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KK - Phatra
KIATNAKIN-PHATRA FINANCIAL GROUP Analyst Meeting 3Q12
October 30, 2012
KK - Phatra
Table of Contents
KK-Phatra Merger Highlights
Post Transaction
3Q12 Financial Highlight
Appendix
1
KK-Phatra Merger Highlights
KK - Phatra
KK-Phatra Financial Group Structure
3
Erawan Law Office 8 Funds(1)
99.9% 99.9%
99.7% 99.9% 99.9%
Target to transfer from KK to PCAP in 2013(2)
(1) Asia Recovery Fund 1 (99.95%), Asia Recovery Fund 2 (99.59%), Asia Recovery Fund 3 (99.97%),Thai Restructuring Fund (98.91%), Asia Recovery Property Fund 1 (99.50%), Asia Recovery
Property Fund 3 (98.77%), Bangkok Capital Fund (95.72%), and Gamma Capital Fund (94.03%) (2) As 90% tender offer condition was met, KKS will be transferred to PCAP at book value and KK-Fund at acquisition cost
KK - Phatra
KK-Phatra Financial Group Management Structure
4
(1) Includes KKS (2) Includes KK-Fund
Corporate
Lending Retail Banking Distribution Research
Investment
Banking Private Client(1) Investment &
Trading
Fund
Management(2)
Debt Capital
Market
Debt
Restructuring
Priority
Banking
Finance and
Budgeting
Corporate Strategy
Chaired by Mr. Supol Wattanavekin
Chaired by Mr. Banyong Pongpanich
Comprises of 6 members
Mr. Banyong Pongpanich
Chairman of
Commercial Bank
and President
BOD
CEO
Executive
Committee
Chairman of
Capital Market
and President
Risk
Management
Committee
Risk
Management
Commercial Banking
Management
Committee
Other Committees
Private Client Group
Management
Committee
Investment Banking
Group Management
Committee
Other Committees
Office of the Directors and
Corporate Communications
KK - Phatra
Reiterating Transaction Rationales Enhance Competitiveness Amidst Changing Business Environment
5
& Combine Platform of Commercial Bank and
Investment Bank
Combine Capital Strength
Combine Management Expertise
Post Merger Focus
Investment
Banking
Group
Commercial
Banking
Group
3
Private
Client
Group
2
Capital Market Business Commercial Banking Business
1
KK - Phatra
TCAP, 34%
BAY, 20%
SCB, 11%
Tisco, 11%
Toyota Leasing,
15%
KK, 6% KBank , 2%
TCAP, 27%
BAY, 18%
SCB, 14%
Tisco, 13%
Toyota Leasing,
11%
KK, 10%
KBank , 7%
Commercial Banking Group Specialized Retail and SME Bank
Market and Positions
High growth area with decent margin
Focus on segments where large banks do not have clear advantages
over small banks
Hire purchase especially used car segment
Profitable SAM business (NPA Investment)
Corporate Lending focusing on SMEs
Strong position in hire purchase business
Solid relationship with car dealers (over 3,000 dealers throughout the
country)
Strong loan growth of 19.3% in 9M2012 with average yield of 7.2%
and NPL of 1.5% at 9M2012
Focused business model for SMEs (corporate lending) segment
Emphasize on real estate development, apartment, floor plan,
logistics, and printing & packaging sectors
Strong loan growth of 22.1% in 9M2012 with average yield of 8.9%
(8.0% if excluded one time interest income) and NPL of 7.5% at
9M2012
Strong Loan Growth in All Segments
Market Share of HP Players
(1) CAGR from 2006 to 9M12
6
58% 65%
69% 67% 69%
72% 72%
34% 30%
26% 27%
24%
23%
23%
50.9 64.5
80.6 86.6
107.0
135.3
159.9
2006 2007 2008 2009 2010 2011 9M12
Hire purchase Commercial loan Others Total
2006 (THB 477 bn) 1H2012 (THB 1,067 bn)
Market CAGR 16%
1
8% 6%
5% 6%
7%
6%
4%
Loan outstanding, THB billions
+21.0%(1)
KK - Phatra
Commercial Banking Group Specialized Retail and SME Bank
Key Strategies
Retail segment
Continue HP growth momentum while emphasizing more on used car
segment
