&EEST.1990

Company Name

KASIKORN ASSET MANAGEMENT CO., LTD.

KASIKORN RESEARCH CENTER CO., LTD.

KASIKORN SECURITIES PCLKASIKORN LEASING

CO., LTD.KASIKORN FACTORY AND

EQUIPMENT CO., LTD.

Company Profile

A leader in fund management business (i.e. mutual funds, provident funds, and private funds)

Professional in providing knowledge in economics, business, money, and banking

Only research house which is an affiliate of a bank

Professional in providing a complete range of professional and excellent financial solutions and services, including investment banking, securities underwriting, and securities brokerage

Professional in providing three core products: hire purchase, financial lease,

and floor plan

Professional in providing a complete range of machinery and equipment leasing services

Asset Size Bt2.3bn Bt0.07bn Bt17.73bn Bt89.13bn Bt13.84bn

Market Share 20.64% (#1) N/A 4.76% (#5)* 7.70 % N/A

2015 TargetsMaintain Top Tier

position

Top of mind research house for media and for the clients

of KBank and its wholly-owned subsidiaries

Maintain leading position in securities business

Maintain a good asset quality portfolio

4-7% YoY growth on outstanding loans

3-year Aspiration

Maintain Top Tier position

Top of mind research house

Maintain position as a leading securities firm

Provide complete range of financial solutions and

maintain good asset quality

Maintain leading position in equipment leasing industry

64

1.191.43

1.84

2.25

3.23

3.66

1.80

0

1

2

3

4

2009 2010 2011 2012 2013 2014 1H15

The wholly-owned subsidiaries of KBank: 1H15 Key Operating Performance

The wholly-owned subsidiaries of KBank: Net Profit

Net profit continues to rise, along with synergy among KBank and its wholly-owned subsidiaries

(Bt bn)

Since January 1, 2011, financial statements have been reclassified per the Bank of Thailand’s requirements; the 2010 financial statements were restated and adjusted for comparison purposes; in 4Q10, KBank early adopted TAS 19 (Employee Benefits) and TAS 12 (Income Taxes) to align with international practices and standards; 2009 financial statements were restated for comparison purposes

Note:

KAsset

EST. 1992

KResearch

EST. 1995KSecurities*EST. Jul 2005

KLeasingEST. Aug 2005

KF&EEST.1990

1H15 Key Operating Performance

Assets Under Management (AUM): Bt1.12trn

(7.37% YoY)

Most quoted research house in the media

- Trading volume: Bt488.9bn

- Number of customers grew 41% YoY

Outstanding loans:

Bt88.90bn (0.96% YoY)

Outstanding loans:

Bt13.44bn (22.42% YoY)

* In February 2012, KBank and Macquarie signed an Exclusive Strategic Alliance (ESA) covering a range of investment banking and securities operations; KSecurities and Macquarie Securities (Thailand) are traded under a new ticket, KSMACQ. The exclusive strategic alliance agreement ended in February 2015.

June 2015

65

241 319 353509

635742

851946

1,090 1,123

1,7562,228 2,167

2,5762,883

3,0153,633

4,2535,118

5,443

0

500

1,000

1,500

0

2,000

4,000

6,000

2006 2007 2008 2009 2010 2011 2012 2013 2014 1H15

Total Industry AUM KAsset AUM

KAsset Highlights in 1H15

(Bt bn) (Bt bn)

KAsset AUM Breakdown by Type

AUM (KAsset vs. Industry)

Market Share by AUM

24.619.3

12.0 8.9 5.9

29.323.4

18.311.8 8.3 7.2

30.922.2 19.6

12.87.8 9.1

28.421.3 19.6

11.8 8.4 10.3

28.720.64 19.12

11.687.39 10.9

30.27

0

20

40

KAsset SCBAM KTAM MFC BBLAM Other

2011 2012 2013 2014 1H15

Industry Outlook:

1H15 industry AUM at Bt5.44trn, rising 11.89% YoY

KAsset AUM at Bt1.12trn, growing 7.37% YoY

KAsset Highlights:

Continuously ranked #1 since 2009, with 20.64% market share in 1H15

Mutual fund accounts for 81% of KAsset AUM

(%)

June 2015

66

KResearch Highlights in 1H15

Industry Outlook:

Only bank affiliated research house providing knowledge in economics, business, money, and banking

KResearch Highlights:

Most quoted research house in the media. Top of mind research house for media, and for the clients of KBank and its wholly-owned subsidiaries

Number of News Quotes

June 2015

67

7,967 8,544 7,962 8,640

12,377 12,486 13,772

21,55120,345

10,263

4191 117 207

430 411 817

1,296 1,251

489

0

200

400

600

800

1,000

1,200

1,400

0

5,000

10,000

15,000

20,000

25,000

2006 2007 2008 2009 2010 2011 2012 2013 2014 1H15

Total Industry Trading Volume KS Trading Volume

3 .3 3 .04 .2 4.8 4 .4

1 1 .9

5 .9

2 .84.1

4 .8 4 .8

11 .9

6 .0

3 .5 3 .44 .5 4 .6

1 1 .5

6 .2

3.7 3 .0

5 .0 4 .5

1 0 .6

4 .83 .6

2 .8

5 .24 .1

9 .2

0

5

10

15

KS SCBS KTZ BLS TNS MBKET

2011 2012 2013 2014 1H15

KSecurities Highlights in 1H15

(Bt bn) (Bt bn)

KSecurities Revenue by Business

Trading Volume (KSecurities vs. Industry)

Market Share by Trading Volume(%)

Investment Banking

7%

Brokerage 93%

Industry Outlook: 1H15 industry trading volume* was Bt10.26trn,

increasing 33% YoY KS trading volume was Bt489bn**

KSecurities Highlights: KS** ranked #5, with 4.76% market share;

maintaining position as one of the leading securities firms

Majority of revenue came from brokerage Number of customers grew 41% YoY, to 86,390

customers in 1H15

* Industry trading volume excluding proprietary trade** In February 2012, KBank and Macquarie signed an Exclusive Strategic Alliance (ESA) covering a range of investment banking and securities operations; KSecurities and Macquarie

Securities (Thailand) are traded under a new ticket, KSMACQ. The exclusive strategic alliance agreement ended in February 2015; KS trading volume includes one month of MACQ volume.

**Note:

June 2015

**

68

KLeasing Highlights in 1H15

703 682 631 615549 800

7941,435

1,331

882

3692.9

11.3 22.133.9

43.6 53.963.8

82.989.2

89.8 88.9

0

50

100

0

500

1,000

1,500

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 1H15

Total Car Sales in Thailand KLeasing Outstanding Loans

(Thousand Units) (Bt bn)

KLeasing Outstanding Loans Breakdown**

KLeasing vs. Industry*

KLeasing Highlights:

1H15 KLeasing loans totaled Bt88.90bn, growing 0.96% YoY

1H15 KLeasing NPL ratio was 1.29%, lower than the Thai commercial bank average ratio

Note: * Excluding captive and non-bank leasing ** Definition of loan type: Hire Purchase = car loans to retail customers; Fleet = a bulk of car loans to corporate and SME customers; Floor Plan = a bulk of car loans to car dealers

Market Share by Total Outstanding Loans (%)*(%)

Industry Outlook:

1H15 industry car sales totaled 369,106 units, declining 16.29% YoY

Hire Purchase

65%

Fleet / Financial

Lease28%

Floor Plan7%

34

17 16 14 11 8

35

18 14 1511 7

35

1814 15 11 7

34

2014 14 10 8

33

2213 15

10 8

0

25

50

TBANK AYCAL TISCO SCB KK KLeasing

2011 2012 2013 2014 1H15

New Car89.2%

Used Car

0.04%

K-Car to Cash10.7%

June 2015

69

KF&E Outstanding Loans

(Bt bn)

Industry Outlook:

Growth in Equipment Finance (EQF) business forecasted using numerous factors including total import volume and total registration volume of equipment and machinery from the Department of Industrial Works and Capital Investment Index

KF&E Highlights:

KF&E outstanding loans were Bt13.44bn, rising 22.42% YoY

KF&E currently ranked #3; maintaining the lead position in equipment leasing industry

Note: In 2010, KASIKORN FACTORING (KFactoring) was renamed KASIKORN FACTORY AND EQUIPMENT (KF&E) to better reflect their business, which is focused on offering leasing services for machinery and equipment; the factoring business operation of KFactoring was transferred to KBank

KF&E Highlights in 1H15

3.91

8.019.34

10.86

12.3813.44

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

2010 2011 2012 2013 2014 1H15

June 2015

70

25.0

13.6

8.8

12.4 10.3

8.5 5.7

2.3 2.9 3.1

7.3

22.8 14.9 10.3 12.5 9.6 9.7 5.4 3.1 2.8 2.9 6.0

20.617.7

12.0 11.4 10.4 9.8

5.13.2 2.4 2.4

5.1

-

5.0

10.0

15.0

20.0

25.0

30.0

AIA MTL BLA TLI SCBLife KTAL AZAY PLT FWD OLIC Others

2013

2014

1Q15

151.1 166.8 173.3 202.5 222.0259.2

296.3328.6

391.4442.5

503.9

133.7

29.1 30.9 33.2

44.0 44.7

57.0 63.8

68.0

82.9 93.9

108.3

20

40

60

80

100

120

0

100

200

300

400

500

600

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 1Q15

Total Premium First Year Premium

Market Share by Total Premium in Life Insurance (%)

Premium per % GDP by Country

(%)

Life Insurance Industry in Thailand

(%)

Size of Market by Premium(%)

Total Premium

(Bt bn)

First Year Premium

(Bt bn)

Source: The Thai Life Assurance Association


Source: Swiss Reinsurance

Note: Total Premium = New Business Premium + Renewal Premium; New Business Premium = First Year Premium + Single Premium

In 2013, low penetration rate of 3.8% in Thailand with a high opportunity for growth

Muang Thai Life Assurance (MTL) ranked #2 in life insurance industry in Thailand, in 1Q15

#2 in total premium with 17.7% market share and 19% growth

#1 in new business premium with 26.5% market share and 11% growth

15.0 6.9 4.4 2.1 3.2 3.1 1.7 3.0 1.2 0.9 0.6

14.5

7.5

4.4 3.0 3.1 3.2

1.6 3.8

1.6 1.5 0.6

13.9

7.0 4.3

3.0 3.4 3.3 1.8 2.7

1.1 0.8 0.7

0

5

10

15

20

Ta

iwan

So

uth

Ko

rea

Sin

gap

ore

Au

stra

lia

Ind

ia

Ma

lays

ia

Ch

ina

Th

aila

nd

Ind

on

esi

a

Ph

ilip

pin

es

Vie

tnam

Y2011

Y2012

Y2013

* First Year Premium in 1Q15 = Bt28.2bn

71

Bancassurance Highlights in 1Q15

Bancassurance Life industry slow in 1Q15, with total premium and new business premium dropping 7% and 32% YoY, respectively

MTL ranked #1 in Bancassurance market

#1 in Bancassurance total premium with 27.3% market share and 22% growth

#1 in Bancassurance new business premium with 34.1% market share and 16% growth

(%)

Bancassurance Market Share by Total Premium (%)

Bancassurance Market Share by New Business Premium (%)

23.7

14.3

22.8

12.5

4.7 4.1 3.9 3.7 2.7 1.5

6.0

25.1 17.4 19.9 13.8 6.1 4.3 3.9 3.4 1.8 1.2 3.2

27.3

20.0 19.9

12.9

5.8 4.0 3.3 3.1

1.5 0.9 1.3

0

10

20

30

MTL BLA SCBLife KTAL PLT TLI FWD AZAY AIA DLA Others

2013 2014 1Q15

Source: Muang Thai Life Assurance (MTL)Note: Bancassurance premium include all bank partners‘ premiums of MTL

