KBank Subsidiaries and ASEAN Economic Strategy

• 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 KBank Credit Cost Calculation Credit Cost Credit Cost = Provisioning Expense Average Loans Provisioning Expense = (Probability of Default (PD), Loss Given Default (LGD), Exposure at Default (EAD)) Provisioning expense largely depends on PD, which is driven by the stage of the economy ธนาคารกสิกรไทย 开泰银行 KASIKORNBANK Probability of Default (PD) Model Calibration ■High historical default rate in bad year higher provision in following year 1) Observe Historical Default Rates: Historical default rates over business cycle are observed 2) Calibrate PD Model The PDs are calibrated based on historical default rates 3) Apply PDs to Calculate Provisioning Expense Provisioning Expense = ƒ (PD, LGD, EAD) PD+= f (Historical Default Rates (DRT-1, DRT-2, ..., DRT-N), Other Factors) % Default Rates 239 bps 204bps 175bps 174bps % Credit Cost 2012 2013 2014 2015 2016 2017 2018 2019 2020F* * Credit cost in 2020F may reach or exceed the peak level in Y2017 Actual Default Rate (LHS) Forecast Default Rate (LHS) Credit Cost (RHS) บริการทุกระดับประทับใจ 56 55 55

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