Financial Analysis Presentation
Operating performance
Asset quality
Summary of 9M21 operating performance
2021 Targets
Loan
Growth
≤Flat
Actual 9M21
-2.4% YTD
Deposit
Growth
<Flat
-3.5% YTD
NIM
Stable
(3.0% in 2020)
Non-NII
/Total Asset
0.8%-0.9%
2.98%
(3.06%, excluded
PPA impact)
0.77%
C/I Ratio
47%-49%
46.5%
(45.2%, excluded
PPA impact)
% Stage 3
< 3.6%
2.98%
Credit cost
160-180 bps
161 bps
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Under weaker-than-expected economic recovery throughout 9M21, loan growth has been more
selective than the original plan. We have continued de-risking weak loans to mitigate downside risks
and improve portfolio quality. This is to preserve and to ensure balance sheet healthiness for our future
growth once economic situation allows.
Balance sheets optimization on deposit side was well-executed. Post-merger deposit structure allows
TTB to run down high cost deposits and replace with flagship products, resulting in improving cost of
deposit. Funding volume was also optimized during slow loan growth environment in order to optimize
profitability margin.
NIM could maintain at 2.98% given the Bank's unique position from B/S optimization and funding
strategy which helped lessen the impact from yield compression and changing accounting estimates to
be more conservative on EIR recognition on mortgage portfolio.
• Non-NII to total asset lingered in the lower bound of our target, reflecting the impact of Covid-19
resurgence on fee income. Under this challenging times, TTB has tactically adjusted our sale approach
and product offerings. As result, 3Q21 retail fees could gradually recovered QoQ, despite the limitation
from partial lockdown. Key drivers were non-auto BA and MF fee.
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Despite integration activities, OPEX dropped YoY, as a result of cost discipline, cost saving initiatives
and partly from lower variable expenses from lower business volume. However, due to the lockdown,
some integration activities and related expenses i.e. rebranding and asset transfer were postponed to
4Q21, implying that C/I ratio in 4Q21 will remain at high-40s but not deviate from the guidance. In terms
of the Debt Collection Act, announced in September, we expected it to be an unfavorable factor for
operating expense.
The uptick in % stage 3 was mainly a combination of slow loan growth and a slight increase in stage 3
outstanding. The rise in stage 3 loans was from 2 main reasons: our intention to slowdown NPL sales to
preserve NPL value and our effort to de-risk weak loans (both stage 2 and 3 loans).
• 9M21 credit cost came at the lower bound of our guidance as we already built up reserve in 2020
(THB24.8 bn) under the expectation of prolonged Covid-19 and slow economic recovery in 2021.
Current LLR ratio of 121% is sufficient and reflects our portfolio nature of retail and collateral base.View entire presentation