Explore new areas / segments and add more products – focus on
yield and profitability
Rationalize network strategy
Corporate segment - SMEs
Increase numbers of sectors to focus
Utilize investment banking / capital market knowledge and expertise
to expand
New lending business
Investment banking related lending
Private client lending
Other key strategies
Effective assets & liabilities management, assets recomposition, and
balance between duration and CoF
Improve efficiency
7
1
Gross SME Loans Breakdown by Banks
(1) Estimated by using outstanding loan end of 2011 divided by announced SME lending market share
Note: KTB should have sizable SME loan but data is unavailable
Source: Banks’ analyst presentations
13
30
55
98
101
194
238
383
437
0 100 200 300 400 500 600 700
TISCO
KK
GSB
SME Bank
TMB
BAY
SCB
BBL
KBANK
% of total
loan
Market
share
35.9% 20.0%
26.0% 17.6%
18.2% 10.9%
25.9% 8.9%
25.5% 4.7%
100.0% 4.5%
4.1% 2.5%
20.0% 1.4%
6.6% 0.6%
SME loan outstanding, THB billion
Total SME market is estimated at over THB 2 trillion(1)
KK - Phatra
Private Client Group Leverage on Kiatnakin Bank Customer Base
Markets and Positions
High growth area as domestic wealth accumulation continues –
natural demand for services
High competition but no clear winner in the market
With the merger KK-Phatra will cover the entire spectrum of private
clients, i.e. HNW, Mass Affluent, Retail, etc.
Strong positioning with sizable Asset Under Advise (AUA) at Phatra,
but can even expand more with the range of products offered
Currently concentrate heavily on equity brokerage with combined
market share of 5.7%(1)
Still unable to extract revenue due to limited product variety
Potential Assets Under Advise (AUA)
8
2
50.9 69.6 89.6 75.9 80.6 113.0
134.7 168.9
20.0 (2)
2005 2006 2007 2008 2009 2010 2011 Aug-12
Current Phatra AUA Potential AUA from KK
CAGR not including potential AUA from KK’s clients(3)
+20.3%
AUA, THB billions
(1) Combined market share of Phatra and KKS as of August 2012
Source: Settrade.com
(2) Include equity of insurance companies. Pursuant to Office of Insurance Commission regulation,
all investment of insurance companies must be kept at custodians. Thus, these assets were
transferred to custodians in 1Q09 (3) CAGR from 2005 to 1H2012 (4) As of August 2012
<2 mm 13%
2-10 mm 34%
10-50 mm 30%
>50 mm 22%
Potential Customer
87%
KK’s Deposit Breakdown by Individual Client Segments(4)
Total individual client deposit THB 126.1 bn
Potential AUA from KK’s clients
KK - Phatra
Private Client Group Leverage on Phatra PCG platform to serve clients seamlessly
Key Strategies
Focus on business integration
Client base
Sales force and distribution channels
Products and services
Maintain open architecture model
Focus on high margin product development
Structure products
Off-shore services
Credit enhancement products
To become a core distribution channel for the group
Leverage on Phatra PCG platform to serve clients seamlessly
Leverage from Phatra HNW
Expand to cover Mass Affluent
Improve retail business, leveraging on Phatra’s breath & depth in the
capital market
Plan to use Phatra brand and service platform to tap KK’s HNW clients
base
Integrated Service Model
9
2
High Net Worth
>30 mm
Mass Affluent
3-30 mm Retail
Mid
dle
Phatra Platform KKS Platform
Back
IT / Operation / HR
Fro
nt
Financial Consultants Investment Advisors Sales and online tools
KK - Phatra
Investment Banking Group Full Platform Investment Bank
Markets and Positions
Leading investment bank
#1 equity offering and M&A with share more than 14.3% and 33.5%,
respectively (2005-YTD)