26.1

20.6

11.5

6.610.2

4.9 3.5 4.42.4 3.1

6.6

27.6 16.9 13.0 8.0 16.6 3.9 3.4 2.7 2.1 2.4 3.3

34.1

18.7

13.1

7.7 7.44.5 3.9 3.1 2.5 2.4 2.7

0

10

20

30

40

MTL SCBLife KTAL PLT BLA TLI FWD AIA AZAY DLA Others

2013 2014 1Q15

(%)

72

Current KBank Economic Interests

Muang Thai Group Holding Co. Ltd(MTGH)

51.0%

Muang Thai Life Assurance PCL(MTL)

38.3%

Muang Thai Insurance PCL(MTI)

10.1%

Muang Thai Broker Co. Ltd(MTB)

50.5%

KBank’s Strategic Acquisition in Muang Thai Group Holding (MTGH)

Established April 6, 1951 First life insurance company to be granted Royal

Patronage (since 1959) Joined hands with Ageas in 2004 (formerly known as

Fortis Insurance International NV) and joined hands with KBank in 2005

Credit Rating: BBB+/Stable and axA+ (ASEAN) from S&P’s, A-/Stable and AAA(tha)/Stable from Fitch Ratings

Life Insurance Company with Outstanding Management Award from OIC five years in a row

Ageas holds 7.8% in MTGH and holds 25% in MTL

Note: OIC = Office of Insurance Commission

MTGH

MTLMTI MTB

73

Strategy in 2015

Enhance the process and quality of services especially regarding technology as the aspiration is to become digital insurer and at the same time, develop products and services to effectively satisfy the needs of all customer groups

2015 Key Financial Targets

Bt bn 2011 2012 2013 2014 2015T

Total Premium after refund 37.9 48.9 60.2 75.2

% Growth 28% 29% 23% 25% ≥ 18%

2013 2014 1Q15

ROE (%) 26.1% 24.6% 22.8%

ROA (%) 3.4% 3.2% 2.9%

Risk-Based Capital (RBC) 431.6% 546.8% 517.0%

Muang Thai Life Assurance (MTL) Information Summary Strong fundamentals and revenue generation, helped by process efficiency and service quality

enhancements; platform and synergy alignment between MTL and KBank

Risk-Based Capital (RBC) remains strong, sufficient to support business growth and much higher than OIC minimum requirement

Source: Muang Thai Life Assurance, data based on book value except for RBC Note: OIC = Office of Insurance Commission

Statements of Comprehensive Income (Bt bn) 2013 2014 1Q15

Net premiums earned 58.4 73.1 22.8Net investment income 8.3 10.1 2.8Total revenues 66.7 83.2 25.7Life policy reserve increase from the previous period 34.2 40.8 14.2

Benefits payments to life policyholders 8.7 13.9 3.8Insurance claims and loss adjustment expenses 2.0 2.2 0.6Commissions and brokerages 10.6 12.9 3.6Other underwriting expenses 0.6 0.6 0.1Operating expenses & Other 3.4 4.3 1.1Total Expenses 59.4 74.7 23.3Profit before income tax expense 7.3 8.5 2.3

Income tax expense 1.4 1.6 0.4Net profit (loss) 5.9 6.8 1.9

Statements of Financial Position (Bt bn) 2013 2014 1Q15

Total Assets 190.7 240.2 265.2Total Liabilities 166.6 208.8 231.8Total Equities 24.1 31.5 33.4

74

MTL Investment Portfolio and Insurance Premium

Total Premium by Products: Ordinary product accounted for around 90%

MTL Total Premium:Growth continues to outpace the industry

MTL Investment Portfolio: Fixed Income accounted for around 80%


Total Premium Growth

MTL Industry

(%YOY)Y2010Y2011Y2012Y2013Y20141Q15

38%28%29%23%25%19%

14%11%19%13%14%-1%

(bn)

Assets Under Management (AUM)* (1Q15): Bt 252.2 bn

Total Premium by Channels: Bancassurance accounted for about 70% in 2014

*Remark: Invested Assets + Investment Property

75

MTL’s Life Insurance Product ProfileFour Major Types of Life Insurance Product

Ordinary Life Insurance Products: Provide life protection for a fixed amount to an insured person

Can be further classified into four sub-categories;

Endowment Life Insurance: Savings type product; insured person receives an amount at the certain period of

time or a designated beneficiary receives death benefits upon the death of the insured person within the insured

period (e.g. Pro Saving products)

Term Life Insurance: Provides temporary protection with no savings component. Claim can be made upon death

within the stated term period (e.g. MRTA products)

Whole Life Insurance: Provides life time protection (to the age of 90 or 99) with the death benefit paid to the

beneficiary upon the death of the insured (e.g. Pro Life products)

Rider: Additional coverage desired by the insured (sample of additional coverage: medical expense, accident)

Group Life Insurance Products: Term insurance covering a group of people, usually employees of a company or

members of a union or association

Industrial Insurance Products: Life insurance with a modest amount of coverage, low premium, and no health check

requirement

Personal Accident : A limited life insurance designed to cover the insured in case of personal accident

76

Life Coverage at 100% of the sum insured amount

End of Policy Year

Premium Payment at the Beginning of

Policy year

Maturity Benefit100%

Maturity Benefit100%

End of Policy Year

Premium Payment at the Beginning of

Policy year

Life Coverage at 100% of the sum insured amount

Sample of K-Bancassurance and MTL Products

Pro-Savings 615Life insurance with a premium payment of only 6 years, but the coverage continues for 15 years

MRTA-Home (Mortgage Reducing Term Assurance)

Ormsap 20/14Pay premium for only 14 years, but the coverage continues for 20 years

Healthy Value1 year coverage period, covered medical expenses up to Bt2mn

Endowment Life Insurance

K-Bancassurance Products1 Muang Thai Life Assurance Products2

Endowment Life Insurance

Term Life Insurance Term Life Insurance

1) K-Bancassurance products are MTL’s life insurance products selling through KBank2) Muang Thai Life Assurance products are MTL’s life insurance products selling through MTL sales agents, and/or other channels

77

Sample of K-Bancassurance and MTL Products

Pro Life 80/4Life insurance that provides coverage up to the age of 80 with term of premium payment only 4 years while receiving cash bonus every 2 year from the end of policy year 2 and onwards as well as life coverage at 100% of the sum insured throughout the contract

Kumkrong TalodcheepSaving plan with whole life coverage: pay premium for only 20 years and get coverage to the age of 99

Pure CancerAdditional cancer insurance which provides cash benefits up to Bt1mn

PA PlusAccident coverage

Health Care PlusHospital and surgery benefit rider

Whole Life Insurance Whole Life Insurance

Rider Rider

1) K-Bancassurance products are MTL’s life insurance products selling through KBank2) Muang Thai Life Assurance products are MTL’s life insurance products selling through MTL sales agents, and/or other channels

K-Bancassurance Products1 Muang Thai Life Assurance Products2

78

KBank: Other Information

79

April 17, 2015 (Closing Registration Date)Shareholder Structure

Top 10 Shareholders* % Shareholder Structure

1. THAI NVDR CO., LTD**

2. CHASE NOMINEES LIMITED

3. STATE STREET BANK EUROPE LIMITED

4. STATE STREET BANK AND TRUST COMPANY

5. HSBC (SINGAPORE) NOMINEES PTE LTD

6. NORTRUST NOMINEES LIMITED-NT0 SEC LENDING THAILAND CL AC

7. THE BANK OF NEW YORK MELLON

8. GIC PRIVATE LIMITED – C***

9. NORBAX INC.,

10. RBC INVESTOR SERVICES TRUST

Other Shareholders

Total

28.040

11.935

9.360

4.721

2.416

1.913

1.514

1.476

1.047

1.034

36.545

100.000

Foreign Shareholders

49%

Thai Shareholders

51%

(NVDR = 28.04%**)

Thai Shareholding Limit 51%

Foreign Shareholding Limit 49%

Note:

Source: Thailand Securities Depository Company Limited (TSD), the Stock Exchange of Thailand website (www.set.or.th), and KBank

Note: * The Top 10 Shareholders are based on individual accounts** Thai NVDR Co., Ltd (Thai NVDR) is responsible for issuing and selling Non-Voting Depository Receipts (NVDRs) to investors. The Stock Exchange of Thailand (SET) is the major shareholder, holding 99.99%

of the total shares, of Thai NVDR. The NVDR limit for KBank is 35%.*** GIC holds KBank shares via two accounts. Combining those two accounts, GIC holds 1.81% of KBank shares, ranking them at number 7

**** Thailand Securities Depository Company Limited (TSD), a subsidiary of the Stock Exchange of Thailand, provides three types of securities post trade services: securities depository services, securities registration services, and provident fund registration services; the shareholders booked under TSD are those who are not eligible for dividend payments as their investment is not aligned with their citizenship (i.e. foreign investors buying KBank shares on the local board or Thai investors buying KBank shares on the foreign board)

80

Credit Ratings As of July 31, 2015

Outlook Government Outlook

Long-term * Senior Unsecured

Notes

Subordinated Debts

Long-term Subordinated Debts

Moody's Baa1 Baa1** Baa3 Baa1** N/A Stable Baa1 Stable

S&P's BBB+ BBB+ BBB N/A N/A Stable BBB+ Stable

Fitch BBB+ BBB+ N/A AA (tha) AA- (tha) Stable BBB+ Stable

KBank Thailand

Local Currency/ National RatingsForeign Currency

Note: * Moody's: Foreign Currency Long-term Deposit Rating; S&P's: Long-term Counterparty Credit Rating; Fitch Ratings: Foreign Currency Long-term Issuer Default Rating

** Due to a change in Moody’s global bank rating methodology, without any change in its view towards KBank fundamentals, the foreign currency senior unsecured debt and long-term local currency deposit ratings were downgraded from A3 to Baa1 on June 5, 2015

81

Organization Chart

Risk Management Committee

ShareholdersAuditor

Corporate Secretary Board of Directors

Advisory Directors to the Management

Committee

Management Committee

Corporate Governance Committee

Human Resources and Remuneration Committee

Audit Committee

Advisory Council to the Board of Directors/

Legal Adviser

World BusinessDivision

Human ResourceDivision

Systems DivisionFinance and Control

DivisionEnterprise Risk

Management DivisionCustomer Service Fulfillment Division

Corporate Secretariat Division

Corporate Strategy Management Division

Corporate Business Division

Corporate and SME Products Division

SME Business Division

Compliance and Audit Division

Retail Business Division

Capital Markets Business Division

Investment Banking Business Division

Independent Directors Committee

82

Board of Directors Structure

• Prof. Khunying Suchada Kiranandana(Vice Chairperson, Lead Independent Director and Chairperson of the Human Resources and Remuneration Committee)

• Prof. Dr. Pairash Thajchayapong

• Sqn. Ldr. Nalinee Paiboon, M.D.

• Mr. Saravoot Yoovidhya

• Dr. Piyasvasti Amranand(Chairman of the Audit Committee)

• Mr. Kalin Sarasin

• Ms. Puntip Surathin

• Mr. Wiboon Khusakul

Executive Directors (3)

• Mr. Krisada Lamsam(Vice Chairman and Chairman of the Corporate Governance Committee)

• Ms. Sujitpan Lamsam

• Dr. Abhijai Chandrasen (Legal Adviser)

• Mr. Somkiat Sirichatchai(Chairman of the Risk Management Committee)

15 board members: 8 Independent Directors, 3 Executive Directors, and 4 Non-Executive Directors Director age limit is not to exceed 72 years old Term limit of directorship for Independent directors is not more than three consecutive terms of

directorship, effective after the Annual General Meeting of Shareholders (AGM) in 2013 Lead Independent Director and Independent Directors Committee were appointed in order to ensure

proper checks and balances

Independent Directors (8)Non-Executive Directors (4)

• Mr. Banthoon Lamsam(Chairman of the Board and Chief Executive Officer)

• Mr. Predee Daochai(President)

• Mr. Teeranun Srihong(President)

83

Economic

EnvironmentalSocial

Shareholders

Board of Directors

Employees

Customers

Counterparties

Competitors

Creditors

Community Environment and Society

Statement of Corporate Governance Principles: The Board of Directors strongly believes that good corporate governance will enhance the sustainable growth of performance of the Bank, and is central to achieving the Bank’s primary objective of maximizing shareholder value. The corporate governance practices at KASIKORNBANK provide the structure which enables this objective to be achieved, whilst ensuring that the business and affairs of the Bank are conducted competitively under high ethical standards and in accordance with the law.

