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KASIKORNBANK at a GlanceEstablished on June 8, 1945 with registered capital of Bt5mn (USD 0.14mn)
Listed on the Stock Exchange of Thailand (SET) since 1976
Consolidated (as of December 2016)
Assets | Bt2,846bn (USD79.4bn) | Ranked #4 with 15.5% market share** |
Loans* | Bt1,698bn (USD47.4bn) | Ranked #4 with 14.9% market share** |
Deposits | Bt1,795bn (USD50.1bn) | Ranked #4 with 15.6% market share** |
CAR | 18.84% *** | |
ROE | 13.23% | |
ROA | 1.49% | |
Number of Branches | 1,107 | |
Number of ATMs | 8,973 | |
Number of Employees | 21,029 |
Share Information
SET Symbol Share Capital:
KBANK, KBANK-F
Authorized Bt30.5bn (USD0.9bn) Issued and Paid-up Bt23.9bn (USD0.7bn) Number of Shares 2.4bn shares
Market Capitalization Bt425bn (USD11.9bn) Ranked #2 in Thai banking sector 4Q16 Avg. Share Price:
KBANK Bt174.52 (USD4.87)
KBANK-F Bt174.72 (USD4.88)
EPS Bt16.79 (USD0.47)
BVPS Bt134.44 (USD3.75)
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) of 14 Thai commercial banks as of November 2016
*** 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 December 2016 (Mid Rate) was Bt35.83 per USD (Source: Bank of Thailand)
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Table of ContentsTopic Slide Page
Operating Environment 4 - 5
2016 Key Financial Ratios 6
2017 Financial Targets 7
Composition of Growth 8 - 11
The K-Strategy 12
Capital and Dividend 13 - 14
Summary 15
3
Operating Environment: Economic Outlook for 2017Key GDP Forecasts and Assumptions
Supporting Factors:
% YoY
6.0
3.0
0.0
2.8 3.3 3.0-3.6
% YoY
2015
2016F*
2017F*
Range
Base Case
GDP
2.8
3.3
3.0-3.6
3.3
Private Consumption
2.1
3.1
2.0-2.4
2.2
Government Consumption
2.2
1.0
3.0-3.4
3.2
Total Investment
4.7
3.0
3.0-5.0
4.4
- Public investment
29.8
10.3
6.5-10.5
8.5
- Private investment
-2.0
0.5
2.4-3.2
2.8
Gov't Budget Deficit (% of GDP)
-2.9
-2.9
-3.0 to -2.5
-2.7
Exports (Customs Basis)
-5.8
0.1
-0.5 to 2.5
0.8
Imports (Customs Basis)
-11.0
-4.6
0.2-4.5
2.0
Current Account (USD bn)
32.1
44.2
38.0 - 48.0
43.0
Headline Inflation
-0.9
0.2
1.3-2.3
1.8
Policy Interest Rate**
1.50
1.50
1.50
2015 2016F 2017F
Public spending and tourism sector remain key growth drivers of the Thai economy, although at a slower pace due to last year's high base of comparison
Export growth will turn slightly positive, attributable to a recovery in global commodity prices
Notes: The current MPC's policy rate is at 1.50% Source: * KResearch (as of December 21, 2016)
** KBank Capital Markets Research (as of December 6, 2016)
Challenges:
Trade protectionism of the US and other countries may negatively affect economic recovery and stability in the medium term
Risks could be incurred from Brexit implementation and fragility in Europe
Fed Funds rate hike will produce impacts on capital movements, asset prices and foreign exchange
China's economy may continue to slow down, but possibility of hard landing is limited
Purchasing power of the Thai household sector is limited by the persistent high household debt
4
Interest Rate OutlookThe Fed will likely raise its interest rate further by 0.25% in 2017
US Core PCE* Price Index
US Policy Interest Rate
% YoY
3
% Fed's Projected Appropriate
3 Policy Path
2
2
1 1
0
2012 2013 2014 2015 2016
0
2012 2013 2014 2015 2016 2017f 2018f 2019f
The BOT may keep its benchmark rate unchanged at 1.50% this year in order to support the overall economy, if inflation rate stays within its target range
Factors to watch: capital outflows, asset prices' correction, higher cost of funding, and a weaker Baht
Note: *PCE = Personal Consumption Expenditure
5
2016 Key Financial RatiosConsolidated
2015 Actual
2016 Actual
2016 Targets
Key Message
ROE
14.54%
13.23%
N/A
Lower than 2015 ROE and ROA, as a result of economic slowdown, which reflects in lower revenue growth and higher provisioning expenses