Strong relationship with large Thai corporate (>75% client coverage
by market capitalization of SET 100 companies
Leading institutional brokerage platform
Ranked consistently among top 3
13 years of solid partnership with BofAML
Global market access and internationally recognized research
products
Profitable principal investment business with diversified strategies
and stringent risk control
Arbitrage trading strategies
Systematic trading strategy
Long-term value investment portfolio
General market is still growing with higher volume and new products
introduced into the market
Fierce competition from both existing players and new entries
Undisputed Leader in Equity Offering
Institution Market Share
10.0% 9.4%
11.2% 10.1%
7.5% 8.3%
7.1%
16.6% 14.9%
13.4%
10.5%
12.6% 11.8%
10.7%
2006 2007 2008 2009 2010 2011 9M2012
Foreign Local institution
10
174318334393
484651
796829
952
1,189
CS BofAML MS BLS CIMB KBANK SCB UBS Nomura
11 7 9 5 15 10 9 6 2 2 # Deals
3
Amount, USD millions
IPO&PO 2007 – August 2012
Market share, %
KK - Phatra
Investment Banking Group Capitalize on Bank’s Infrastructure to Setup DCM Franchise and Expand Investment Portfolio
Key Strategies
Establish DCM franchise
Set up Fixed Income and DCM business to complete the franchise
Active portfolio management to enhance yield / reduce negative carry
on AFS and held to maturity portfolio
Cooperation / alliance with foreign partners is essential
Enter Corporate Credit business via Specialized Financing Group
Expand Investment business
Portfolio can be gradually ramped up with enlarged capital and proper
risk management
Arbitrage and systematic trading strategies are conducted at PTSEC,
portfolio sizes are not limited by regulations, but rather depend largely
on market opportunities and risk framework. These 2 portfolio are not
taking directional risks, with position covered almost entirely while
using low leverage
Bond Outstanding as % of GDP
Diversified Investment Portfolio
*Return pre-leverage and pre-operating costs
11
3
0%
20%
40%
60%
80%
100%
120%
140%
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011 0
2,000
4,000
6,000
8,000
Domestic Bond (RHS) Domestic Bond Bank Loans SET
Loan outstanding, THB billions % of GDP
Source: ThaiBMA
Strategies Current Size
(THB millions)
Average Return
(%)
Arbitrage 2,000-3,000 8-12%*
Systematic Trading 1,500 10-14%*
Long-term Investment 1,500-2,000 20-25%
KK - Phatra
240.6 252.1
Post Transaction
12
Enlarged Market
Capitalization
Actual TO of 99.9% at KK
market price
Combined Assets Size
Enlarged asset size from
Phatra’s investment
portfolio
Goodwill from the merger
totaled Baht 4.7 bn
Unit in THB billions
38.7
30.1
Sep 24,12 Sep 25,12
+4.8%
As of September 30, 2012
Market Capitalization
KK-Phatra
11.5
Wattanavekin Family 23.6%
Phatra Management
and Employees
10.3%
Free Float 66.1%
New Shareholding Structure
4.7
Goodwill treatment
Goodwill was the difference between the value of the
compensation transferred (number of KK shares time the
closing share price of KK on the last day of TO period)
and the net value of assets and liabilities as of the
purchase date
Goodwill is not counted as the Bank’s Tier 1 capital
Impairment test of goodwill is required every year at the
same period of each year
Impaired goodwill will be recorded as expense in the
statement of comprehensive income
KK-Phatra
3Q12 Financial Highlight
KK - Phatra 14
14
72% 74% 75% 76% 76% 76% 76% 76% 76%
25% 24%
23% 23%
23% 22% 22%
23% 23%
100.9 107.3 115.1
121.9 130.2 135.7
145.3 154.1
160.3
0
20
40
60
80
100
120
140
160
180
200
