Currency and Interest Rate Outlook

K KASIKORNTHAI Litigation Process Litigation process in Thailand takes about 2-3 years Litigation Process Under Negotiation ธนาคารกสิกรไทย 开泰银行 KASIKORNBANK Period Negotiate, await approval, document preparation & lawyer process Approximately 2 months Pre-court (Notice) Issue notice & court filing Approximately 2 months In Court Trial / wait for court ruling Execution Collect payment ruled by court or foreclose Public Auction Liquidation process บริการทุกระดับประทับใจ Approximately 9-18 months Approximately 3 months Approximately 6-9 months K KASIKORNTHAI TFRS9: Asset Class and Expected Credit Loss Stage 1: Perform New or good assets ธนาคารกสิกรไทย 开泰银行 KASIKORNBANK Asset Class (Defined by Incremental Risks: New definition of SICR and Modified Loans) Stage 2: Underperforming Assets with "> 30 Days Past Due" or higher credit risk than origination capturing via risk information eg. Credit scoring, PD change etc. Expected Credit Loss (ECL): PD x LGD x EAD Incorporate forward looking over lifetime Macro-factor is captured through PD point-in-time Stage 3: Non-performing Defaulted assets 59 Probability of Default (PD) Stage 1: Performing 1 Year Define relevant economic factors & scenario Stage 2: Under-performing Lifetime Stage 3: Non-performing Lifetime Loss Given Default (LGD) Exposure at Default (EAD) Incorporate through PD point-in-time ■ Term structure PD is derived over behavioral life Derive term structure PD & ECL by scenario Weight with probability for final ECL ■ Multi-scenario is weighted to come up with final Expected Credit Loss (ECL) Incorporate recovery from both collateral and cash payment Combination of drawn and undrawn as credit exposure ■ It is an accounting complication to treat drawn ECL as assets contra and undrawn ECL as liabilities, while to risk, both are "credit exposure" ■ Drawn is "outstanding amount + EIR adjustment"; Undrawn is "outstanding amount x conversion factor" "Drawn" Principal + Accrued Interest +EIR adjustment "Undrawn" Notional x CCF 1) Contingent products: LI, LC 2) Committed unused facilities CCF could be regulatory CCF or behavioral CCF Note: Significant Increase in Credit Risk (SICR) reflects higher risk than origination, but not yet bad quality; modified loans are loans with changing terms and conditions, either good or bad; thus, it can be at any stage Drawn Loan amount that customer has already drawn down, which is booked under loans to customers or part of "Interbank and money market items" Undrawn = Credit facilities that are not utilized yet or credit facilities that are utilized but are booked as contingent liabilities, excluding derivatives EIR = Effective Interest Rate; LI = Letter of Indemnity; LC = Letter of Credit; CCF = Conversion Credit Factor บริการทุกระดับประทับใจ 60 60

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