Issuu on Google+


“I’m confident that KTB will always be with our business” Ms. Natira Boonsri General Manager - Special Project Central Department Store Limited


Trustworthy Secure

and Understanding

“What I have seen all along is that Krung Thai Bank is truly the Thai people’s bank because its major shareholder is the Thai government. This is reflected in the strong foundation and the stability of the bank. Moreover, Krung Thai Bank has developed itself in all aspects the new corporate identity and the branch outlook. I feel great when I’m in there, and there seem to be more branches now…. Even in our shopping center! Service standard has improved a lot too. There’s such a variety of products as we saw in the ads and those we can feel and touch. They really fulfill all the customer needs.

On business side, we have been well supported financially by Krung Thai Bank through out time. Whatever comes up, we can ask them for advice. Also the Bank always offers us new products like financial management service that really help our business to compete better. The Bank’s customer relations officer has great expertise, able to answer all that we need. In retaining the position of market leader, the key thing we must have is confidence. Support from Krung Thai Bank helps us build confidence. It gives us courage to move ahead and confidently compete with our business competitors”.




“I choose Krung Thai because

stable...

it is and love it because of its impressive services�

Annua l Report 2008 Krung Thai Bank Pcl.

Professor Emeritus Dr. Chotibun Purnaveja & Mrs. Payaw Purnaveja




Trustworthy Secure and Understanding

“I really love Krung Thai Bank simply because the Bank has taken good care of us since the start of our career until now that we have retired. In choosing to be a customer of which bank …. the first thing to consider is “Stability”. Krung Thai Bank is a stateowned commercial bank; hence we are very sure of its stability. If the Bank isn’t truly strong, it will never come up as a large bank at the forefront now. So, if the customers feel secure, it means that the Bank is really strong.

After having decided to bank with Krung Thai, we realized apart from stability, we can see the staff’s strong determination. When we walk into the Bank, we are so well taken care of. Bank officers arrange everything for us …. Whatever we need, they will manage everything because the Bank has all our information. Now we use investment service too. As we tell them about our needs, they know instantly how to manage, know which products would meet our requirements. There might be some obstacles, the Bank would tell us to be careful and find the best solution for us. The Bank’s reliable information also helps us to make right decisions. This makes us even more confident that the Bank’s recommendation is the best! So the whole family has become the Bank’s customers …. our children and grandchildren too. Our family will always choose to be with Krung Thai Bank”.




“Responding directly to the

Annua l Report 2008 Krung Thai Bank Pcl.

needs in mind� M.L. Nathasit Diskul Trade Officer (Professional Level) Department of Trade Negotiations, Ministry of Commerce




Trustworthy Secure and Understanding

“To me, choosing a bank for financial services, I will give first priority to credibility. Other things will be speed, convenience, comfort and ease. Now I’m using Krung Thai VISA Debit card because this one card serves as an ATM card for withdrawal, money transfer and buying goods, just like a credit card. Even when I’m on business trip abroad, I can still use this card conveniently. Importantly, the card has personal accident insurance coverage and gives me discount on goods I bought as well. Another service I often use is “KTB Online”. Wherever we are, we can do transactions with the Bank 24 hours. Whenever it comes to mind or in my free time, I can handle financial matters right away - no

need to go to the Bank or to an ATM. So it’s pretty fast, and importantly, safe and reliable. Krung Thai Bank has developed its products and services continuously, and often offers us new financial products. Most recently, their staffs presented me with KTB Pocket Banking service or banking on mobile phone. This service can be used with SIM card of all network systems. Like this, we can use it with the same old SIM and cell phone number. Quite interesting! I would say that this service will fulfill the needs of people in this generation. With this right service, I will use it for sure”.




Annua l Report 2008 Krung Thai Bank Pcl.