3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12
Baht in billion
Retail Corporate SAM Others
7%
6% 7%
4% 7%
7%
6% 4%
Retail Banking (76%)
Auto Hire Purchase (72%)
Growing continuously by 19.3%ytd
Outstanding port of Baht 115,657 million
New : Used = 52:48
NPL increased to 1.5% from 1.0% in 2011
Other retail loans (4%)
Micro SMEs
Personal loan
Housing loan
SME Lending (23%)
RE (Real Estate Development) (12%)
Impressive growth of 16.3%ytd
NPL reduced to 10.7% from 11.6% in 2011
More than 96% of NPL was from loans approved before
2006
SME loans (11%)
High growth of 29.4%ytd
NPL increased slightly to 3.9% from 3.6% in 2011
Gross Loan Composition
Strong Loan Growth in All Segment
KK - Phatra
5.92 5.45 5.28 5.08 5.10 4.97 4.72 4.68 4.87 4.74 5.07 5.22 5.74
7.0% 6.3% 5.9%
5.4% 5.1%
4.6% 4.1% 3.8% 3.7% 3.5% 3.5% 3.4% 3.6%
6.2% 5.6% 5.4% 5.1% 4.8%
4.4% 4.0% 3.7% 3.6% 3.4% 3.4% 3.3% 3.5%
3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12
Classified loan %Classified loan/ gross loan % BOT NPL ratio
Baht in billion
15
Slight asset quality deterioration
Gross Classified Loan
KK - Phatra
RE SAM SME
Coverage ratio was 103%, with outstanding general provision of
Baht 303 million
SAM
NPL ratio was 3.6%, slightly higher relative to 3.4% in 2Q12,
3.5% in 1Q12, partly from flooding impact as well as strong loan
growth throughout the year.
17.6 121.2
Total gross loans (Baht in billion)
19.6 1.4 2.2 0.7 2.1 0.7
Total classified loans (Baht in billion) Collateral Coverage
50.9%
10.7%
1.8% 3.9%
3.6%
SAM
RE Retail
SME
45%
64%
156%
70%
103%
98%
SAM RE
SME Retail
198% 152% 23% 108%
16
(ex. general provision Baht 0.3 billion)
% Classified loans / Gross loans % Reserve / Classified loans
NPL and Coverage ratio
KK - Phatra
Stable yield and cost of fund if excluding lower HP yield in 1Q12 and
high RE yield in 2Q12. Cost of fund remained high from DPA and
FIDF fee, interest rate environment, and deposit competition.
*Earning assets includes net loan, NPA, Interbank & money markets and Investment in loans & properties
NIM = (net interest income) / average earning assets including Interbank, investment in securities, investment in loans, loans net deferred revenue
17
Net Interest Spread Total Income Yield
Income yield climbing from better interest income earning of all lending
businesses as well as greater NPA sale
*
Stable cost of fund
7.8% 8.1%
7.8% 7.7% 7.8% 7.8% 7.3%
8.4%
7.8%
2.8% 2.9% 2.9% 3.1% 3.7% 3.8%
3.8% 4.0% 4.0%
5.0% 5.2%
4.6% 4.3%
3.9%
3.4% 3.0%
3.7%
3.1%
5.1% 5.2% 4.9% 4.7%
4.2% 3.9% 3.5%
4.4%
3.8%
3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12
Interest income on average loan Cost of fund (inc. DPA fee)
NIM Spread on loan
2.8% 2.9% 2.9% 3.1% 3.7% 3.8% 3.8% 4.0% 4.0%
6.9% 7.4%
5.3% 5.5% 5.3%
4.2% 3.9%
4.6% 4.7%
9.7% 10.3%
8.2% 8.6%
9.0%
8.0% 7.7%
8.6% 8.7%
3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12
Cost of fund
Spread on earning assets
Interest income on average earning assets
KK - Phatra 18
7% 4% 5% 3% 5% 7% 11% 14% 13%
55% 62% 52% 42% 39% 36% 35%
41%
58% 22%
18% 27% 35% 40% 42%
38%
25%
13%
12% 12%
13% 13%
11% 11%
13%
15%
12%
108.4 114.4
125.7
144.2 156.6 160.3
171.6
192.9
205.2
0
25
50
75
100
125
150
175
200
3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12
Baht in billion
CASA Fixed Deposits B/E Debentures Interbank
Deposits grew strongly mainly from converting BE
to term-deposits once the BoT implemented the
FIDF fee charged on deposits, BE and debentures
from all banks
CASA mix was 13% of total interest bearing debt,
while term-deposit portion increased to 58% from
BE conversion.
