Investor Presentaiton
Operating performance
Asset quality
Summary of 1H21 operating performance
2021 Targets
Loan
Growth
≤Flat
Actual 1H21
-2.5% YTD
Deposit
Growth
<Flat
-3.6% YTD
NIM
Non-NII
/Total Asset
Stable
(3.0% in 2020)
0.8%-0.9%
C/I Ratio
47%-49%
% Stage 3
< 3.6%
3.00%
(3.07%, excluded
PPA impact)
•
•
0.8%
•
46.6%
(45.3%, excluded
PPA impact)
2.89%
Credit cost
160-180 bps
161 bps
•
•
•
tub
As part of B/S optimization initiatives, TTB strategically shrink low yielding loans and high risk segment
with a plan to redeploy them in higher yielding assets. However, due to Covid-19, we have been more
selective on growing new loans. NII and yields would temporary be pressured but this is to ensure
portfolio quality and readiness to resume growth once the situation allows.
B/S optimization on the deposit side was well-executed. Post-merger deposit structure allowed TTB to
run down high cost deposit and replace with our flagship transactional and hybrid products, resulting in
improving cost of deposit. Funding volume was also optimized during slow loan growth environment.
As a result of B/S optimization and funding strategy, 1H21 NIM was fairly stabilized at around 3% level.
However, NII and NIM is expected to remain under pressure from economic and low rate environment.
In addition, the Bank also made adjustment on accounting estimates to be more conservative on EIR
recognition and to better reflect competition and payment behavior of customers.
Recurring retail fee was impacted by lower business activities amid rising Covid-19 cases and partial
lockdown. Commercial fee, on the other hand, showed an increase in Trade Finance and FX fees after
export/import activities started to resume.
Well-contained recurrent expenses in 1H21 reflected cost saving synergy realization which came mainly
from HR area, duplicate marketing expenses and branch rationalization. C/I ratio is expected to
accelerate in 2H21 due to the remaining EBT expenses together with additional HR expenses for
employees' health measures during Covid-19 outbreak.
The uptick in % stage 3 was mainly a combination of slow loan growth and a slowdown in NPL sales to
preserve NPL sale value while stage 3 outstanding was fairly flat as we continued to de-risk weak loans
(both stage 2 and 3 loans).
1H21 credit cost came at the lower bound of our guidance as in 2021 we already built up reserve
(THB24.8 bn) under the expectation of prolonged Covid-19 and slow economic recovery in 2021.
Current LLR ratio of 125% is sufficient and reflects our portfolio nature of retail and collateral base.View entire presentation