“We trust and confide in the Thai people’s Bank” 

Mr. Thanet Jindachotsiri President TJ Corporation


Trustworthy Secure and Understanding “TJ Corporation Group conducts several businesses mainly in factory construction, contracting installation, build and repair machinery, chemical production, agent of oil refineries and importer of iron, stainless steel and others. The Group has grown well until now partly because of financial support from Krung Thai Bank. At the beginning, the Bank contacted Sahapaisarn Industry factory in Samutsakorn. Since then, we have been using Krung Thai Bank’s services continuously. The Bank takes good care of our Group, making us feel their sincerity. I take this as an honor. TJ Corporation Group has had strong and stable foundation with steady growth and smooth operation all because of the support from Krung Thai Bank. Now our Group uses various services from Krung Thai Bank - deposits, loans and international business services”. It’s been 27 years since 1982 that the Group has remained loyal customer of Krung Thai Bank. Simply speaking, it’s like TJ Corporation Group has already married to Krung Thai Bank. Now

the Bank’s top executives and all staff members are very competent. They have strong intention to enhance the services further at all times. Their way of working is efficient and speedy enabling the client’s business to move forward actively, keeping pace with current happenings and bringing about cutting-edge to customer in competing with other companies. Krung Thai is truly the Thai people’s bank. That’s why we Thais have to help each other so that we all can develop ourselves further. This very concept has enabled Krung Thai Bank and the clients’ business to grow together. I need not say any thing much since Krung Thai Bank has given me the feeling of confidence and stability …. Just exactly what I have in mind. Take a look at TJ Corporation Group that is still a customer of Krung Thai Bank until today”.










CONTENTS

Annua l Report 2008 Krung Thai Bank Pcl.

Financial Highlights Message from the Chairman and the President Organization Chart Statement of Direction, Vision and Mission Board of Directors Executive Officers Brief Biography of Board of Directors and Executive Officers Business Environment Business Operation Shareholding and Management Structures Analysis of Operating Performance and Financial Standing Risk Factors and Risk Management Report of the Corporate Governance and Social and Environmental Responsibility Committee Report of the Nominating and Remuneration Committee Corporate Governance Report of the Audit Committee The Board of Directors’ Responsibility for Financial Reports Report of the Independent Certified Public Accountants Financial Statements General Information Executives Directory Banking Network Summary of Items in accordance with Form 56-2

10

Page 11 12 14 16 17 21 25 36 45 68 84 96 105 106 107 121 122 123 124 193 203 209 226


Financial Highlights Krung Thai Bank Consolidated 2008 2007 2006 2005 2004 2008 2007 2006 2005 2004 Financial Standing (million baht)

Loans 1,042,498 954,571 922,679 892,066 935,204 1,046,086 958,084 926,269 894,801 937,804 Bad Debts and Doubtful Accounts (including Revaluation Allowance for Debt Restructuring) 35,585 36,968 39,523 41,125 63,359 35,399 36,921 39,519 41,125 63,359 NPLs 85,448 96,164 89,692 97,635 119,693 85,188 96,084 89,692 97,635 119,693 Total Assets 1,330,376 1,212,722 1,204,828 1,162,748 1,148,903 1,327,184 1,211,330 1,204,717 1,162,796 1,149,417 Total Deposits 1,063,216 1,000,671 966,437 982,971 1,003,122 1,063,532 1,002,098 968,281 983,213 1,003,446 Total Liabilities 1,226,748 1,117,062 1,112,100 1,080,116 1,073,046 1,226,093 1,117,629 1,113,486 1,080,166 1,073,560 Total Shareholders’ Equity 103,628 95,660 92,729 82,631 75,857 101,091 93,701 91,231 82,630 75,856

Operating Performance (million baht) Interest and Dividend Income Interest Expense Net Interest and Dividend Income Non- Interest Income Non- Interest Expense Net Income (Loss)

Financial Ratios (%)

Return on Average Assets Return on Average Equity NPLs / Loans BIS Total Capital Ratio Book Value per Share (baht)

65,449 19,633 45,816 11,158 30,331 12,272

66,177 22,139 44,038 11,028 28,015 6,407

67,292 21,405 45,887 10,699 25,966 14,078

50,061 11,445 38,616 7,641 22,517 13,024

45,929 13,361 32,568 9,249 22,347 11,094

65,513 19,636 45,878 9,780 29,505 12,053

66,413 22,140 44,273 10,039 27,699 6,113

67,767 21,406 46,361 9,537 25,602 13,798

50,166 11,434 38,732 7,259 22,282 13,024

46,024 13,365 32,659 8,957 22,173 11,094

0.97 12.32 7.68 13.08 9.26

0.53 6.80 9.57 15.16 8.55

1.19 16.06 9.25 14.03 8.29

1.13 16.44 10.32 12.10 7.39

0.97 14.71 12.35 10.92 6.78

0.95 12.38 7.63 13.08 9.04

0.51 6.61 9.53 15.16 8.38

1.17 15.87 9.22 14.03 8.16

1.13 16.44 10.32 12.10 7.39

0.97 14.71 12.35 10.92 6.78

11


Annua l Report 2008 Krung Thai Bank Pcl.