Newly issued short-term debentures during 3Q12
were Baht 1,535 million
Liabilities duration was 0.6 year, duration gap was
1.2 year
Interest Bearing Debt
Funding mix shifting to deposits
KK - Phatra 19
Income breakdown – 9M12
AM 2%
SAM 29%
Bancassurance 25%
Brokerage Fee 14%
Bank Fee 12%
Investment 14%
Other 6%
Interest Income Breakdown Non-Interest Income Breakdown
HP 55%
Other retail 5%
RE 13%
SME 9%
SAM 6%
Others 12%
Appendix – Corporate Performance
KK - Phatra 21
Baht in million 3Q12 YoY
Consolidated Results
3Q11 2Q12 9M12 QoQ 9M11 YoY
Interest income 3,789 3,061 24% 3,741 1% 10,543 8,205 28%
Interest expense 2,007 1,384 45% 1,820 10% 5,413 3,288 65%
NII 1,782 1,676 6% 1,921 (7%) 5,129 4,917 4%
Fees income 616 438 41% 501 23% 1,571 1,136 38%
Fees expense 66 49 35% 50 30% 166 109 52%
Net fees income 551 389 41% 450 22% 1,405 1,027 37%
Other operating income 701 470 49% 365 92% 1,421 1,240 15%
Total operating income 3,033 2,536 20% 2,735 11% 7,955 7,183 11%
Operating expense 1,507 1,059 42% 1,212 24% 4,047 3,443 18%
Impairment loss (427) (372) 15% (560) (24%) (1,143) (812) 41%
Income before income tax 1,099 1,104 (0%) 963 14% 2,765 2,928 (6%)
Net income -Bank 928 860 8% 818 13% 2,323 2,242 4%
Diluted EPS 1.36 1.35 1% 1.28 6% 3.58 3.54 1%
ROAA (%) excl Goodwill 1.6% 1.9% 1.5% 1.4% 1.8%
ROAE (%) excl Goodwill 15.0% 14.5% 13.2% 12.7% 13.1%
ROE (%) excl Goodwill 15.3% 15.7% 13.5% 12.8% 13.7%
CI - Bank 853 754 13% 908 (6%) 2,230 2,046 9%
ROAA (%) excl Goodwill 1.4% 1.7% 1.7% 1.3% 1.7%
ROAE (%) excl Goodwill 13.8% 12.7% 14.7% 12.1% 12.0%
ROE (%) excl Goodwill 14.1% 13.8% 15.0% 12.3% 12.5%
KK - Phatra
Efficiency ratio
22
Total income ratio
1/(Operating expense excl. Loss from fair value adjustment) / Net revenue
*Earning assets includes net loan, NPA, Interbank & money markets and Investment in loans & properties
**Excluding extraordinary item resulting from the legal issue with the Legal Execution Department
Cost to earning assets
Operating cost to earning assets remained the same below 1%
**
0.8% 0.9%
0.8% 0.7% 0.7%
0.8%
0.7%
0.6% 0.6%
3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12
45.3%
52.4% 48.8%
45.4%
59.4% 60.5%
45.3%
48.4%
4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12
Cost to Income1 Cost to Earning Assets*
Cost to income ratio fluctuated in late 2011 -mid 2012 due to
flooding impact on both interest income and SAM business as well
as more branch opening.