Sustainable Development

Note: More information on our Sustainable Development can be found on our website and KBank’s Sustainability Development 2013 report

• Environmentally Friendly Business Operation

• Environmental Management Policies i.e. Water, Energy, and Climate Change (3R)

• Cultural of Environmental Awareness and Protection

EnvironmentalSocial

• Labor Relations Management and Employee Caring

• Employee Development• Occupational Health and Safety• Youth Development• Community and Social Development

Economic

• Corporate Governance• Customer Centricity

• Professionalism• Financial Knowledge

• Innovation• Risk Management

84

Public Recognition Highlight: 2013 – 1H152014 2013

-Thailand Top Company Award 2014: Finance & Banking Sector

- Best Retail Bank in Thailand - Best Social Media Project - The Best Cash Management Bank in Thailand

- Best Thai SME Bank in Treasury & Working Capital

- Best Bond House 2013

- Best Retail Bank of The Year 2014

SET Awards 2013:- SET Award of Honor for Excellence in

Corporate Governance Report 2008-2013- Outstanding Investor Relations - Outstanding Corporate Social Responsibility - Outstanding company performance

- Best Retail Bank in Thailand- Best Cash Management Bank in Thailand - The Best Managed Banks Achievement Awards 2013- The Achievement in Credit Risk Management Award

- Best Retail Bank of the Year 2013

- Asia’s Best CEO (Investor Relations) - Asia’s Best CFO (Investor Relations)- Best Investor Relations Company (Thailand)

- The Asset’s Platinum Awards, Banking and Finance Sector- Best in Treasury and Working Capital – SMEs, Thailand- Best Regional Cash Management Solution

- Best Local Bank in Thailand- Trade Finance Award for Excellence

- Channel Excellence in Branch

- Best Use of Social Media in Customer Service

- Thailand Zocial Award 2013: Top Finance brand in Social network

- The Best Acquiring Institution in SEA (K-PowerP@y (mPOS))

- ESCO Excellent Supporting Bank Awards 2013

- Branch Innovation of the Year - Bronze- Thailand Domestic Cash Management Bank of the Year - Thailand Domestic Trade Finance Bank of the Year

- SME Bank of the Year – Asia 2013

- Best Bank- Best Cash Management Bank

- Best Investor Relations by a Thai Company 2013

- Domestic Retail Bank of the Year - Thailand- Online Banking initiative of the Year - Thailand- Best branch Innovation – Silver- Thailand Domestic Cash Management Bank of the Year

- Asia’s Best CEO - Asia’s Best Corporate Governance

- Best Retail Bank of the Year

- Best Merchant Acquiring Initiative of the Year- Best Debit Card of the Year (Thailand)- Best Card Design of the Year APAC (Highly Commended)

- Consumer Protection Thailand Call Center Awards 2014

- Global Finacial Services Awards 2014 - Digital Market

-Top Companies for Leaders

SET Awards 2014:- SET Award of Honor for Excellence in Corporate Governance Report 2008-2014- Best Investor Relations Awards- Outstanding Investor Relations Awards- Outstanding Corporate Social Responsibility Awards

- Best Investor Relations by a CEO- Best Investor Relations by a Thai Company 2014

- Trade Finance Award for Excellence

- Best Cash Management Bank

IAA Awards for Listed Companies 2014- Best CFO: Finance & Banking Sector- Best IR: Finance & Banking Sector

1H15

-Triple A Cash Management Bank in Thailand-Triple A Trade Finance Bank in Thailand

- Best Retail Bank in Thailand- Best Cash Management in Thailand

- Asia’s Best CEO (Investor Relations) - Best Investor Relations Professional (Thailand) - Best Investor Relations Company (Thailand)

- Best Cash Management in Thailand

IAA Awards for Listed Companies 2013- Best CEO: Finance & Banking Sector- Best IR: Finance & Banking Sector

- Best Retail Bank of the Year 2015

85

Banking System and Regulations Update

86

Thai Commercial Banks and Specialized Financial Institutions (SFIs)

Market Share (% of Total Loans) Market Share (% of Total Deposits)

6 SFIs

Note: 6 SFIs include Government Saving Bank (GSB), Government Housing Bank (GHB), Export-Import Bank of Thailand (EXIM Bank), Bank for Agriculture and Agricultural Co-operatives (BAAC), Small and Medium Enterprise Development Bank of Thailand (SME Bank), and Islamic Bank of Thailand (IBank)

14 Commercial Banks

As of May-15

9,93510,996

13,439

10,07411,793

13,57314,918

14,705

As of Jun-15

15,86615,65116,017 15,940

87

Regulations Update

Financial Sector Master Plan II (FSMP II)

Capital (Basel III)

Year 2015 onwards: FSMP III remains under BOT’s revision, with focus on promoting competition in financial systems and encouraging Thai banks to do business overseas, in line with AEC inception. Attention will also be paid to reducing system-wide operating costs, including establishment of central cash logistics facilities, and enhancement of fund transfer flexibility and efficiency nationwide

Year 2010-2014: The BOT’s FSMP II consists of three key policies: 1) Reducing system-wide operating costs 2) Promoting competition and access to financial services 3) Strengthening financial infrastructure, including market liberalization, increased access by foreign financial institutions via granting licenses in some business areas, and permission for an increased number of branches and ATMs

June 2013: The BOT announced the new “Guidelines and Conditions for Establishing a Branch and Undertaking the Business of a Branch of Foreign Commercial Bank’s Subsidiary”, allowing for new subsidiaries’ licenses of foreign commercial banks to open up to 20 branches and 20 off-premise ATMs

Year 2014-2015: The BOT established a licensing framework for new types of business operation for underserved specific markets, i.e. Nano-finance

Expected impacts on Thai banks: Move toward further liberalization, along with enhanced competition from non-bank companies

Expected impacts on KBank: Ability to maintain competitiveness over both existing and new players, helped by an effective customer-centric strategy and preparation for a changing environment

Source: The Bank of Thailand, KResearch

Thai and International Financial Reporting Standards (TFRSs / IFRSs)

Year 2015 onwards: The time frame is specified by the Federation of Accounting Professions (FAP); new and revised TFRS have been implemented since January 2015 including TFRS 13 : Fair Value Measurement; full IFRS conversion is expected in 2019 (1 year after the IFRS9 effective in EU)

Expected impacts on Thai banks: More logical and transparent presentation and disclosure, with different impacts on each bank

Expected impacts on KBank: Manageable impacts expected, as the Bank early adopted some IASs and IFRSs and continues to prepare for full implementation

January 2013 onwards: Basel III has been implemented in Thailand. BOT requirements are in line with international standards

Expected impacts on Thai banks and KBank: Manageable impacts expected

January 2016 onwards: Liquidity Coverage Ratio (LCR) will be implemented on phase-in basis, from 60% to 100% in 5 years

Expected impacts on Thai banks and KBank: Manageable impacts expected

88

Financial Sector Master Plan (FSMP) Implementation StagesFSMP III

(Y2015 onwards)FSMP II (Y2010-2014)

Looking forward to liberalizationFSMP I

(Y2004-2009)

Increase efficiency of the financial institutions system- ‘One Presence’ policy- Expand scope of business: ‘Universal Banking’

- New licenses for retail banks and foreign bank subsidiaries

Promote financial inclusion- Strengthen financial institutions (FIs) by promoting voluntary mergers

Protect customers

Source: BOT and KResearch

Reducing system-wide operating costs

Note: There are four types of Commercial banks in Thailand; Full service banks; Foreign bank branches; Retail banks; and Subsidiary

Further development based on FSMP II results Another feasibility

study in light of empirical results No official

announcement regarding FSMP III

Streamlining regulationsTackling remaining NPLs and NPAs(Allow banks to partner with private firms to work on raising attractiveness of NPAs, promote efficiency in the trading of NPLs and NPAs by establishing an NPA Information Center, and encourage write-offs of fully provisioned ‘doubtful of loss’ loans)

Promote competition- Encourage voluntary mergers to lower operating costs- Enhance the role of existing service providers (Liberalization of branch network, widen business scope, upgrade qualified retail banks to commercial banks, and expand branch network of foreign banks)

- Introduce new entry to fill gaps and create value-added - Reduce government ownership in the commercial banking sector

Promote financial access- Facilitate bank expansion of business, as well as support Specialized FIs in focusing on providing services to the populations without access to banks

- Introduce new service providers with microfinance expertise into the system

Promote development of financial products that help support risk management Enhance information system for risk management Push for draft/review of necessary financial laws to support risk management and

an expedited resolutions to NPLs Promote information technology utilizationDevelop human resources in the financial sector

Promoting competition and access to financial services

Strengthening financial infrastructure (including market liberalization, increased access for foreign financial institutions via grants of licenses for some business areas, and permission for an increased number of branches and ATMs)

89

Basel III: The BOT Implementation Timeframe The BOT implementation timeframe is mostly in line with the BCBS timeframe

Effective implementation: Since January 1, 2013 onwards Full Implementation: January 1, 2020

Transitional Arrangement for Capital Requirement

All dates are as of 1 January 2013 2014 2015 2016 2017 2018 2019 2020

Conservation Buffer* - - - 0.625% 1.25% 1.875% 2.5%

CET1: Min. Common Equity Tier 1 Ratio (after conservation buffer)

4.5% 4.5% 4.5% 5.125%(4.5%+0.625%)

5.75%(4.5%+1.25%)

6.375%(4.5%+1.875%)

7.0%(4.5%+2.5%)

Tier 1: Min. Tier 1 Ratio (after conservation buffer) 6.0% 6.0% 6.0% 6.625%(6.0%+0.625%)

7.25%(6.0%+1.25%)

7.875%(6.0%+1.875%)

8.5%(6.0%+2.5%)

CAR: Min. Total Capital Ratio (after conservation buffer) 8.5% 8.5% 8.5% 9.125%(8.5%+0.625%)

9.75%(8.5%+1.25%)

10.375%(8.5%+1.875%)

11.0%(8.5%+2.5%)

Countercyclical Buffer (Subject to the BOT consideration)** - - - 0.0-2.5% 0.0-2.5% 0.0-2.5% 0.0-2.5%

Source: Bank of Thailand (BOT), KBank

* Conservation Buffer is to ensure adequate capital to absorb losses during periods of financial and economic stress. Banks with a CET1 ratio less than the required conservation buffer (i.e. 2.5% CET1) will face various degrees of constraint on distribution of dividends and bonuses

** In periods of excess aggregate credit growth, the BOT may require banks to set a Countercyclical Buffer up to 2.5% to achieve the broader macroprudential goal of protecting the banking sector

*** Requirements and implementation timeline for liquidity ratios have not been finalized. Banks are required to submit data to the BOT for further calibration

Net Stable Funding Ratio (NSFR)***(Available Stable Funding / Required Stable Funding) 100% Effective

Leverage Ratio(Tier 1 / Exposure) 3%

Parallel run period Effective

Liquidity Coverage Ratio (LCR)***(Liquid Assets / Net Cash Outflows within 30 days) 100% LCR 60% LCR 70% LCR 80% LCR 90% LCR 100%