12

Message from the Chairman and the President It is another year that the Bank enjoys high achievements despite unfavorable business environment. The Bank’s profit in 2008 almost doubled as a result of successful implementation in attaining the targets. Moreover, the Bank was able to adjust the strategic plan to be in consonance with the overturning economy from satisfactory growth in the first half-year to a slow down in the latter part. Hence, the overall operation including expansion of deposits and loans, profitability, asset quality and key financial ratios, all performed better than the prior year. Concerning overview of service providing in 2008, we continue to be the Convenience Bank aiming at offering excellent services to give customers optimum satisfaction and expedite building the Convenience Brand in their hearts. With this respect the Bank guarantees the service level agreement (SLA) to ensure service quality rendered by our branches nationwide, and to take lead in presenting new range of financial products to meet the needs of clients in respective segments. Distribution channel was also expanded to provide customers with more benefits, as returns and convenience, and at the same time brought in more fee-based income. On CSER operation the Bank progresses rapidly judging from the expansion of projects sponsored by us far and wide. Apart from recruiting more resources and restructuring the organization to boost operational efficiency and tracking of work, the Bank topped up respective projects and broadened its alliance network thus enabling the target groups to benefit more. Consequently, the Bank received high social recognition and appreciation as evidenced by the distinctive CSER Award 2008 from the State Enterprise Policy Office in addition to many other


awards such as the SOE Award for distinctive state enterprise Board of Directors, the Shareholder Award for distinctive registered company for shareholders care and the exemplary Corporate Governance Award. In operating business in 2009, we will use our best effort to turn the crises into opportunities albeit forthcoming difficulties that stem from global economic crisis including the Thai economy that is expected to slow down significantly. The Bank will utilize its strengths of being the largest state-owned commercial bank giving us high stability to create confidence among customers and general public and move forward with clear directions to expand business to the targeted clients, old and new. As for government and state enterprise clients, apart from expansion of credit to the lowrisk government agencies and state enterprise officers, the Bank will speed up the increase in non-interest income through our full-range of financial management services. The Bank will also join forces with government agencies in expediting the development of their application systems to link with those of the Bank. This will facilitate public servicing and taking us to our target of being a government convenience bank. Regarding private sector clients, the Bank keeps focusing on credit expansion together with increasing business volume through cross selling our own products and those of subsidiaries to supplement the clients’ business operation and giving them more alternatives for savings and investment. At the same time, we will attach special importance to close monitoring of our customers while taking more aggressive measures in preventing NPLs. Moreover, the Bank will take this unfavorable business environment as a good opportunity to reinforce its competitiveness through acceleration of technological development to accommodate future business expansion. The Bank will also continue to develop the staff competency in servicing clients and marketing new products as well as enhancing distribution channels to access customers at large. At the same time, the Bank will manage its spending for optimum efficiency while overseeing risk management under the principles of good corporate governance. With regard to CSER during the course of business operation, the Bank will continue to give importance to this issue as it is an integral and inseparable part of business operation. Not only overseeing that the Bank’s operation will not have negative impact on the society and the environment, the Bank will give full support to CSER projects for the ultimate benefits to the Thai youth and our society as a whole. We hereby convey our heartfelt thanks to all the valued shareholders and stakeholders in all segments for your continuous support, trust and confidence that have become the crucial parts in enabling us to achieve great success during the past year. It is our hope that we will continue to receive these valuable contributions as our supportive strengths in achieving our target of success amidst economic crisis, enabling us to jointly drive forward the national economic recovery policy at full force.

(Mr. Suparut Kawatkul) Chairman of the Board of Directors

(Mr. Apisak Tantivorawong) President

13


Annua l Report 2008 Krung Thai Bank Pcl.