**
KK - Phatra 23
Loan to Deposit Ratio
As KK’s funding structure relies on both deposit and borrowing, loan to
deposit & borrowing is a better measure of KK’s liquidity
96.8% 96.8% 93.6% 91.2% 87.2% 87.6% 88.0% 84.5% 81.0%
149.9% 141.9%
159.3%
186.8% 190.5%
196.6%
186.6%
144.5%
109.4%
3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12
Loan to deposit & borrowing
Loan to deposit
Liquidity
Loan to Deposit & Borrowing Ratio
KK - Phatra 24
14.6 16.9
18.8 20.2
21.9 22.3 22.3 23.0 22.6
27.3
15.42%
16.29%
15.18% 15.36%
15.76% 15.50% 15.42%
15.10%
14.01%
15.03%
14.93%
15.69%
14.55% 14.72%
15.09% 14.83% 14.73%
14.40%
13.32%
14.39%
2008 2009 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12
Total Capital CAR Ratio Tier I Capital Ratio Baht in million
Total capital increased from the success of
Tender Offer totaling 99.93% of Phatra shares at
the swap ratio of 1 Phatra: 0.9135 KK, equaled
to KK newly issued 191,979,745 shares.
Goodwill is not included in the Tier 1 capital in
accordance with the BoT
If including 9M12 net profit:
CAR ratio = 15.37%,
Tier 1 ratio = 14.72%
CAR Ratio and Tier 1 Ratio
High quality capital (common equity)
Appendix – Retail Banking
KK - Phatra 26
Highlights
Outlook
HP loans grew by 19.3%ytd, with 4.3%
penetration rate for 9M12 with industry car
sales up 48.9%yoy
Emphasize more on used car segment, and
continue strong loan growth supported by
government subsidy program and auto sale
resume
Expect yield to remain high with support
from used car HP loan portion
classified loan increased to 1.5%, partly
from flood-affected clients, strong HP loan
growth, and more used car HP lending
Keep conscious in screening & monitoring
portfolio to control NPL level
Loan yield got back on track due to both new
loan booking and the termination of flooding-
relieved scheme
Trend and Outlook
Baht in billion Baht in billion
92.3 96.9
104.6 110.8
115.7
3Q11 4Q11 1Q12 2Q12 3Q12
5% 8%
6% 4%
1.62 1.67 1.74 1.99 2.08
7.2 7.1
6.9
7.4 7.3
3Q11 4Q11 1Q12 2Q12 3Q12
206%
233%
203% 192%
182%
1.0% 1.0% 1.2%
1.4% 1.5%
3Q11 4Q11 1Q12 2Q12 3Q12
% Coverage ratio % Classified loans
HP : rapid growth with slight increase in NPL
Loans Loan Yield Portfolio Quality
KK - Phatra
HP portfolio breakdown
27
by location by class by car type
Portfolio characteristic
*Others includes vans and trucks.