Effective (Phase-in)

90

Tier 1• Issued and paid-up share capital• Premium on ordinary shares• Legal reserve and Retained earnings

• Hybrid Tier 1 (<15% of total Tier 1)• Minority interest, Preferred stock

Common Equity Tier 1• Issued and paid-up share capital• Premium on ordinary shares• Legal reserve and Retained earnings• Other comprehensive income (OCI)

e.g. surplus on AFS bond and equity (100%), surplus on land & premises (100%)

Additional Tier 1• Hybrid Tier 1 with loss absorbency feature*• Minority interest, Preferred stock*

Deduction of Tier 1• Goodwill, Treasury stock, Deferred tax asset

• Investment in insurance (50% Tier 1 and 50% Tier 2)

Deduction of Common Equity Tier 1• Goodwill, Treasury stock*, Deferred tax asset• Intangible assets (new item: gradually deduct CET1, since 2014)

• Investment in insurance (Threshold Deduction) - Amount ≤ 10% of CET1, %RW = 250% (KBank’s Case) - Amount > 10% of CET1, deduct CET1

• Long-term subordinated debt• Hybrid Tier 1 (exceeds from Tier 1 limit)• General Provision

• Surplus on AFS equity (45%)• Surplus on land & premises (70% and 50%)

• Long-term sub-debt with loss absorbency feature**

• General Provision

Tie

r 1

cap

ital

Capital Definition Change (Consolidated)

Tie

r 2

cap

ital

Basel II Basel III

1

3

* Currently, KBank has no Hybrid Tier 1, Preferred Stock, or Treasury Stock** Long-term subordinated debentures must have loss absorbency feature, if issued

since 1 January 2013

2

1

91

31 Dec 2010: TAS Implementation

TAS 19: Employee Benefits(KBank early adopted in 4Q10; the formal effective date is January 1, 2011)

Use actuarial techniques to determine retirement reserve for eligible staff

TAS 12: Income Taxes (KBank early adopted)(KBank early adopted in 4Q10; the formal effective date is January 1, 2013)Use deferred income tax concept to record tax asset/ liability

BOT’s New Financial StatementPresentation/Convention

New and reclassified presentation lines in financial statement in order to align with revised TAS

1 Jan 2011: New financial statement presentation

IFRS 9 (IAS 39), IFRS 7 & IAS 32: Financial Instruments

Thai banks have implemented a new provisioning rule under IAS 39, since December 2006Thai banks have complied with IAS 39 when reporting embedded derivatives, since 2008

Full IFRS Conversion

4Q10 2013 2019 (Tentative)2014

TFRIC 13: Customer Loyalty Programmes

Deferred portion of income for reward credit granted

TFRS Conversion

TAS 21: Effects of Changes in Foreign Exchange Rates

Translate ‘Functional Currency’ to ‘Presentation Currency’

TFRS 8: Operating Segments

Disclose operating results for each key segment

TAS/TFRS Implementation

2015

TFRS 13: Fair value Measurement

Clear required factors and disclosure about fair valuation

TFRS Conversion

2016

TFRS 4: Insurance Contracts

Re-measuring insurance liability to reflect current market situation Unbundling deposit components

TFRSConversion

TFRS and IFRS Implementation*

Note: TAS = Thai Accounting Standard; TFRS = Thai Financial Reporting Standard; TFRIC = Thai Financial Reporting Interpretations Committee * Only financial impact

92

Updates on the Deposit Protection Agency (DPA)

Insured Deposit Under new Royal Decree

11 August 2012 – 10 August 2015 Up to Bt50mn

11 August 2015 – 10 August 2016 Up to Bt25mn

11 August 2016, onwards Up to Bt1mn

DPA Objectives and Missions

Amount of Insured Deposits Insured deposits include deposits and accrued interest denominated in Thai Baht accounts,

excluding non-resident Thai Baht accounts Blanket guarantee will be gradually phased-out to a limited coverage of Bt1mn per

depositor per institution Until 2011, Thai banks paid 0.40% per year of the daily average deposit amount (paid in

June and December), excluding deposits in foreign currencies and deposits from financial institutions not insured by the DPA

Since January 27, 2012, the contribution rate has increased from 0.40% to 0.47%, of which 0.46% is paid to the BOT to manage FIDF debts* and 0.01% is paid to the DPA

Royal Decree on an extension of deposit protection coverage was announced in the RoyalGazette on September 24, 2012

Deposit Accounts in Thailand (as of May-2015)

Enhanced understanding of the deposit protection scheme Close cooperation with related authorities to maintain stability of the financial institution system Establishment of an appropriate system for premium collection and sound management of the Deposit Protection Fund Development of an effective information system to ensure fairness of the deposit protection scheme, with accurate and rapid reimbursement Management according to Good Governance Principles and in compliance with international standards established by the International

Association of Deposit Insurers

Source: DPA, Bank of Thailand (BOT), KBank, KResearch

* According to the BOT announcement in the Royal Gazette, per the authority of the emergency decree dated May 11, 2012, financial institutions are required to pay 0.46% of the average deposit amount, B/Es, debt instrument (excluding the amount counted as capital), borrowings, and securities transactions under repurchase agreements, beginning January 27, 2012

Deposits (Corporate and Retail Deposits) # of Accounts % Amount (Bt mn) %

Less than Bt1mn 85,724,478 98.5% 2,701,891 22.5%More than Bt1mn, but less than Bt25mn 1,287,712 1.5% 4,255,799 35.4%More than Bt25mn, but less than Bt50mn 22,407 0.03% 800,360 6.7%

More than Bt50mn 18,942 0.02% 4,271,076 35.5%Total 87,053,539 98.5% 12,029,126 100.0%

93

Government Policy

94

Sources and Uses of Public Funds

Tax Revenue + Non-Tax Revenue

(Bt2.325trn)

Borrowing under FY2015 Budget Act

(Bt250bn)

+

Budget Planning

FY2015 Budget(Bt2.575trn)

=General Budget

(Bt2.12trn or 82.5%)+

Investment Budget(Bt0.45trn or 17.5%)

Budget Execution

Budget Disbursement

(96% target disbursement rate

+ carry-over)

FY2015 Budget

Extra-Budget Borrowing Quasi-Fiscal Instrument

Extra-Budget Borrowing under

Special Act/Decree

The government has no policy for using extra-budget borrowing to finance investment projects; however, the PPP and IFF are preferable choices for funding

SFIs taking deposits, borrowing, as well as government subsidy

Quasi-fiscal activities

(e.g Soft Loan Program)

General Administration (Bt917.9bn or 36%) Defense Debt services

Economic Services(Bt549.9bn or 21%) Promote R&D program to

enhance national innovation Subsidize SOEs

(e.g. Infrastructure project, free bus and train service policy) Infrastructure/Agricultural

Development

Social and Community Services (Bt1,107.2bn or 43%) Disaster Aids Universal Healthcare

Note: The Thai government's fiscal year (FY) begins on 1 October and ends on 30 September of the following year.

95

Calendar Year2012 2013 2014 2015

2016-2020Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

FY2014Budget Disbursement

Total Bt2.525trn

Disbursed

FY2015 BudgetTotal Bt2.575trn

Disbursed

Emergency Decree for Water Management

Total Bt350bn

Disbursed

Transport Infrastructure Development Project

Other Investment Stimuli

Consumption Stimuli

Sources: The Ministry of Finance (MOF), Office of the National Economic and Social Development Board (NESDB), and KResearch as of Aug 4, 2015

Government Investment and Stimulus: Progress Update

The project was terminated in January 2015 as the Cabinet ordered the PDMO to forfeit the term loan contract with financial institutions. However, a long-term water management plan worth Bt700bn is proposed to replace the old project

FY2013 = Bt2.25trn (Disbursement rate = 89.0%)

Corporate Income Tax Reduction (from 30% to 23% in 2012 and to 20% in 2013-2015); The National Catastrophe Insurance Fund

Performing-debt suspension;Bt300 daily minimum wage, Bt15,000 monthly income for civil servants;VAT maintained at 7.0%, Energy / cost of living

Bt23.4bn or 6.7%

Personal Income Tax Restructuring

Note: - PDMO = Public Debt Management Office, SOE = State of Enterprise, PPP = Public-Private Partnership, IFF = Infrastructure Fund

Cabinet approved, in principle, the Transport Infrastructure Development Plan 2015-2022 to be used as a framework for investment and operation over an eight-year period; the project, worth Bt2trn, is funded through Government borrowing, regular budget, PPP, and SOE funding

The BOI investment application approval were Bt562bn (Jun-Dec14) and Bt289bn (Jan-Jul15)

Rice pledging policy (2013/14 in-season rice (October 2013 – February 2014) is the final season)

Farmer Aid Program

Bt1,666.9bn or 64.7% (Cumulative disbursement as of May 2015)

96

344 282 250 250390

1.913.7

0

200

400

600

800

1,000

FY2012 FY2013 FY2014 FY 2015F FY 2016F

Bill

ion

Bah

t

Budget Deficit Financing Extra-budget borrowing

Government Fiscal Budget

Economic Policies

Key Points Implementation Process Possible Impacts/ Expected Budget

2015 Budget Act

2016 Budget Act

FY2015 budget at Bt2.575trn with a deficit of Bt250bn

FY2016 budget framework at Bt2.72trn with a deficit of Bt390bn

FY2015 Effective date: October 1, 2014 after

announcement in the Royal Gazette on September 29, 2014

FY2016 Effective date: expected to be on

October 1, 2015

Government spending will help maintain economic momentum

Fiscal sustainability to remain manageable in the near-term; however, continued debt creation, both from budget deficit and other borrowings, may impact long-term fiscal sustainability

Note: - FY2012 is actual data. FY2013 and FY2014 budget deficits are based on budget documentation, whereas extra-budget borrowing is projected by KResearch

National Legislative Assembly (NLA) passed regular budget for FY2015; extra-budget borrowing is not expected

Cabinet approved framework of a Bt2.72trn expenditure and Bt390bn budget deficit for FY2016

In addition to growth in commercial bank loans, government funding activities may affect liquidity in the system

- The Thai government's fiscal year (FY) begins on 1 October and ends on 30 September of the following year.