Audit Committee

14

Internal Audit Group

Network Group

Business Center Group

Corporate Banking Group

Government & State Enterprise Relations Group

Products & Marketing Management Group

Credit Restructuring Group


ORGANIZATION CHART as at December 31, 2008 Board of Directors

Nominating & Remuneration Committee 

Board of Executive Directors 

The Corporate Governance and Social and Environmental Responsibility Committee

President

Financial Management Group

Operation Group

Risk Management & Compliance Group

Credit Risk Transaction Management Group

Asset & Legal Management Group

Human Resources & Corporate Governance Group


Annua l Report 2008 Krung Thai Bank Pcl.

Statement of Direction (SOD)

• Be a prominent commercial bank with sustainable returns, supporting public affairs • Provide competitive products and services • Be a leader in corporate governance and social responsibility

Vision

The Convenience Bank for Retail, Business, Government and Institution

Mission

Thailand’s leading financial institution providing excellent services, creating sustainable returns, promoting intellectual capital and adhering to good corporate governance 1616


Board of Directors 1. Mr. Suparut Kawatkul Chairman

17


Annua l Report 2008 Krung Thai Bank Pcl.

Board of Directors 5 3

2 4

2. Dr. Chaiyawat Wibulswasdi

Vice Chairman and Chairman of the Board of Executive Directors

3. Mr. Apisak Tantivorawong

4. Mr. Aswin Kongsiri

5. Dr. Jamlong Atikul

President and Executive Director

Director and Executive Director

Director and Executive Director

18


Board of Directors 7

6

8

6. Mr. Pachara Yutidhammadamrong

Chairman of the Audit Committee and Independent Director

Member of the Audit Committee and Independent Director

7. Mr. Visut Montrivat

8. Mr. Dusit Nontanakorn

Member of the Audit Committee and Independent Director

19


Annua l Report 2008 Krung Thai Bank Pcl.

Board of Directors 9 10 11 12 9. Mr. Santi Vilassakdanont

10. Mr. Sima Simananta

11. Mr. Suri Buakhom

12. Dr. Pichit Likitkijsomboon

Chairman of the Corporate Governance and Social and Environmental Responsibility Committee, Member of the Nominating and Remuneration Committee and Independent Director

Chairman of the Nominating and Remuneration Committee, Member of the Corporate Governance and Social and Environmental Responsibility Committee and Chairman of the Independent Director

Member of the Nominating and Remuneration Committee, Member of the Corporate Governance and Social and Environmental Responsibility Committee and Independent Director

20

Member of the Corporate Governance and Social and Environmental Responsibility Committee and Independent Director


Executive Officers 1. Mr. Apisak Tantivorawong President

21


Annua l Report 2008 Krung Thai Bank Pcl.

Executive Officers 4 8

3

7 5

3. Mr. Wanchai Thanittiraporn

Senior Executive Vice President - Managing Director Business Center Group

4. Ms. Kittiya Todhanakasem Senior Executive Vice President - Managing Director Financial Management Group 5. Ms. Nongnutch Thienpaitoon Senior Executive Vice President - Managing Director Network Group

7. Mr. Preecha Phukham Senior Executive Vice President - Managing Director Government & State Enterprise Relations Group

22

8. Ms. Sompis Charoenkiatikul Senior Executive Vice President - Managing Director Corporate Banking Group


Executive Officers 9 12 10 14 2 2. Dr. Pongsathorn Siriyodhin First Senior Executive Vice President - Managing Director Operation Group 9. Mr. Teerapol Pussadet

First Executive Vice President - Managing Director Credit Restructuring Group

10. Mr. Assanee Subvanich

12. Mr. Prasert Thiranakanat

First Executive Vice President - Managing Director Asset & Legal Management Group First Executive Vice President - Managing Director Credit Risk Transaction Management Group

14. Dr. Anuchit Anuchitanukul First Executive Vice President - Managing Director Products & Marketing Management Group

23


Annua l Report 2008 Krung Thai Bank Pcl.