*
Non-BKK 77%
BKK 23%
Used cars 48%
New cars 52%
Sedans 36%
1 ton pick-up vans
52%
Others 12%
by location by class by car type
KK - Phatra 28
% loan yield Baht in billion % Coverage ratio
% Classified loans %
Baht in billion Personal Loans Housing Loans Micro SMEs Loans
48% 49% 49% 50% 60%
25% 24% 24% 23% 9%
6.1 6.3 6.3 6.3
5.5
3Q11 4Q11 1Q12 2Q12 3Q12
20% 23% 26% 27%
31%
2% 0% 0%
-12%
0.18 0.19 0.19 0.19 0.19
12.0 12.1 11.9 12.0
13.1
3Q11 4Q11 1Q12 2Q12 3Q12
5.5% 6.2% 6.8% 7.2% 8.3%
51%
84%
72% 69%
57%
3Q11 4Q11 1Q12 2Q12 3Q12
Other Retail Loans : Steady stage
Trend and Outlook
Loans Loan Yield Portfolio Quality
Appendix – Wholesale Banking
KK - Phatra
RE: Yield jumping with better asset quality
30
% RE loan yield Baht in billion %
Highlights
Outlook
RE loan grew by 16.3%ytd from new
clients and provincial areas expansion
Loan yield jumped in 2Q12 from successful
restructured loan, dropped in 3Q12 from soft
loan scheme
Slightly asset quality deterioration from
restructured RE loan
Policy to manage and control credit quality
and reduce classified loans
Expect yield to continuously improve from
success in debt restructuring
Trend and Outlook
% Coverage ratio
% Classified loans
Thailand flooding in 2011 has affected
lower demand in real estate sector.
Baht in billion
16.5 16.9 17.7
19.0 19.6
3Q11 4Q11 1Q12 2Q12 3Q12
2% 5%
7% 3%
0.36 0.39 0.36
0.61
0.39
9.0 9.4 8.4
13.2
8.0
3Q11 4Q11 1Q12 2Q12 3Q12
28%
64% 65% 70%
64%
13.8% 11.6% 11.1% 10.1% 10.7%
3Q11 4Q11 1Q12 2Q12 3Q12
Loans Loan Yield Portfolio Quality
KK - Phatra 31
by location by class
Portfolio characteristic
Greater BKK 65%
South 22%
East 10%
Northeast 1%
Central 1% North
1%
SDH/TH 72%
Residential Condo 28%
by location by class
RE portfolio breakdown
KK - Phatra
SME: Beautifully growing business
32
Loans
% SME loan yield Baht in billion Baht in billion
% Coverage ratio % Classified loans
%
Highlight
Outlook
Portfolio continued to grow in all
segments.
Expect yield to remain high with better
asset quality once the SME sector steadily
grows upon the strong economy.
Interest income declined due to soft loan
program.
Change in NPL classification in 3Q11 for
Apartment lending. NPL was normally under
control but slightly increased from apartment
lending.
Cautious credit screening across portfolio
Trend and Outlook
Apartment Logistics
Floor Plan Printing & Packaging
SME clients who had been affected by
the flood were able to resume and .
44% 42% 40% 40% 38%
29% 30% 31% 30% 31%
19% 20% 20%
22% 23%
7% 8% 8%
8% 8%
13.0 13.6 14.7
16.3 17.6
3Q11 4Q11 1Q12 2Q12 3Q12
11%
5% 8%
8%
0.26 0.28 0.24
0.32 0.34
8.5 8.4
6.9
8.3 8.1
3Q11 4Q11 1Q12 2Q12 3Q12
43%
75% 79%
82%
70%
4.0% 3.6% 3.6% 3.6% 3.9%
3Q11 4Q11 1Q12 2Q12 3Q12
Loans Loan Yield Portfolio Quality
Appendix – SAM Business
KK - Phatra
SAM: KK’s cash cow business
34
Financial claim loans Foreclosed assets
Interest income from investment in loans Gain from NPA sale
Highlight Outlook
Asset declined from
every part of
business
Target to manage
down portfolio within
the next 2-3 years by
loan restructuring
and sales of
foreclosed asset
Interest income
swings depending on
negotiation and
success of litigation
process
Expect slow income
flow from both
interest income and
gain on NPA sales
Trend and Outlook
NPA sale target of