ROA
1.60%
1.49%
N/A
NIM
3.67%
3.52%
3.3 - 3.5%
Achieved high-end of 2016 target range attributed to well managed cost of fund, although yield dropped from the year 2015; in line with interest rates trend
Loan Growth
5.42% YoY
5.45% YoY
6 - 7%
Slightly lower than 2016 target range mainly due to SME and retail business; however, loan growth was still in line with economic growth
Non-Interest Income Growth*
12.57% YoY
1.96% YoY
Up to 10%
2016 non-interest income growth reflects large base effect; in line with the economic slowdown, especially in insurance business. However, non-interest income ratio maintained from previous year and in line with the target
Non-Interest Income Ratio
42.37%
41.54%
About 40%
Cost to Income Ratio**
45.19%
41.63%
45.0 - 47.0%
Improved from the year 2015 and better than 2016 target range due to cost management regime
Credit Cost (bps)
168 bps
204 bps
Up to 190 bps
Prudent credit cost. NPL ratio started to fall in 4Q16, although the NPL ratio was higher than in 2015; in line with slow economic recovery
NPL Ratio (Gross)***
2.70%
3.32%
3.5 - 3.6%
Note: * 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
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2017 Financial TargetsConsolidated
2016 Actual
2016 Targets
2017 Targets
Notes
ROE
13.23%
N/A
N/A
ROA
1.49%
N/A
N/A
NIM
3.52%
3.3-3.5%
3.3-3.5%
Ranking maintained among large commercial banks
Loan Growth
5.45% YoY
6-7%
4-6%
Decent and sustainable loan growth; in line with economic growth; subject to the success of government measures
Non-Interest Income Growth*
1.96% YoY
Up to 10%
Up to 5%
Sensible growth from fee-driven businesses, reflects large base effect; in line with the economy and uncertainty factors, e.g. national e-payment
Non-Interest Income Ratio
41.54%
About 40%
About 40%
Cost to Income Ratio**
41.63%
45.0 - 47.0%
Mid-40s
Focus on cost management under pressure from income slowdown
Credit Cost per year (bps)
204 bps
Up to 190 bps
200-225 bps
NPL ratio will start to fall in 4Q16; stabilize and move in a narrow range in 2017; credit cost will lag the NPL movement, and peak in 2017
NPL Ratio (Gross)***
3.32%
3.5-3.6%
3.3-3.4%
Note: * 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
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Composition of Growth: Loans by Business (9M16)Moderate loan growth momentum in line with full-year target
Consolidated | Amount (Bt bn) Dec15* 9M16 | 9M16 Loan Grow th (%YTD) | 9M16 Yield Range (%) | Loan Grow th Target (%) | ||
2016 | 2017 | |||||
Corporate Loans | 468 | 511 | 9.1% | 3-5% | 4-6% | 4-6% |
SME Loans | 618 | 642 | 3.9% | 6-8% | 5-7% | 4-6% |
Retail Loans | 422 | 420 | (0.6%) | 5-7% | 5-7% | 5-7% |
Other Loans | 102 | 99 | (2.4%) | |||
Total Loans | 1,610 | 1,672 | 3.8% | 5.8% | 6-7% | 4-6% |
Loan Portfolio Structure Loan Portfolio
Bt bn
2,000
1,600
1,327
1,439
1,527
1,610 1,672
29% 31%
Co rporate
1,200
31%
30%
31%
0 | 7% | 6% | 6% | 6% | 6% | Others |
2012 | 2013 | 2014 | 2015 | 9M16 | * December 2015 loan base is not comparable with previous reports, due to customer migration to larger segments and changes to comply with TFRS 8 |
800 | 36% | 36% | 37% | Re tail | |
400 | 26% | 27% | 27% | 26% | 25% |
38% 38%
SME
9M16 | 2017 Outlook | |
Corporate Loans |
|
|
SME Loans |
|
|
Retail Loans |
|
|
Loan Definition
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 Segments
Other 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 reports
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Kasikornbank pcl published this content on 18 January 2017 and is solely responsible for the information contained herein.
Distributed by Public, unedited and unaltered, on 18 January 2017 03:51:07 UTC.
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