Executive Officers 6

11 13

6. Ms. Sumana Vonggapan

Senior Executive Vice President - Managing Director Human Resources & Corporate Governance Group

11. Ms. Pannipa Apichatabutra First Executive Vice President - Managing Director Internal Audit Group 13. Ms. Patcharasiri Kiatkumjai First Executive Vice President - Managing Director Risk Management & Compliance Group

24


Brief Biography of Board of Directors and Executive Officers Board of Directors as at December 31, 2008

1. Mr. Suparut Kawatkul Other Position

Chairman Age 56 Education - MSc (Economics), Queen Mary College,

University of London, UK - BSc (Economics), London School of

Economics and Political Science, University of London, UK Training - Advanced Management Program, Harvard

University, USA - Double Taxation Program, University of

Southern California, USA - Class 72/2006 Director Certification Program

(DCP), Thai Institute of Directors Association

(IOD) Other Positions - Permanent Secretary, Ministry of Finance - Chairman, Government Pension Fund - Chairman, Student Loan Fund - Chairman, Office of Insurance Commission - Vice Chairman, Thai Airways International Pcl. - Director, Thai Asset Management Corporation - Director, Office of the Council of State Experience - Director-General, Revenue Department,

Ministry of Finance - Director, PTT Pcl. - Chairman, Erawan Hotel Pcl. - Chairman, Government Lottery Office 2. Dr. Chaiyawat Wibulswasdi Vice Chairman and Chairman of the Board of Executive Directors Age 62 Education - PhD (Economics), Massachusetts Institute of

Technology, USA - BA (Economics), Williams College, USA Training - Class 77/2006 Director Certification Program

(DCP), Thai Institute of Directors Association

(IOD)

- Director, National Economic and Social

Development Board Experience - Advisor to the Deputy Prime Minister, Minister of

Finance and Minister of Commerce - Vice Chairman, Securities and Exchange

Commission, Thailand - Member of the Audit Committee, CPPC Pcl.

3. Mr. Apisak Tantivorawong

President and Executive Director Age 55 Education - MBA (Industrial Management), University of

Tennessee, USA - BEng (Chemical Engineering), Chulalongkorn University Training - Class 18/2002 Director Certification Program

(DCP), Thai Institute of Directors Association

(IOD) Other Positions - Chairman, ASEAN Bankers Association - Chairman, the Thai Bankers’ Association - Director, the Board of Investment of Thailand - Director, Thai Asset Management Corporation - Independent Director, Indorama Polymers Pcl. - Independent Director, Thai Oil Pcl. Experience - President, Siam City Bank Pcl. - Independent Director and Member of Audit

Committee, Thai-German Ceramic Industry Pcl. 4. Mr. Aswin Kongsiri Director and Executive Director Age 63 Education - Class 6 National Defence Course for the Joint

State-Private Sectors, National Defence College - BA (Philosophy, Politics and Economics) (Hons),

Oxford University, UK

25


Ann ual Report 2008 Krung Thai Bank Pcl.

Training - Banff School of Advanced Management,

Alberta, Canada - Class 11/2001 Director Certification

Program (DCP), and Class 5/2000 Chairman Program, Thai Institute of

Directors Association (IOD) Other Positions - Chairman and Independent Director, Ch. Karnchang Pcl. - Chairman, AK. Place Co., Ltd. - Director and Chairman of Audit Committee,

OHTL. Pcl. - Independent Director and Member of

Nomination and Remuneration Committee,

Electricity Generating Pcl. - Independent Director, Member of Audit

Committee and Member of Nomination and

Remuneration Committee, Padaeng Industry Pcl. - Independent Director and Chairman of Risk

Management Committee, Bangkok Aviation

Fuel Services Pcl. - Independent Director and Member of Audit

Committee, Thai Reinsurance Pcl. - Director, Kompastra Co., Ltd. - Director, Ton Poh Emerging Thailand Fund - Director, ECR Property Ordinary Partnership - Chairman of Performance Evaluation Sub-

committee, Management 2: Risk Management - Member of Performance Agreement Sub-

committee, Ministry of Finance - Member of State Enterprise Performance

Evaluation Sub-committee, Management Experience - Member of the National Legislative Assembly,

Thailand - Director, Thai-German Ceramic Industry Pcl. - Director and Executive Director, Siam

Commercial Bank Pcl. - Director, Chairman of the Nominating and

Remuneration Committee, Member of Audit

Committee and Member of Risk Management

Committee, Muang Thai Life Assurance Co., Ltd. - Director and Member of the Audit Committee,

Thai Rating and Information Service Co., Ltd.