Sources: MOF, KResearch (as of January 2015)

97

Types of Projects

Budget: Around Bt1.91trn

Investment Period: 2015 - 2022 (8 Years)

Summary

Note: Preliminary data; pending more information from authorities

Thai Transport Infrastructure Development Plan 2015 – 2022 (Bt1.91trn)

Progress Update

1H15 2H15 2016 2017- 2022

Cabinet approved, in principle, the Thai Transport Infrastructure Development Plan 2015-2022 to be used as a framework for investment and operations over the eight-year periodGreen line extension contract awarded

Projects in Urgent Transport Action Plan beginsGovernment plans to open bidding for

dual-track trains and some electric train lines New PPP law expected to become effective

Government continues to open bidding for projects in Urgent Transport Action Plan

Private sector can join in some investment projects

Construction will peak around 2018-2019

51.6% Government Borrowing

15.6% Public-Private Partnerships

(PPP)

Source of Funds

Main funding is expected to be domestic borrowing under a regular budget act and PPP act

Bt1.91trn to be disbursed in FY2015-2021; the budget derives from the parts of general budget, investment budget, and/or extra-budget borrowing

Thai Transport Infrastructure Development Plan, worth Bt1.91trn, is expected to increase long-term potential economic growth by 1% each year and to reduce the share of logistics cost to GDP by 2%, from 14.4% to 12.4%

4.5% SOE

28.3% Regular

Investment Budget

33%Land

Transport

26%Dual-Track

Trains

30%Electric Trains in Bangkok

and Vicinity

5%Marine

Transport

3%Air transport

44% Urgent

Transport Action Plan (Bt848bn)

56%

3% Road Networks in Bangkok

Sources: Newspaper compiled by KResearch, as of July 2015

98

Urgent Transport Action Plan (Bt848bn or 44% of Bt1.91trn)

Urgent Transport Action Plan Budget (Bt bn)

1. Bangkok and Vicinity Mass-Transit System

451

2. Dual-Track Trains 265

3. Land Transport 96

4. Air Transport 26

5. Marine Transport 9

Total 848

Note: SOE = State of Enterprise; PPP = Public-Private Partnership; and IFF = Infrastructure Fund; MRTA = Mass Rapid Transit Authority of Thailand; SRT = State Railway of ThailandSource : Office of Transport and Traffic Policy and Planning, KResearch (as of March 27, 2015)

Urgent Transport Action Plan worth Bt848bn approved by the Cabinet in 2015, aimed at facilitating social stability and economic growth

Bt56bn of Urgent Transport Action Plan to be disbursed in FY2015

Sample of Urgent Transport Projects

Bangkok and Vicinity Mass-Transit System: • Bangkok mass-transit routes under MRTA (Green Line

expansion Phase 1&2, Orange Line, Pink Line, and Yellow Line)

• 3 Mass-transit routes under SRT (Airport Rail Link and Red Line)

Dual-Track Trains: 3 dual-track train lines (Jira-Khon Kaen, Prachuabkirikhan-Chumphon, and Nakhon Phanom - Hua Hin)

Land Transport : Motorways and Rural Roads to connect the country’s key production bases with those of neighboring countries

Air Transport: Airport expansion (Suvarnabhumi, Donmueang, Phuket, Chiangmai, and U-Tapao)

Marine Transport: Deep Seaport Expansion (Laem Chabang and Pak Bara)

99

56

193217

199

123

48

3 1

56

265

389

455

397

218

7154

0

50

100

150

200

250

300

350

400

450

500

FY2015 FY2016 FY2017 FY2018 FY2019 FY2020 FY2021 FY2022

Bill

ion

Bah

t

Urgent Transport Action Plan (Bt848bn) Total Plan (Bt1.91trn)

Source : Office of Transport and Traffic Policy and Planning, KResearch (as of March 27, 2015)

Government to gradually invest in transport infrastructure projects; bidding for several projects in 2016; construction to begin in 2017, with peak expected around 2018-2019

Total Plan: the total budget of the plan is expected to be around Bt1.91trn Urgent Transport Action Plan: worth Bt848bn or 44% of the total budget plan; Bt56bn is expected to be

disbursed in FY2015, and Bt792bn will be disbursed during FY2016-2022

Budget Disbursement Schedule (FY2015-2022)

Budget Disbursement Schedule for Thai Transport Infrastructure Development Plan

Note: The Thai government's fiscal year (FY) begins on 1 October and ends on 30 September of the following year.

100

Rail Transportation Cooperation Plan

Project Details

Thai-Japanese Rail Project High speed train Bangkok - Chiang Mai (distance: 672 km)Project Status: Signed memorandum of understanding on May 27, 2015 to cooperate on possible introduction of Japan's Shinkansen bullet-train technology Construction expected to begin mid-2016

Thai-Chinese Rail Project High Speed Train Phase 1 Bangkok - Kaeng Khoi (distance: 133 km)High Speed Train Phase 2 Kaeng Khoi –Map Ta Phut (distance: 246.5 km)High Speed Train Phase 3 Kaeng Khoi - Nakhon Ratchasima (distance: 138.5 km) High Speed Train Phase 4 Nakhon Ratchasima- Nong Khai (distance: 355 km) Project Status:Signed new cooperation agreement for railway sector on Dec 19, 2014Construction expected to begin late 2015

Private Sector High speed train Bangkok - Rayong (distance: 194 km) High speed train Bangkok - Hua Hin (distance: 211 km) Project Status:Preparing EIA study

Apart from the Thai Transport Infrastructure Development Plan, government opened infrastructure development projects to international cooperation as well as public private partnerships

Source : Newspaper, KResearch (as of August 5, 2015)

101

Events

Government Budgeting

2015 fiscal budget: NLA passed budget worth Bt2.575trn with Bt350bn budget deficit 2016 fiscal budget: Cabinet proposed framework worth Bt2.720trn with Bt390bn budget deficit

Economic Stimuli

Overdue rice-subsidy payments: paid around Bt92bn to help farmers Value-added-tax (VAT) rate: maintained at 7% until September 2015; increase to 10% in October 2015 Bt365bn economic stimulus measures: approved by the Cabinet on October 1, 2014 (Bt174bn carried over from 2014 fiscal

budget and Bt130bn from 2015 fiscal budget to accelerate investment projects, Bt25bn reallocated from unused budgets to appropriate projects, Bt23bn from unused central budget and from Thai Khem Kaeng project to refurbish infrastructure projects, and Bt40bn to help low income farmers) Financial aid to rubber farmers: provided financial aid worth Bt8.5bn and set up “Rubber Fund” to help sustain rubber industry

Economic Policy (to promote sustainable growth)

Energy pricing reforms: appointed new members to Energy Regulatory Commission to implement reforms Special economic zones (SEZs): assigned NESDB to develop a plan on SEZs to enhance Thailand’s border trade and

prepare for the AEC; set up SEZs in border provinces (1st phase includes Tak, Mukdahan, Sa Kaeo, Trat, and Songkhla) BOI investments: BOI approved “Seven-Year Investment Strategy“ to create value for Thailand and upgrade Thai SMEs Thai transport infrastructure development plan (2015-2022): endorsed plan worth Bt1.91trn

Economic Policy (to support private investment)

Projects for BOI privileges: approved 162 projects (Bt561.5bn) in Jun-Dec 2014; 800 projects (Bt289.26bn) in Jan-July 2015; and 6 Eco‐car Phase 2 projects Endorsed a five-year strategic plan for public-private partnerships (PPPs)

Economic Policy (to International organization)

Applied as one of the founding members of the Asian Infrastructure Investment Bank (AIIB)

Key NCPO and Government Events: May 2014 – August 2015

Source : Newspaper, KResearch (as of August 4, 2015)Note: National Economic and Social Development Board (NESDB), BOI = The Board of Investment of Thailand, NLA = National Legislative Assembly

102

Events

Regulatory overhaul to comply with international practices

Foreign Account Tax Compliance Act (FATCA): acknowledged outcome of negotiations on FATCA between Thailand and US Section 44: exercised powers under Section 44 of the interim charter to speed up efforts to address concerns over Thai

airlines raised by the International Civil Aviation Organization (ICAO) Tackled illegal, unreported, and unregulated (IUU) fishing activities in the country

Infrastructure investment initiative

Signed MOU for infrastructure investment: o Signed MOU with China to build standard-gauge tracks on two routes, namely Nong Khai and Map Ta Phuto Signed MOU with Japan on rail projectso Signed MOU to set up an SPV joint venture for the $60 billion Dawei project

Supported private sector investment in high-speed train projects

Legislation overhaul

Considering an overhaul of legislation covering social justice, consumer protection, human-trafficking, and business and financial law to conform with international standards

Politics National Legislative Assembly (NLA): appointed the NLA on August 24,2014, passing 105 laws as of August 4, 2015National Reform Council (NRC): appointed the NRC on July 22, 2014, drafting reform framework Constitution Drafting Committee (CDC): review draft of the new constitution

Actions in the pipeline

Energy Policy: reform petroleum concessions and energy price structures, including an LPG subsidy Tax Reform: reform tax collection, generate sufficient revenue for the government, and boost competitiveness for local

businesses, especially for SMEs 4G mobile licenses: prepare the auction for 4G mobile licenses

Key NCPO and Government Events: May 2014 – August 2015 (con’t)

Source : Newspaper, KResearch (as of August 4, 2015)

Note: National Economic and Social Development Board (NESDB); Special Purpose Vehicle (SPV)

103

Source: KResearch, information as of June 2015

Measures Details

Existing Financial measures for SMEs affected by Wage Hike (Bt300 daily minimum wage)

Offer soft loans worth Bt20bn from SME banks and Bt10bn from Social Security Fund Effective Period: March 2013 - December 31, 2018 for soft loans

Policy Loan Offer soft loans with 4% p.a with maximum loan amount of Bt5mn per firm to small SMEs to alleviate liquidity shortage from lukewarm economic recovery (amount: Bt1.5bn) Criteria from eligible SMEs : 1. SMEs affected by economic slowdown, 2. Start up SMEs, 3. Small SMEs wanting to expand, and 4. SMEs wanting to expand into AEC

Portfolio Guarantee Scheme Waive guarantee fee for the first year for SMEs Increase endowment for Portfolio Guarantee Scheme by Bt50bn, from Bt190bn to Bt240bn

Preparing SMEs for competitiveness

Set up One Stop Service Center for SMEs Provide free consultancy service covering the development of products and services, marketing planning, and financial management Assistance for SME internationalization into world markets. Invite large-sized enterprises to provide help and suggestion on accessing AEC and other international markets

Government Assistance Measures for SMEs

104

Ongoing Government Measures to Assist Cost of Living

Source: KResearch

Measures Details

Household Assistance Train and Bus Fares: A subsidized fare for buses and trains; some buses and trains provided for free Electricity: A full subsidy on electricity bills for households using less than 50 units of electricity per month

Energy Prices Diesel Fuel: Government intends to restructure diesel fuel prices to reflect global pricesNGV and LPG Price: Government lowered the NGV and LPG subsidy, allowing retail selling prices to reflect global market prices NGV price increased from Bt12.50/kg to Bt13.00/kg, beginning January 31, 2015 LPG prices are as follows: Household sector: refrained from subsidizing general households. Current

household LPG price is Bt22.96/kg. However, the government is exempting the oil fund levy for low income households; LPG price for low income households is Bt18.13/kg Transport sector: adjusted to market price at Bt22.96/kg Industrial sector: adjusted in line with relevant production costs, currently at

Bt22.96/kgFT Rate: Fuel Adjustment Tariff (FT) Rate for electricity is set to increase by less than the actual cost (from May-August 2015, FT rate at Bt0.50/unit )

Value-added-tax (VAT) Rate On July 14, 2015, the Government announced the following VAT Rates: Maintain the 7% value-added-tax (VAT) rate until September 30, 2016 After September 30, 2016, the VAT rate will be increased to 10%

105

Note : The debt to GDP has declined since January 2015 due to a change in GDP computation

Source: The Ministry of Finance (MOF), Fiscal Policy Office (FPO) and Public Debt Management Office (PDMO)

Public Debt to GDP and Fiscal Budget

Public debt to GDP ratio was 42.58% as of May 2015, still under the 60% limit set by the fiscal sustainability framework

Thai government is committed to keeping the ratio of public debt to GDP under 50%

42.58

38

40

42

44

46

48

4,500

5,000

5,500

6,000

Sep-13 Mar-14 Sep-14 Mar-15

% to

GD

P

Bill

ion

Bah

t

Public Debt % to GDP

Public Debt

Government budget disbursement rate for 8M FY2015 is 64.7%, slightly above the 62.0% in 8MFY2014

FY2015 budget disbursement target is 96%, compared to 95% in FY2014

13.420.4

29.837.4

42.6

51.458.4

64.7

9.718.9

30.137.5

43.649.2

56.462.0

68.175.6

80.6

89.0

0

10

20

30

40

50

60

70

80

90

100

Oct

Nov

Dec

Jan

Feb

Mar Apr

May Jun Jul

Aug

Sep

% C

umula

tive

Budg

et D

isbur

sem

ent

Rate

(%)

FY 2015 FY 2014 FY 2013

Budget Disbursement Rate

9M FY15 target 8M FY15 actual Unused FY15Budget

Total BudgetBt2.57trn

Bt1.95trn(76%)