Baht 3.5 billion in
2012
-6.5% -17.5% Loan restructuring
was on progress
NPA total sale was
Baht 942 million in
3Q12 and Baht
2,181 million in
9M12
-11.8% -12.4%
Investment in loans
Interest income from Financial claim loans
13.5 11.8
2011 3Q12
Assets including RE
Baht in billion
Total assets
6.1 5.4 5.3 5.2 5.0
3Q11 4Q11 1Q12 2Q12 3Q12
42%
1.8 1.6 1.5 1.4 1.4
3Q11 4Q11 1Q12 2Q12 3Q12
12%
45%
7.0 6.5 6.2 5.9 5.4
3Q11 4Q11 1Q12 2Q12 3Q12
601
736
3Q11 3Q12
Income
Baht in million
Total income
7.6%
328 267
118
225
444
3Q11 4Q11 1Q12 2Q12 3Q12
240 188 159 164
258
3Q11 4Q11 1Q12 2Q12 3Q12
22.5%
2.1%
33 49 25 36 34
3Q11 4Q11 1Q12 2Q12 3Q12
5%
35.4%
60%
35%
KK - Phatra
SAM: foreclosed asset with significant value buffer
35
Highlight and
outlook
Financial claim loans
Assets
Sales (YTD)
Portfolio quality
Appraised value of foreclosed assets significantly higher
than book value; this is reconfirmed by the sales value
being consistently higher than book value of assets sold
NPL has been sliding downward; however, restructuring
loans has to be regulatory classified as loans.
Baht in billion
Baht in billion
Trend and Outlook (Cont’d)
*includes the value of NPA under Bangkok Capital Fund and Gamma Capital fund, in which KK purchased investment units of these two funds in 1Q10
% Coverage ratio % Classified loans
*
7.2 7.7 6.5 5.4
12.6 13.8 12.3
10.9
2009 2010 2011 3Q12
Book value
Appraised value
63%
50% 48% 48%
40%
48%
54%
46% 45%
25%
43%
41%
46%
45%
57% 55% 52% 51%
3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12
1.9 2.5 2.3
1.4
3.0
4.0
3.0 2.0
3.0 4.0
3.2 2.2
2009 2010 2011 3Q12
Book value
Appraised value
Sold Value
Foreclosed assets (including RE) Financial claim loans
9M12
9M12
KK - Phatra
Foreclosed assets* sold and appraised value
36
Baht in million
*Includes foreclosed assets from RE business
Trend and Outlook (Cont’d)
Year Assets sold Appraised value Sold/Appraised
2000 192 212 91%
2001 458 405 113%
2002 1,521 1,340 114%
2003 2,819 2,839 99%
2004 878 913 96%
2005 593 617 96%
2006 738 685 108%
2007 1,960 1,850 106%
2008 2,973 2,686 111%
2009 2,959 2,970 100%
2010 3,958 3,957 100%
2011 3,262 3,065 106%
9M12 2,181 1,961 111%
Total 24,491 23,499 104%
KK - Phatra
Foreclosed assets breakdown
Portfolio characteristic
37
by location by class
Greater BKK 60%
South 5%
East 5%
Northeast 3%
Central 16%
North 10%
Housing 32%
Lands 62%
Residential Condo
6%
by location by class
KK - Phatra
Investor Relations Kiatnakin-Phatra Financial Group
KIATNAKIN BANK PUBLIC COMPANY LIMITED
209/1, K Tower B, 31st Floor.,
Sukhumvit 21 (Asoke)
Klongtoey-nua, Wattana
Bangkok 10110
Tel. (662) 841-5925
Fax: (662) 841-5529
E-mail : investor_relations@kiatnakin.co.th
http://www.kiatnakin.co.th
Disclaimer: This presentation contains some information from other sources, KK and PHATRA cannot confirm, in all cases, the accuracy and completeness of
such data, particularly where the data sourced from outside the Group. In addition, any forward looking statements are subject to change as a result of market
conditions and the final result may be different to that indicated. The Bank makes no representation or warranty of any type whatsoever on the accuracy or
completion of the information contained herein.
38
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