26

5. Dr. Jamlong Atikul

Director and Executive Director Age 60 Education - PhD (City & Regional Planning), Cornell

University, USA - MCom. (Economics), University of Auckland,

New Zealand - B.C.A. (Economics), Victoria University of

Wellington, New Zealand Training - Pacific Rim Executive Banker’s Program 1996 - Class 55/2006 Director Accreditation

Program (DAP), and Class 77/2006 Director

Certification Program (DCP), Thai Institute of

Directors Association (IOD) Other Positions - Chairman of External Examination and

Member of the Audit Committee, Assumption University - Director and Chairman of the Board of

Executive Director, Krungthai - AXA Life

Insurance Co., Ltd. - Director, RCL Pcl. - Honorary Director and Member of the Audit

Committee, Council of National Institute of

Development Administration Experience - President, Bank of Ayudhya Pcl. - Executive Director, the Thai Bankers’

Association - Director, Siam City Cement Pcl. 6. Mr. Pachara Yutidhammadamrong Chairman of the Audit Committee and Independent Director Age 61 Education - Honorary Degree of Doctor of Laws,

Ramkhamhaeng University - Class 399 National Defence Course for the Joint

State-Private Sectors, National Defence College - Class 21 Naval College - The Thai Bar, Institute of Legal Education of

The Thai Bar


- Barrister at Law, Thai Bar Association LL.B., Thammasat University Training - Class 53/2006 Director Accreditation

Program (DAP) and Class 22/2008 Audit

Committee Program (ACP), Thai Institute of

Directors Association (IOD) Other Positions - Director, Office of the Council of State - Sub-committee, Sukhumvit Asset

Management Co., Ltd. Experience - Attorney General, Office of the Attorney

General - Deputy Attorney General, Office of the

Attorney General - Member of the National Legislative

Assembly, Thailand - Director, Thai Airways International Pcl. - Director, IRPC Pcl. - Director, Provincial Electricity Authority 7. Mr. Visut Montrivat Member of the Audit Committee and Independent Director Age 62 Education - Class 38 National Defence Course for the

Joint State-Private Sectors, National Defence

College - MBA, Northern Illinois University, USA - BA, Chulalongkorn University Training - Class 12 Top Management Program, Office

of the Civil Service Commission - Class 77/2006 Director Certification Program

(DCP) and Class 15/2006 Audit Committee

Program (ACP), Thai Institute of Directors

Association (IOD) Other Positions - Director, Paiboon Insurance Co., Ltd. - Director, Thai Aviation Refuelling Co., Ltd. - Director, Compensation Fund - Member of the Audit Committee and

Independent Director, Bangkok Aviation Fuel

Services Pcl.

- Member of the Audit Sub-commission,

Highland Research and Development

Institute - Member of Performance Agreement

Sub-committee, Ministry of Finance - Member of Audit and Assessment of Public

Sector Sub-commission on Ministry Group of

Management, Security and Foreign Affair - Member of Civil Service Sub-commission on

Discipline and Dismissal Experience - Deputy Permanent Secretary, Ministry of

Finance - Director General, the Comptroller General’s

Department - Director General, the Treasury Department - Inspector General, Ministry of Finance - Director, Siam City Bank Pcl. - Executive Director, the Court of Justice

8. Mr. Dusit Nontanakorn

Member of the Audit Committee and Independent Director Age 61 Education - MBA (Marketing), University of California,

USA - MS (Structural Engineering), Ohio State

University, USA - BEng (Civil Engineering), Youngstown State

University, USA Training - Class 24/2000 Director Certification Program

(DCP), Class 7/2002 Chairman 2000

Program and Class 10/2005 Audit Committee

Program (ACP), Thai Institute of Directors

Association (IOD) Other Positions - Chairman, Independent Director and

Chairman of the Audit Committee, 124 Communications Pcl. - Chairman of the Audit Committee, Crown

Seal Pcl. - Chairman of Sub-committee National

Discovery Museum Institute

27


Ann ual Report 2008 Krung Thai Bank Pcl.