Bt1.67trn (65%)

Bt0.90trn (35%)

General Budget Bt2.12trn

Bt1.61trn (76%)

Bt1.50trn (70%)

Bt0.70trn (30%)

Investment BudgetBt0.45trn

Bt0.33trn (74%)

Bt0.17trn (39%)

Bt0.28trn (61%)

106

Thai Economic Figures

107

USD/THB: End Period Interest Rate Trend

Currency and Interest Rate Outlook

Bt

Note: - F is estimated by KBank Capital Markets Research (as of August 5, 2015)

US monetary policy should start normalizing in 3Q15, as the US economy recovers its growth momentum. Two strongest points for the US are steady job gains and impressive housing recovery, providing less incentive for the Fed to keep interest rate near zero

USD-assets expected to gain across all assets including G7 and emerging market currencies and commodities. Lower interest rate differentials between Thailand and the US should lead to reallocation of assets back to the US and the USD/THB edging higher towards 35.25 by year-end 2015

MPC unanimously decided to keep the policy rate steady at 1.50% after August’s policy meeting, citing that the current level is already accommodative

The committee also noted that the previous 50bpscuts during March-April benefitted the economy, especially by weakening the Thai Baht, which helps enhance export competitiveness

Policy rate is expected to remain at 1.50% for the rest of 2015. The downside risk for further cuts diminished with a significant weakening of the Thai Baht, helping Thai exporters gain some FX competitiveness

30.15

31.5430.60

32.6832.91

35.25

30

32

34

36

4Q10 4Q11 4Q12 4Q13 4Q14 4Q15FUSD/THB

2.003.25 2.75 2.25 2.00

0-0.25 0-0.25 0-0.25 0-0.25 0-0.25 0.50-0.751.25-1.50

0.00

2.00

4.00

Dec-10 Dec-11 Dec-12 Dec-13 Dec-14 Dec-15F

% p

.a.

Fed Funds rate BOT's 1-Day Repurchase rate

- The Group of 7. G7 consists of the finance ministers and central bank governors of seven major advanced economies as reported by the International Monetary Fund: Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States, meeting to discuss primarily economic issues.

108

Monthly Economic Conditions: June – July 2015 Key economic figures in June

2015 suggest that Thai economy remained weak

Private consumption was undermined due to economic uncertainties and declining farm product prices

A sharp contraction in exports due to a retooling period of vehicle production apart from weak export demand from major trading partners

Current accounts surplus narrowed on profit repatriation

July 2015 headline and core inflation remained level amid rise in food items

Sources: Bank of Thailand (BOT), Ministry of Commerce (MOC), University of the Thai Chamber of Commerce (UTCC),

Office of Industrial Economics (OIE), Office of Agricultural Economics (OAE)

Note: NCPO = National Council for Peace and Order

Units: % over-year, otherwise indicated 20152014 1Q 2Q YTD. Feb Mar Apr May Jun Jul

Private Consumption Index (PCI) 1.2 0.7 -0.8 -0.1 0.1 0.8 -0.1 -1.7 -0.6Non-durables Index 0.8 4.1 3.7 3.9 4.4 3.3 3.1 3.5 4.5Value-added Tax at contant prices 0.3 1.0 1.8 1.4 -2.1 7.3 2.5 -2.5 5.3Imports of Consumer Goods at constant prices -2.2 7.2 4.7 5.9 19.6 6.6 4.1 -1.5 11.9Passenger Car Sales -41.4 -12.5 -27.3 -20.1 -12.5 -13.4 -24.7 -21.1 -35.4Motorcycle Sales -15.1 10.9 -5.0 2.8 1.2 17.9 -18.9 -7.0 8.5

Private Investment Index (PII) -1.2 0.6 0.9 0.8 1.8 0.6 0.6 0.2 0.9Domestic Sales Volume of Cement -0.4 -1.5 1.7 0.1 -2.9 0.2 1.7 -0.7 4.3Commercial Car Sales -26.8 -11.3 -16.1 -13.6 -9.6 -10.6 -27.3 -16.2 -4.5Imports of Capital Goods at constant prices -1.8 -0.9 -5.6 -3.3 11.7 -5.4 -3.7 -10.2 -2.8Value of BOI Applications 117.1 -86.8 n.a. -83.8 -76.4 -92.8 -78.6 -72.3 n.a.

Manufacturing Production Index -4.6 0.1 -7.6 -3.7 3.0 -1.7 -7.1 -7.6 -8.0Capacity Utilization 60.4 62.1 55.5 58.8 61.2 63.6 52.7 56.9 57.0

Agriculture Production Index 0.2 -3.7 -8.9 -6.1 -1.8 -9.8 -12.6 -7.7 -6.3Agriculture Price Index -6.2 -7.2 -5.8 -6.5 -2.6 -7.7 -7.5 -5.2 -4.6

No. of Tourists -6.7 23.5 35.0 28.6 29.6 25.5 18.3 38.2 53.1Exports (In terms of US Dollars) -0.3 -4.3 -5.5 -4.9 -6.0 -4.3 -1.8 -5.5 -8.9

Unit Value -1.0 -1.8 -1.8 -1.8 -1.6 -1.9 -1.9 -1.7 -1.7Volume 0.7 -2.6 -3.8 -3.2 -4.4 -2.4 0.2 -3.8 -7.3

Imports (In terms of US Dollars) -8.5 -7.2 -10.1 -8.7 1.6 -6.2 -9.1 -20.3 0.3Unit Value -1.8 -10.9 -9.7 -10.3 -10.7 -11.2 -10.2 -9.5 -9.5

Volume -6.8 4.1 -0.4 1.8 13.7 5.6 1.2 -12.0 10.9Trade Balance (USD millions) 24,583 7,425 7,847 15,272 2,568 3,465 1,707 4,152 1,988Current Account (USD millions) 13,412 8,188 4,134 12,322 3,490 2,210 1,113 2,127 893

Headline CPI 1.89 -0.50 -1.13 -0.85 -0.52 -0.57 -1.04 -1.27 -1.07 -1.05Core CPI 1.59 1.47 0.97 1.18 1.45 1.31 1.02 0.94 0.94 0.94

109

The Thai economic recovery, moving at a low gear, has put a pressure on living conditions, as evidenced by our KR Household Economic Condition Index (KR-ECI) in June 2015 , touching an 11-month low at 43.8.

A slow revival in income and purchasing power may undoubtedly be unable to outweigh the higher expenses and debts, shouldered by households in various sectors (both those with fixed and non-fixed income).

KR Household Economic Condition Index (KR-ECI)

KR Household Economic Condition Index (KR-ECI) Components of KR-ECI

Notes: 1.The KR Household Economic Condition Index (KR-ECI) has been devised by KResearch to monitor household sentiment towards economic conditions atthe current level and over the next three months. Any reading above 50 reflects a positive sentiment and below 50 a negative sentiment.

2. The research sample includes households in Bangkok and Metropolitan Area (BMA). 3. Components of KR-ECI are household savings, household income, household debt, household expenses excluding debt, and prices of consumer goods.

39.8

42.9

46.0

48.0

49.1

38.0

41.4

45.8

47.3

48.8

0 10 20 30 40 50 60

Prices of consumer goods

Household expenses excluding debt

Household debt

Household income

Household savingsJun-15

May-15

3-month Expected KR-ECI

Source: KResearch

43.8

45.2

38

40

42

44

46

48

50

52

Feb-14 Jun-14 Oct-14 Feb-15 Jun-15

KR-ECI

Current KR-ECI 3-month Expected KR-ECI

Source: KResearch

110

-0.6%

0.9%

-12.6%

2.4%

-1.5%-10.3%

-40%

-20%

0%

20%

PCI PII Car Sales Construction Materials

Imports of Capital Goods

Consumer's Durable

%Y

oY

1Q15 2Q15 May-15 Jun-15

74.4

49.1

30

35

40

45

50

55

60

6567697173757779818385

Jul-13 Oct-13 Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15

BSI

CC

I

Consumer Confidence Index (CCI) Business Sentiment Index (BSI)

Sources: BOT, MOC, UTCC, OIE

Jun-15 CCI dipped to 1-year low amid heightened concern over economic prospects

Jun-15 Private consumption remained bleak as consumers shrugged off spending, while private investment picked up

slightly

Jun-15 Foreign tourist arrivals continued to uptick, thanks to increasing visits from Chinese and Malaysian tourists

Jun-15 Exports fell on lackluster demand from ASEAN as well as an effect from low commodities prices

-8.2%

-8.9%

-20%

-10%

0%

10%

20%

30%

0

5,000

10,000

15,000

20,000

25,000

Jan-13 May-13 Sep-13 Jan-14 May-14 Sep-14 Jan-15 May-15

% Y

oY

Expo

rt Va

lue

(USD

Milli

on)

Exports Exports (excluding gold)% YoY for Exports % YoY for Exports exc Gold

Economic Condition Highlights: June 2015

15.9

19.2

22.4 2

6.5

24.8

14.816.9% 17.2% 18.9% 18.7%

-6.7%28.6%

16%31% 27%

23%

-5% 30%

-10%-5%0%5%10%15%20%25%30%35%

0.00

5.00

10.00

15.00

20.00

25.00

30.00

2010 2011 2012 2013 2014 6M 15No of Foreign Tourist Arrival% Tourist Arrival YoY (RHS)% Tourism Revenue YoY (RHS)

Mill

ion

Pe

rso

n

111

Jun-15 MPI declined on automotive plant retool, while CapU picked up on base-effect in petroleum products

Activity in the property market showed some improvement in 1Q15 due to pent-up demand

Land and property prices rose at a slower pace in 2Q15,aligned with economic conditions

-2-1012345

-0.5

0.0

0.5

1.0

1.5

Jul-13 Nov-13 Mar-14 Jul-14 Nov-14 Mar-15 Jul-15

%Yo

Y

%M

oM

Headline CPI (MoM-lhs) Core CPI (MoM-lhs)Headline CPI (YoY-rhs) Core CPI (YoY-rhs)

-20.3%

70.4%

15.8%

-100%0%

100%200%300%400%

1Q09

2Q09

3Q09

4Q09

1Q10

2Q10

3Q10

4Q10

1Q11

2Q11

3Q11

4Q11

1Q12

2Q12

3Q12

4Q12

1Q13

2Q13

3Q13

4Q13

1Q14

2Q14

3Q14

4Q14

1Q15

% Y

oY

Construction areas permitted in municipal zoneCondominium Registration Nationwide New Housing registered in BKK and Vicinity

2.5%7.5%

10.1%

-5.0

0.0

5.0

10.0

15.0

20.0

1Q09

2Q09

3Q09

4Q09

1Q10

2Q10

3Q10

4Q10

1Q11

2Q11

3Q11

4Q11

1Q12

2Q12

3Q12

4Q12

1Q13

2Q13

3Q13

4Q13

1Q14

2Q14

3Q14

4Q14

1Q15

2Q15

% Y

oY

Single House (With Land) Townhouse (With Land) Land

0.94% YoY

-1.05% YoY

Economic Condition Highlights: June - July 2015

Jul-15 Headline inflation maintained previous month’s level

Note: NCPO = the National Council for Peace and Order

Sources: BOT, MOC, OIE, REIC (Real Estate Information Center)

-8.0

57.0

35

45

55

65

75

(15)

(10)

(5)

-

5

Jul-13 Oct-13 Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15

%C

apac

ity U

tiliz

atio

n R

ate

%Yo

Y of

MPI

MPI (lhs) %Capacity Utilization (rhs)

