KASIKORNBANK Financial Overview

K EXCELLENCE Currency and Interest Rate Outlook USD/THB: End Period ธนาคารกสิกรไทย 开泰银行 KASIKORNBANK Interest Rate Trend 4.00 3.25 2.75 2.50 B4 33.32 2.00 31.54 32 30.15 30.60 31.13 2.00 30.00 20 1.25 0-0.25 0-0.25 0-0.25 0-0.25 0-0.25 30 28 0.00 4Q09 4Q10 4Q11 4Q12 26-Jun-13 4Q13F USD/THB Dec-09 Dec-10 Fed Funds rate Dec-11 Dec-12 Dec-13F ■BOT's 1-Day Repurchase rate ■The Fed signals its plan to reduce asset purchases by end-2013 if the U.S. economy improves in line with its June forecasts. The strength of the U.S. economy remains in doubt, while the same level of monetary support should be maintained through 2013. The global economy shows further signs of weakness, while the U.S. government's finances and housing market recovery remain dependent on low interest rates which are products of the Q.E. measure The Thai Baht stays under depreciation pressure due to portfolio outflows and larger trade deficits. It is likely to be futile to "fight the Fed" or go against the market's risk aversion; the Baht looks oversold and is likely to rebound to 30.00 by year-end as the market reassesses the timing of the Q.E. exit Note: F is estimated by KBank Capital Markets Research (as of June 21, 2013) ■ On May 29th, the MPC decided to lower its policy rate by 25bps to 2.50% following a deceleration in Thailand's economic activities, as reflected in its 1Q13 GDP, and lower risks to inflation. Domestic demand growth slowed down significantly after several fiscal stimulus measures expired, while exports performed poorly due to weak external demand and the Baht's appreciation in 4M13 ■ We forecast that the MPC will maintain its 2.50% policy rate until year-end 2013 due to an expectation of positive GDP growth, albeit at a lower rate compared to expectations at the start of the year. Inflation is likely to remain low and stable while risk to growth rose due to the weaker outlook on Asia's economic growth. Recent volatility in the financial market may also pose risks to the global economy บริการทุกระดับประทับใจ K EXCELLENCE Impact of Baht Appreciation to Key Sectors Impacts/Support Reasons Highly Impacted Export-oriented, high use of local content, low competitiveness, price inelastic, and/or weaker overseas demand Decreased competitiveness Deteriorating demand in the US and Europe, but seeing benefit of lower cost of imports Diversified market, despite high use of local content Diversified market & lower costs of imports Sectors Garments, Musical and Sports Instruments, Canned and Processed Fruit & Seafood, Frozen Shrimp, and Processed Poultry Rice and Labor-Intensive Products, e.g., Shoes, Leather Products, and Furniture Computers and Parts, Electrical Appliances, Jewelry and Ornaments Rubber, Tapioca Products, Fresh and Frozen Fruit, Sugar, Rubber Products, and Tourism Vehicles and Parts, Iron and Steel Products, and Machinery Key Issues: ธนาคารกสิกรไทย 开泰银行 KASIKORNBANK ■ Export industries most affected are those with a high proportion of local content and low profit margin, including Footwear & Leather Products, Furniture, Textiles & Garments Less impacts are seen in high import- content industries, due to benefits from natural FX hedges Sensitivity of Baht to exports and GDP Baht Appreciation 1% Impact on exports - (0.6-1.1%) Impact on GDP - (0.1-0.3%) Less Impacted Domestic market-oriented and/or high import content Source: KResearch, information as of February 2013 Petrochemical and Petroleum Products, Construction Materials, Retail and Wholesale Trade, and Other Services Source: KResearch บริการทุกระดับประทับใจ 101 102

View entire presentation