KASIKORNBANK Strategic Acquisition

K KASIKORNTHAI ธนาคารกสิกรไทย 开泰银行 KASIKORNBANK Updates on the Deposit Protection Agency (DPA) DPA Objectives and Missions Enhanced understanding of the deposit protection scheme ■Close cooperation with related authorities to maintain stability of the financial institution system Establishment of an appropriate system for premium collection and sound management of the Deposit Protection Fund ■Development of an effective information system to ensure fairness of the deposit protection scheme, with accurate and rapid reimbursement ■Management according to Good Governance Principles and in compliance with international standards established by the International Association of Deposit Insurers Amount of Insured Deposits ■Insured deposits include deposits and accrued interest denominated in Thai Baht accounts, excluding non- resident Thai Baht accounts Blanket guarantee will be gradually phased-out to a limited coverage of Bt1mn per depositor per institution. Until 2011, Thai banks paid 0.40% per year of the daily average deposit amount (paid in June and December), excluding deposits in foreign currencies and deposits from financial institutions not insured by the DPA Since January 27, 2012, the contribution rate has increased from 0.40% to 0.47%, with 0.46% being the contribution to the FIDF, and 0.01% being paid to the DPA. The FIDF fee will temporarily reduce to 0.23% until the end of 2022* ■Royal Decree on an extension of deposit protection coverage was announced in the Royal Gazette on September 24, 2012 The Cabinet approved a one-year extension of deposit protection up to a maximum of Bt5mn. From August 11, 2021, the protection covers deposits up to Bt1mn. Deposit Accounts in Thailand (as of February 2022) Insured Deposit Under the amending the Deposit Protection Agency Act 11 August 2012-10 August 2015 Up to Bt50mn 11 August 2015-10 August 2016 Up to Bt25mn 11 August 2016 - 10 August 2018 11 August 2018 - 10 August 2019 11 August 2019 - 10 August 2021 11 August 2021, onwards Up to Bt15mn Up to Bt10mn Up to Bt5mn Up to Bt1mn Deposits # of Accounts % Amount (Bt mn) % Less than Bt1mn More than Bt1mn, but less than Bt10mn More than Bt10mn, but less than Bt25mn More than Bt25mn, but less than Bt50mn More than Bt50mn Total 112,759,352 98.36 3,366,338 1,726,161 1.51 4,236,673 21.73 27.35 99,729 0.09 1,478,418 9.55 29,695 0.03 1,035,957 6.69 24,231 0.02 5,370,755 34.68 114,639,168 100 15,488,141 100 Source: Deposit Protection Agency (DPA), the Bank of Thailand, KBank and KResearch บริการทุกระดับประทับใจ * According to the BOT announcement in the Royal Gazette, per the authority of the emergency decree dated April 7, 2020, financial institutions are required to pay 0.23% of the average deposit amount, B/Es, debt instrument (excluding the amount counted as capital), borrowings, and securities transactions under repurchase agreements, during January 2020 to December 2022 131 K KASIKORNTHAI Regulations Update Capital (Basel III) ธนาคารกสิกรไทย 开泰银行 KASIKORNBANK ■Pillar2: BOT revised Pillar2 regulation to enhance risk management and capital adequacy assessment as well as emphasize on ESG risk management. The revision become effective from 1 Jan 2022 onwards ■BCBS has finalized the new requirements on risk weighted asset (RWA) calculations including credit risk, operational risk, and CVA risk. The main objectives of the revision are to reduce variability in RWA across banks and jurisdictions and to balance simplicity and risk sensitivity of capital requirements Guidelines for supervision of financial groups of commercial banks related to digital asset business ■Remove the investment ceiling (3% of the capital of Thai banks) for FinTech business, as commercial banks have more experience investing in FinTech business, and regulators have guidelines to manage risks ■Allow subsidiaries of Thai banks to invest in companies related to Digital Assets (DA) business not greater than 3% of their capital, limiting new risks; DA companies having good governance, supervision of risks, and protection of customers are exempted from this investment ceiling Financial Sector Master Plan III (FSMP III) 22 Mar 2016: Cabinet approved FSMP III (2016-2020), with aims to establish strategic framework for continuous financial sector development and ensure challenges arising from the changing environment will be effectively managed ■Overall: FSMP III comprises four main initiatives: 1) Promote electronic financial and payment services as well as enhance efficiency of Thai financial system; 2) Support regional trade and investment linkage; 3) Promote financial access; and 4) Develop relevant infrastructure ■1Q17: BOT adopted the 'regulatory sandbox' which allowed regulatory flexibilities to be granted to financial institutions and FinTech companies to experiment with FinTech businesses with plans to grant a new license for P2P lending players or digital personal loan operators ■Mar-2022: BOT granted licenses for 9 digital personal loan operators ➤Impacts on Thai banks: Move toward further liberalization and digitalization, along with enhanced competition from FinTech and non-bank companies ➤Impacts on KBank: Ability to maintain competitiveness over both existing and new players, helped by an effective customer-centric strategy and preparation for a changing environment Thai and International Financial Reporting Standards (TFRSS / IFRSS) ■Year 2020 onwards: Timeframe was specified by Thailand Federation of Accounting Professions (TFAC); TFRS 9 (Financial Instruments) and TFRS 16 (Leases) became effective in 2020; TFRS 4 (Insurance Contracts) will be changed to TFRS 17 and will be tentatively effective in 2024. ➤ Expected impacts on Thai banks: For TFRS 9, expected credit loss is a significant issue due to economic uncertainty from COVID-19 outbreak and Thai systemic risk. For TFRS 17, it will be more transparent and easier to compare financial performance from insurance business. ➤ Expected impacts on KBank: For TFRS 9, Bank's expected credit loss is still based on prudence basis following both TFRS 9 and BOT guidelines. Impacts resulted from TFRS 17 is still under investigation. *Note: D-SIBS = Domestic Systemically Important Banks CVA Credit Valuation Adjustment, Source: The Bank of Thailand and KResearch บริการทุกระดับประทับใจ 132

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