KASIKORNBANK Financial Overview

Tier 1 capital K EXCELLENCE Capital Definition Change (Consolidated) Tier 2 capital Tier 1 Basel II • Issued and paid-up share capital • • • • Premium on ordinary shares Legal reserve and Retained earnings • Minority interest, Preferred stock Hybrid Tier 1 (<15% of total Tier 1) Deduction of Tier 1 Goodwill, Treasury stock, Deferred tax asset Investment in insurance (50% Tier 1 and 50% Tier 2) Long-term subordinated debt . • • Hybrid Tier 1 (exceeds from Tier 1 limit) General Provision (reserve on 'Pass' loans and the excess allowance of required reserves) Surplus on AFS equity (45%) Surplus on land & premises (70% and 50%) 1 ธนาคารกสิกรไทย 开泰银行 KASIKORNBANK Basel III Common Equity Tier 1 • Issued and paid-up share capital • • Premium on ordinary shares Legal reserve and Retained earnings • 1 Other comprehensive income (OCI) e.g. surplus on AFS bond and equity (100%), surplus on land & premises (100%) Additional Tier 1 • • Hybrid Tier 1 with loss absorbency feature* Minority interest, Preferred stock* Deduction of Tier 1 • • 2 • 3 . Goodwill, Treasury stock*, Deferred tax asset Intangible assets (new item: gradually deduct CET1) Investment in insurance (Threshold Deduction) - Amount 10% of CET1, %RW = 250% (KBank's Case) - Amount > 10% of CET1, deduct CET1 Long-term sub-debt with loss absorbency feature** General Provision (reserve on 'Pass' loans and the excess allowance of required reserves) * Currently, KBank has no Hybrid Tier 1, Preferred Stock, or Treasury Stock ** Long-term subordinated debentures must have loss absorbency feature, if issued since 1 January 2013 บริการทุกระดับประทับใจ 85 K EXCELLENCE ธนาคารกสิกรไทย 开泰银行 KASIKORNBANK Financial Sector Master Plan (FSMP) Implementation Stages FSMP I (Y2004-2009) ■ Increase efficiency of the financial institutions system - 'One Presence' policy Expand scope of business: 'Universal Banking' New licenses for retail banks and foreign bank subsidiaries ■ Promote financial inclusion Strengthen financial institutions (Fls) by promoting voluntary mergers ■ Protect customers FSMP II (Y2010-2014) Looking forward to liberalization Reducing system-wide operating costs ■ Streamlining regulations ■Tackling remaining NPLs and NPAs (Allow banks to partner with private firms to work on raising attractiveness of NPAs, promote efficiency in the trading of NPLs and NPAs by establishing an NPA Information Center, and encourage write-offs of fully provisioned 'doubtful of loss' loans) Promoting competition and access to financial services ■ Promote competition - Encourage voluntary mergers to lower operating costs - Enhance the role of existing service providers (Liberalization of branch network, widen business scope, upgrade qualified retail banks to commercial banks, and expand branch network of foreign banks) - Introduce new entry to fill gaps and create value-added - Reduce government ownership in the commercial banking sector ■ Promote financial access - Facilitate bank expansion of business, as well as support Specialized Fls in focusing on providing services to the populations without access to banks - Introduce new service providers with microfinance expertise into the system Strengthening financial infrastructure (including market liberalization, increased access for foreign financial institutions via grants of licenses for some business areas, and permission for an increased number of branches and ATMs) ▪ Promote development of financial products that help support risk management ■ Enhance information system for risk management ▪ Push for draft/review of necessary financial laws to support risk management and an expedited resolutions to NPLs ■ Promote information technology utilization ■ Develop human resources in the financial sector Note: There are four types of Commercial banks in Thailand; Full service banks; Foreign bank branches; Retail banks; and Subsidiary Source: BOT and KResearch บริการทุกระดับประทับใจ FSMP III (Y2014 onwards) ■ Further development based on FSMP II results ■ Another feasibility study in light of empirical results 86

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