- Vice Chairman, the Thai Chamber of

Commerce - Director, the Krungthep Thanakom Co., Ltd. - Director and Audit Committee, Wiik &

Hoeglund Pcl. - Director and Audit Committee, Loxley Pcl. - Director, RCL Pcl. - Independent Director and Member of the

Audit Committee S&P Syndicate Pcl. - Member of Audit Committee, Siam Future

Development Pcl. - Director, Palang Sophon Limited - Director, Amata Corporation Pcl. - Member of Property Management Board, the

Thai Red Cross Society - Director, Highland Research and

Development Institute - Member of Performance Agreement Committee - Member of the Audit and Assessment

Committee, Ministry of Finance - Director, University of the Thai Chamber of

Commerce - Director, the Industrial Development

Foundation - Director, Thai Institute of Directors

Association - Director, Thailand Management Association - Director, Office of Insurance Commission - Member of Internal Audit Sub-committee,

Office of Thai Health Promotion Foundation - Advisor on the Management, the Siam

Cement Pcl. Experience - President, Cementhai Distribution Co., Ltd. - Director, State Railway of Thailand

9. Mr. Santi Vilassakdanont

28

Chairman of the Corporate Governance and Social and Environmental Responsibility Committee, Member of the Nominating and Remuneration Committee and Independent Director Age 58 Education - Class 355 National Defence Course for the

Joint State-Private Sectors, National

Defence College

- Honorary Degree of Doctor of Engineering in

Industrial Engineering, Ramkhamhaeng

University - Honorary Degree of Doctor of Philosophy in

Technology Management, Phranakhon

Rajabhat University - MM, Sasin Graduate Institute of Business

Administration of Chulalongkorn University - MA (Accounting), Chulalongkorn University - BA (Accounting and Management),

Chulalongkorn University Training - Class 3/2003 Director Accreditation Program

(DAP) and Class 6/2008 Role of the

Compensation Committee (RCC), Thai

Institute of Directors Association (IOD) - Class 7/2008 Top Management Program,

Capital Market Academy, The Stock

Exchange of Thailand - Class 1 Top Executive Program in

Commerce and Trade: TEPCOT, Commerce Academy, University of the Thai

Chamber of Commerce Other Positions - Chairman, the Federation of Thai Industries - President, Saha Pathana Inter-Holding Pcl. - Director, Thai Asset Management Corporation - Director, Chumporn Palm Oil Industry Pcl. - Independent Director, Sahacogen (Chonburi) Pcl. - Director, Sompo Japan Insurance (Thailand)

Co., Ltd. - Director, First United Industry Co., Ltd. - Director, Pitakkij Co., Ltd. - Director, Sahapat Properties Co., Ltd. - Director, International Curity Footwear Co., Ltd. - Director, Pan Land Co., Ltd. - Director, Treasure Hill Co., Ltd. - Director, Sinparadorn Co., Ltd. - Director, Pontex (Thailand) Co., Ltd. - Director, Thai Kamaya Co., Ltd. - Director, Thai Dairy Co., Ltd. - Director, Saha Pathana Real Estate Co., Ltd. - Director, Footwear Tech 1530 Co., Ltd. - Director, Inter Tech Co., Ltd. - Director, Eastern Thai Consulting 1992 Co., Ltd. - Director, Excellent Rubber Co., Ltd.


- Director, Nissin Foods (Thailand) Co., Ltd. - Director, Pan Rayong Co., Ltd. - Director, Pan Component Co., Ltd. - Director, Hiraiseimitsu (Thailand) Co., Ltd. - Director, Phimai Footwear Co., Ltd. - Director, Sriracha BSC Bowling Co., Ltd. - Director, Aphakorn Industries Co., Ltd. - Director, Pan Upper Co., Ltd. - Director, Kabin Patanakij Co., Ltd. - Director, Sriracha Aviation Co., Ltd. - Director, Thai Samsung Electronics Co., Ltd. - Director, Thai Arai Co., Ltd. - Director, Advantage Footwear Co., Ltd. - Director, Thai Sungshin New Materials Co., Ltd. - Director, Kabinburi Panasia Footwear Co., Ltd. - Director, Modern Technology Component

Co., Ltd. - Director, Thai Flying Maintenance Co., Ltd. Experience - Member of the National Legislative

Assembly, Thailand - Vice Chairman, the Federation of Thai

Industries - Vice Chairman, the Thai National Shippers’

Council - Director, Industrial Estate Authority of

Thailand - Director, Small and Medium Enterprise Development Bank of Thailand

10. Mr. Sima Simananta

Chairman of the Nominating and Remuneration Committee, Member of the Corporate Governance and Social and Environmental Responsibility Committee and Chairman of the Independent Directors Age 64 Education - Class 38 National Defence Course for the