112

Exports and Imports: 1H15

Source: Bank of Thailand (BOT), BOP Basis = Balance of Payment Basis

Japan15.8%

ASEAN17.8%

China16.1%

Middle East13.9%

EU8.7%

USA5.8%

Others21.9%

ASEAN 25.8%

EU10.5%

China11.0%

Japan9.8%

USA10.2%

Hong Kong5.7%

Middle East5.5%

Others21.6%

Total Imports (BOP Basis)1H15

USD Millions Weight %YoY Imports, f.o.b. (BOP basis) 90,382 100.0% -8.7%

Machinery, equipment, and supplies 20,731 22.9% -5.8%Fuel 16,422 18.2% -34.9%Electronics parts and electrical appliances

12,979 14.4% 4.0%Materials of base metal 8,717 9.6% -7.3%Non-durables Consumer goods 6,400 7.1% 3.0%Chemicals 6,136 6.8% -7.7%Agricultural and agro-manufacturing products 4,799 5.3% 8.7%Automotive 4,674 5.2% -5.7%Plastics

3,790 4.2% 2.9%Non-monetary gold 3,126 3.5% 17.6%

Total Exports (BOP Basis)1H15

USD Millions Weight %YoY Exports, f.o.b. (BOP basis) 105,654 100.0% -4.9%

Automotive 15,844 15.0% 0.7%

Electronics 15,617 14.8% -1.4%

Agro-manufacturing Products 12,797 12.1% -4.6%

Machinery & Equipment 9,705 9.2% 2.7%

Electrical Appliances 6,300 6.0% -2.0%

Petro-chemical Products 5,883 5.6% -11.3%

Metal & Steel 4,591 4.3% -2.1%

Other Manufacturing products 4,190 4.0% 1.3%

Petroleum products 4,126 3.9% -22.3%

Jewellery 3,607 3.4% 4.3%

Exports by Country

Top 10 Exports by Product (BOP Basis) Top 10 Imports by Product (BOP Basis)

Imports by Country

113

0

50,000

100,000

150,000

200,000

250,000

2010 2011 2012 2013 2014

ASEAN EU China Japan USA Middle East Others

US

D M

illio

n

0

50,000

100,000

150,000

200,000

250,000

2010 2011 2012 2013 2014

ASEAN EU China Japan USA Hong Kong Middle East Others

Top 10 Exports by Product (BOP Basis) Top 10 Imports by Product (BOP Basis)

Export and Import Data: 2009 - 2014Exports by Country

Source: Bank of Thailand (BOT), BOP Basis = Balance of Payment Basis

Imports by Country

22.7%4.9%6.7%

10.3%10.5%11.0%11.2%22.7%

22.5% 23.1%4.7%5.4% 5.7%

9.8% 9.9%10.7% 10..2%

11.8% 11.7%10.9% 9.5%24.3% 24.6%

21.8%

6.4%15.7%16.9%8.5%18.0%

12.8%

16.6% 16.2% 16.1% 16.6%7.6% 7.8% 8.1% 9.1%13.2%

13.3% 14.8% 15.0%20.7%18.4%

19.8% 16.4%5.8%5.9% 5.0% 5.8%

11.6%13.3%

12.9% 14.1%25.0% 23.2% 22.8%

24.4%

US

D M

illio

n

26.1%10.3%11.0%

9.6%10.5%

5.8%5.1%21.6%

Total Imports (BOP Basis)2014

USD Millions Weight %YoY Imports, f.o.b. (BOP basis) 200,194 100.0% -8.5%

Fuel 47,506 23.7% -8.7%Machinery, equipment, and supplies 44,300 22.1% -2.5%Electronics parts and electrical appliances

26,484 13.2% 0.1%Materials of base metal 19,552 9.8% -5.8%Chemicals 13,109 6.5% -2.1%Non-durables Consumer goods 12,765 6.4% -2.7%Automotive 9,695 4.8% -27.5%Agricultural and agro-manufacturing products 8,913 4.5% 0.3%Plastics

7,594 3.8% 0.7%Non-monetary gold 6,613 3.3% -56.1%

Total Exports (BOP Basis)2014

USD Millions Weight %YoY Exports, f.o.b. (BOP basis) 224,777 100.0% -0.3%

Electronics 33,321 14.8% 1.8%

Automotive 31,623 14.1% 0.1%

Agro-manufacturing Products 27,125 12.1% -2.5%

Machinery & Equipment 19,291 8.6% 8.5%

Petro-chemical Products 13,256 5.9% 7.6%

Electrical Appliances 12,327 5.5% 4.5%

Petroleum products 11,385 5.1% -11.9%

Metal & Steel 9,574 4.3% -11.2%

Other Manufacturing products 8,490 3.8% 5.6%

Chemicals 8,481 3.8% -6.0%

5.1%21.8%5.2%

5.5%10.0%9.7%

11.9%9.8%26.0%

114

29

.97

13

.82

16

.57

65

.92

67

.17

61

.32

13

6.9

4

0

100

200

300

400

500

Invest

ment

Valu

e(B

t bn)

2011 2012 2013 2014 5M15

447.3

983.6 1,026.7

1,663.0

1,094.0

0200400600800

1,0001,2001,4001,6001,800

2011 2012 2013 2014 5M15

Inve

stm

ent

Val

ue (

Bt

bn)

Source: BOT, MOC, OIE

(Data as of March 2015)

Capacity Utilization by Key Industries

Investment value of BOI-approved applications (by Industry)*

Source: The Board of Investment of Thailand (BOI)Note: *Figures above indicate investments of approved projects requesting investment promotion benefits from BOI

Investment value of BOI-approved applications (Total)*

Economic Condition Highlights: CAPEX and Investment Cycle

50.77

54.76

39.81

71.18

86.24

68.56

47.59

82.23

76.27

49.30

0 50 100 150

Food and Beverage

Tobacco

Garments

Paper and Paper Products

Chemical & Chemical Products

Rubber & Plastic Products

Basic Metal

Vehicles

Integrated Circuits & Parts

Household Electrical Appliances

2012

2013

2014

2015 5M

Avg 04-08

115

19.4

9.0 11.813.5

4.9 4.110.9

7.4 8.0

-15.0

-10.0

-5.0

0.0

5.0

10.0

15.0

20.0

25.0

Land Single House Townhouse

Supply Side: New Housing Completions and New Projects Launched in BMR*

1,000 Units

Demand Side: Transferred Properties in BMR*

Price Growth of Properties

Sources : National Economic and Social Development Board (NESDB), BOT, Real Estate Information Center (REIC), Agency for Real Estate Affairs (AREA), the BOT, and KResearch Note: * Including Condominium, Single House and Townhouse; BMR = Bangkok and Metropolitan Area

% (YoY)

Property Market: Economic headwinds may lead to repercussions in the property market Outstanding Mortgage Loans to Individuals and Property Developers loans to GDP

%

Avg. price growth in last 5-years (2010-2014): Land 6.1%; Single House 2.9%; Townhouse 4.7%

Avg. 5-year price growth before the crisis (1992-1996): Land 9.4%; Single House 6.3%; Townhouse 6.3%

146 161 178 151 159 182 170

40 41

0

200

2008 2009 2010 2011 2012r 2013r 2014 Q1/14 Q1/15

136 145 135 125

43 16 20 13 20 37 49 46 51 50 62 75 84

62 101 131 134

27 22

284

190 132

44

3

4 9 14 31 52 68 64 66 81 68

58 117 86 102 132

114

22 25

050

100150200250300 New Housing Completions New Projects Launched

1,000 Units

Mortgage loans to GDP is higher than the pre-crisis level, due to several factors such as changes in consumer behavior, intense competition among banks, and a more accessible credit market

Outstanding loans granted to property developers (including contractors) to GDP was 6.0% as of 1Q2015, still lower than the pre-crisis level

Supply Side: in Q1 2015, new housing projects declined due to economic slowdown

Demand Side: the number of transferring properties slightly increased, but the overall market still has a slow growth rate due to lack confidence amid the economic slowdown

Prices: property prices increased slightly due to an increase in business costs

Mortgage loan NPLs among Thai commercial banks remained low at 2.4% in 1Q2015, experienced a slight increase from 2.2% in 2014

10.1 12

.2 13.6

15.2 16

.8

16.3 14

.8

13.4

12.7

13.1 13

.7

15.1

16.0

16.0 15

.8

16.1 17.7

17.5

18.0

18.3

19.4 21

.2

21.4

12.4

13.5

13.6

13.9 16

.0

15.9

15.3

9.9

7.2

6.8 7.6

8.0

7.9

7.4

7.1

7.3 6.6

5.8

6.1

6.2

5.8

6.0

6.0

0

5

10

15

20

25

30

19

93

19

94

19

95

19

96

19

97

19

98

19

99

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14

1Q1

5

% Outstanding mortgage loans to GDP% Outstanding loans to Property Developers to GDP

116

Household Borrowing

Source: BOT, Bank for International Settlements (BIS), National Statistical Office (NSO), and KResearch

Household Borrowing to GDP

Household borrowing to GDP is higher than the pre-crisis level, due to several factors such as changes in consumer behavior, intense competition among banks, and a more accessible credit market

Thailand’s household debt to GDP is comparable to other countries; the debt service ratio of Thai households is still well below 40%**, indicating that the household debt situation is unlikely to trigger any problems in the foreseeable future

NPL ratio for consumption loans of Thai commercial banks increased slightly to 2.6% due to economic slowdown

Old Definition: Data from 1991 – 1997: lending from commercial banks and SFIs to individual persons for consumption onlyNew Definition: Data from 2010 onwards: takes into account individual persons’ outstanding loans from all types of financial

institutions, including savings Co-ops and non-banks

Old Definition New Definition

Cross-Country Comparisonof Household Debt*

Debt Service Ratio of Thai households**

% NPL for Consumption Loans of Thai Commercial Banks

* Thailand and Malaysia Household Debt as of 3Q14, Other Countries as of Y2013

117

Key Regulations for Mortgage Loans

Note: * The effective date is postpone from January 2012, due to the severe floods in 2011

Source: The Bank of Thailand

Price Condominium HouseLoan to Value

(LTV)Risk

WeightsEffective Date

≥ Bt10mn > 80%

75%

March 2009

< Bt10mn > 90% January 2011

< Bt10mn > 95% January 2013*

≥ Bt10mn ≤ 80%

35%

March 2009

< Bt10mn ≤ 90% January 2011

< Bt10mn ≤ 95% January 2013*

The BOT has taken preventive actions and closely monitored risk in the property market

Risk weights for mortgage loans dropped from 50% to 35% under Basel II since 2008

However, the BOT announced revised criteria in 2009-2010 on mortgage loan risk weights with a different effective date

118

Fed Policy Normalization and Thailand Economic Impacts

Fed began its QE tapering in January 2014; program concluded in October 2014

Fed may start the lift-off in late 3Q15

In instances where QE tantrum results in drastic fund outflows, Thailand’s external stability will likely be maintained; our FX reserves should be more than enough to meet all obligations

Thai banking system liquidity increased due to slow loan growth amid a rise in deposits; CAR and NPL ratio remained good (16.6% and 2.29% as of 1Q15, respectively), with strong profit-generating capacity (Bt223.9bn and Bt52.5bn in 2014 and 1Q15, respectively)

Pace of Fed’s asset purchases under Quantitative Easing Program

Source: KResearch and *FOMC (Oct 2014)

Thailand has enough FX reserves to meet all internal and external obligations

Thai commercial banks have high liquidity AssetsLiquid assets in Thai commercial banks increased

Note: Liquidity includes cash, as well as net positions in short-term money market and net investments

Fed QE Program concluded in Oct-14

2,5

75,1

92

2,3

91,1

71

2,3

15,4

46

2,3

35,3

70

2,3

65,2

78

2,2

66,1

17

2,2

02,9

42

2,2

62,8

46

2,2

68,9

36

2,2

78,9

65

2,3

84,2

73

2,5

65,9

87

2,5

29,7

53

2,5

96,0

77

2,5

07,5

88

2,6

33,9

82

2,6

86,1

46

2,6

16,9

60

92

93

94

95

96

97

98

99

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

Dec-

13

Jan-1

4

Feb-1

4

Mar-

14

Apr-

14

May-

14

Jun-1

4

Jul-14

Aug-1

4

Sep-1

4

Oct

-14

Nov-

14

Dec-

14

Jan-1

5

Feb-1

5

Mar-

15

Apr-

15

May-

15

Perc

ent

Mill

ion B

aht

Excess Liquidity LTD+BE

18.4

157.0

0

50

100

150

200

$ Billion

FX Reserves

Net Forward Position

53.5

38.1

54.7

0

50

100

150

200

$ Billion 3 months of imports

Reserves backing banknotes

ST External Debt

$175.4 Billion$146.3 Billion

Source: BOT, KResearchLast Update: July 24, 2015

119

High international reserve / Imports (Import Coverage)

High international reserve ratio / External debts

Low foreign holding ratio in Thai government bonds

Thailand’s external balances remain relatively strong compared to peers

9.27.8

14.9

8.6

6.8

9.1

6.7

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

India Indonesia Phillippines South Korea Malaysia Singapore Thailand

Nu

mb

er

of

Mo

nth

73.9%

37.4%

106.8% 85.3%

160.8%

105.5%

0%

50%

100%

150%

200%

India Indonesia Phillippines South Korea Malaysia Thailand

38.6%

10.9%

31.3%

47.0%

17.3%

0%

10%

20%

30%

40%

50%

Indonesia South Korea Malaysia U.S. Thailand

Thailand’s economy and financial markets are able to withstand impacts from QE tapering and its aftermath due to:

High import coverage (international reserves/monthly imports) compared with the IMF’s three month import coverage guideline

More than 100% of external debt covered by international reserves

Low portion of foreign holdings in Thai government bonds compared with other countriesNotes: 1) Thailand‘s international reserve as of June 2015 was USD160.2bn

2) Foreign investor holdings as of June 2015: - Thai Government bonds: Bt596bn or 16.3% of the total Bt3.7trn in Thai Government bonds- Thai bonds: Bt630bn or 6.5% of the total Bt9.6trn in Thai bond market size

Source: Various central banks, Asian Development Bank, Bloomberg, and World Bank; Complied by KResearch

Source: Bloomberg, KResearch (data as of March 2015) Note: Retrieved from Asia Bond Monitor (Volume June 2015) ,based on March 2015 data

Source: Asian Development Bank

Source: Bloomberg, KResearch (data as of March 2015)

120

Net impacts of decreasing oil price for the Thai Economy Continued decline in global crude oil price should benefit countries with net oil import, including

Thailand Lower price pressure should improve the efficiency of companies’ cost management, especially

businesses with high energy costs, including transportation and fishery industries

Positive Impact Industries

Negative Impact Industries

Rubber: due to competition from synthetic rubber Agricultural products used in alternative energy: sugar

cane, cassava, and oil palm

Lower crude oil price benefits 2015 GDP

Du

bai

Average 2014: 96.7 USD/bbl

2015: possibly droppingto 50-60 USD/bbl

Boost trade surplus: gains from less energy imports outweigh losses from tourist revenues and exports which depend on those oil exporters (Russia & OPEC countries), as well as related agricultural products

Lower inflation: a 10% drop in crude oil price would lead headline inflation to decrease by around 0.4%

Enable domestic energy restructuring: the Oil Fund status becomes surplus and the government receives more excise taxes on diesel

Better manage production costs: particularly industries with high energy costs

Increase consumer purchasing power (except farmers): given widespread product price drops

Note: Calculated from I-O Table

121

020,00040,00060,00080,000100,000120,000140,000160,000180,000200,000

-20,000-15,000-10,000

-5,0000

5,00010,00015,00020,00025,000

US

D M

illi

on

US

D M

illi

on

Current Account (LHS) FX Reserves (RHS)

Bond Yields

Current Account and FX Reserve

Other FiguresThai Bond Market Size (Gov't and Private bonds)

Foreign Holdings of Thai Bonds

4,88

8,17

7

5,08

5,98

0

6,11

8,23

7

6,96

2,13

6

7,32

7,10

0

8,57

9,95

7

8,99

1,81

9

9,28

7,28

8

9,62

3,23

6

57% 56%63% 64% 65% 69% 70% 71% 73%

0%10%20%30%40%50%60%70%80%

0

2,000,000

4,000,000

6,000,000

8,000,000

10,000,000

12,000,000

2007

2008

2009

2010

2011

2012

2013

2014

1H 1

5

Per

cen

t to

GD

P

Mil

lio

n B

aht

Thai Bond Outstanding (LHS)

Bond Market Size to GDP (RHS)

49,0

15

76,4

55

65,8

92 280,

459

418,

549

710,

467

707,

902

683,

214

630,

304

1.0% 1.5% 1.1%

4.0%

5.9%

8.3% 8.4% 7.4%6.5%

0%1%2%3%4%5%6%7%8%9%

-100,000

100,000

300,000

500,000

700,000

900,000

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14

1H

15

%o

f T

ota

l B

on

d M

arke

t

Mil

lio

n B

aht

Foreign Holding Outstanding (LHS)

% of Thai Bond Market (RHS)

1.62.0

2.22.4 2.5 2.7 2.7 2.8 3.3

1.50

2.50

3.50

4.50

6M 1Y 2Y 3Y 4Y 5Y 6Y 7Y 8Y 9Y 10Y 15YDec-12 Dec-13 Dec-14 Aug-15

* Data as of Aug 4, 2015

*

USD160.2bn (Jun15)

(+)USD12.3bn (Jun15)

%

122

Other FiguresHousing Loans/GDP

Credit Card Loans/GDP

Personal Loans/GDP

Source: BOT, NESDB

Note : Housing loans represent outstanding housing loans for personal consumption granted to individuals of householders by financial institutions (including Commercial banks, Finance companies, Credit financiers, SFIs, and Insurance companies but excluding Saving Cooperatives and others financial Institution)

Note : 1) Credit card loans represent outstanding credit card loans from commercial banks and non-banks, excluding SFIs, saving cooperatives and others financial Institutions

2) GDP as of 3Q2014

Note : 1) Personal Loans represent outstanding personal loans under supervision (including commercial banks and non-banks, excluding SFIs, saving cooperatives and others financial Institution)

2) GDP as of 3Q2014.

123

Other Figures

Credit Card Statistics

Loans to GDP as of 2014

Source: BOT, NSO, CEIC, and KResearch

Thai Banks’ Net Loans and NPLs

Note: Data on China, Korea and Japan include loans from commercial banks as well as financial institutions, the rest include loans only from commercial banks

Note : %YoY Net loans represent growth of net loans in 14 Thai commercial banks from CB1.1

Note: The credit card statistics number includes foreign bank and non-bank credit cards

GDP Per Capita

8.3%9.8%

7.9%

5.8%

-1.1%

11.1%

3.9%

7.3%

4.08%

1.50%

108,

955

119,

635

129,

089

136,

585

135,

144

150,

117

155,

926

167,

501

174,

338

176,

958

-2.0%0.0%2.0%4.0%6.0%8.0%10.0%12.0%

-

50,000

100,000

150,000

200,000

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Baht

GDP Per Capita % YoY

124

Other Figures

Net Foreign Direct Investment

Population and Labour force Unemployment Rate

Source: NESDB, National Statistical Office (NSO), and KResearch

% YoY

Million

Foreign Direct Investment Position by Countries

%

Note: - FDI refers to equity investment, lending to affiliates, and reinvested earnings; investment in equity is treated as a direct investment when the direct investors own 10% or more of ordinary shares- Net FDI is the net flow of FDI data in each year as per flow concept- FDI position by countries is an investment outstanding that nonresident investors have with resident enterprises as stock concept

125

CompetitiveEconomic

Region Development

EquitableEconomic

Development

IntegrationWith theGlobal

Economy

Single Market and Production

Base

Average Projected GDP Growth around 5 %

Source: IMF (April 2015) and KResearch

Size of ASEAN Economy (USD Trillion)

The ASEAN Economic Community (AEC)

Source: The Association of Southeast Asian Nations and KResearch

AEC by 2015

By December 2015, ASEAN will be transformed into the “ASEAN Economic Community,” with free movement of goods, services, investment, and skilled labour, and a freer flow of capital

126

• The materialization of regional supply chain will help maintain the region’s competitiveness through labor division

• The establishment of Thailand’s SEZs along the border is to tap into plentiful resources of CLM

• Consumer markets in CLMV will grow along with GDP increase and urbanization

1) Regional Connectivity

• The emergence of AEC and RCEP, as well as other FTAs, will attract even more FDIs into the region, especially from the +3 countries

• 2015 marks the completion of ASEAN Free Trade Zone amidst CLMV lowering their import tariffs close to zero

• Thailand will constitute the center of production in Mainland SEA, while low-value, labor-intensive processes will be moved to CLMV

3) High Growth Environment2) The Pluralism of Economic Integration

• Strategically located, Thailand is the most essential area for GMS connectivity

• Physical connectivity and ease of customs formalities will spur regional trade and promote regional supply chain

Note: CLMV = Cambodia, Laos, Myanmar and Vietnam; GMS = Greater Mekong Subregion; SEZs = Special Economic Zones, RCEP = Regional Comprehensive Economic Partnership

AEC as a Growth Driver

127

For Further Enquiries, Contact KASIKORNBANK Investor Relations:

Chief Investor Relations Officer Tel (66) 2470 2673-4

Fax (66) 2470 2680

Investor Relations Team Tel (66) 2470 6900-1

Tel (66) 2470 2659-62

Fax (66) 2470 2690

Email: [email protected]

IR Website www.kasikornbank.com Investor Relations

Disclosure Practice:

Unreviewed/unaudited quarterly financial reports are released within 21 days from the end of each period

Reviewed financial reports are released within 45 days from the end of the period for 1Q and 3Q; Audited financial reports are released within 2 months from the end of the period for 2Q and 4Q

Following KASIKORNBANK Disclosure Policy and good governance practice, KBank maintains a "silent period" for 7 days prior to the unreviewed/unaudited earnings announcement. During this period, the Bank refrains from replying to questions or commenting on the earnings announcement and arranging one-on-one or group meetings with analysts and investors

128

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or constitute an advice, offer, contract, recommendation or solicitation and should not be relied on

as such. In preparation of this document, KASIKORNBANK PUBLIC COMPANY LIMITED

(“KBank”) has made several crucial assumptions and relied on the financial and other information

made available from public sources, and thus KBank assumes no responsibility and makes no

representations with respect to accuracy and/or completeness of the information described herein.

Before making your own independent decision to invest or enter into transaction, the recipient of

the information (“Recipient”) shall review information relating to service or products of KBank

including economic and market situation and other factors pertaining to the transaction as posted

in KBank’s website at URL www.kasikornbank.com and in other websites including to review all

other information, documents prepared by other institutions and consult financial, legal or tax

advisors each time. The Recipient understands and acknowledges that the investment or

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no liability for any loss or damage incurred by the Recipient arising out of such investment or

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The Recipient also acknowledges and understands that the information so provided by KBank

does not represent the expected yield or consideration to be received by the Recipient arising out

of the execution of the transaction. Further the Recipient should be aware that the transaction can

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KBank reserves the rights to amend either in whole or in part of information so provided herein at

any time as it deems fit and the Recipient acknowledges and agrees with such amendment.

Where there is any inquiry, the Recipient may seek further information from KBank or in case of

making complaint, the Recipient can contact KBank at [email protected] or +(662) 470 6900

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* The information herewith represents data in the Bank's consolidated financial statements, some

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