Joint State-Private Sectors, National

Defence College - MS (Political Science), Utah State University,

USA - BS (Political Science), Chulalongkorn

University

Training - Certificate of Public Law, Thammasat

University - Class 14/2001 Director Certification Program

(DCP), Class 28/2006 Finance for Non-

Finance Director and Class 6/2008 Role of

the Compensation Committee (RCC), Thai

Institute of Directors Association (IOD) - Class 6/2008 Top Executive Program,

Capital Market Academy, The Stock

Exchange of Thailand - Leadership, Culture and the Modern

Workplace Program, King Mongkut’s University of Technology Thonburi Other Positions - Chairman of the Audit and Assessment of

Effectiveness of Public Service Committee,

Ministry of Tourism and Sports - Chairman, Foundation of Effective Development on Public Service - Director, Office of the Civil Service Commission - Director, Dhipaya Insurance Pcl. - Director, Directorate of Public Administration

Law 2, Office of the Council of State - Director, Royal Thai Police Committee - Director, Office of the Decentralization to local

Government Organization Committee - Member, Dhurakij Pundit University Council - Director, Institute for Management Education

for Thailand Foundation - Director, Colonel Jinda Na Songkla Foundation - Director, Foundation for a Clean and

Transparent Thailand - Member of Royal Thai Police Sub-committee

on Ethics Promotion and Merit Development - Member of Public Sector Development Sub-

commission on Promotion and Development

of Regional and Local Public Service System - Senior Advisor on Innovative Administration

Consultancy Institute Experience - Secretary General, Office of the Civil Service

Commission

29


Ann ual Report 2008 Krung Thai Bank Pcl.

- Advisor on the Ministry of Foreign Affairs - Advisor on Government Pension Fund 11. Mr. Suri Buakhom Member of the Nominating and Remuneration Committee, Member of the Corporate Governance and Social and Environmental Responsibility Committee and Independent Director Age 64 Education - MBA, Thammasat University - BA (Economics), Kasetsart University Training - Diploma (Technology), Harvard University, USA - Training in Strategic Alliance, the Wharton

School, University of Pennsylvania, USA - Intelligence Organization, UCLA, USA - Computer Technology, Asia Electronic

University - Certificate of Developing, Corporate Governance Policy 20/09/2005, Class 28/2006 Finance for Non-Finance Director, Class 50/2006 Director Accreditation Program (DAP), Class 70/2006 Director Certification Program (DCP) and Class 6/2008 Role of the Compensation Committee (RCC), Thai Institute of Directors Association (IOD) Other Positions - Chairman, Krung Thai Computer Services

Co., Ltd. - Vice Chairman, Krungthai Panich Insurance

Co., Ltd. - Director, Government Information

Technology Services

30

- Advisor on Online Computer System, Revenue Department and Comptroller

General’s Department, Ministry of Finance - Advisor on e-Government, Ministry of Information and Communication Technology Experience - Office Director, Revenue Department - Deputy Director-General, Revenue Department - Advisor on Tax Base Development,

Revenue Department

12. Dr. Pichit Likitkijsomboon

Member of the Corporate Governance and Social and Environmental Responsibility Committee and Independent Director Age 52 Education - PhD (Political Economics), Cambridge University, UK - MA (Economics), Cambridge University, UK - MA (Economics), Thammasat University - BA in Political Science (Sociology), Chulalongkorn University Training - Class 107/2008 Director Certification Program (DCP), Thai Institute of Directors Association (IOD) Other Position - Associate Professor at the Faculty of Economics, Thammasat University Experience - Research Manager, Tarasiam Business

Information Co.,Ltd. - Assistant Professor at the Faculty of

Economics, Thammasat University


Executive Officers as at January 31, 2009

1. Mr. Apisak Tantivorawong Training President - Please refer to page 25

2. Dr. Pongsathorn Siriyodhin

First Senior Executive Vice President -

Managing Director Operation Group Age 58 Education - PhD (Economics), University of Cincinnati, USA - MA (Economics), California State University,

USA - BA (Economics), California State University,

USA Training - Class 78/2006 Director Certification Program

(DCP), Thai Institute of Directors Association

(IOD) - Class 7/2008 Leadership Program, Capital

Market Academy, The Stock Exchange of

Thailand Other Positions - Chairman, Krungthai Card Pcl. - Director, Trinity Watthana Pcl. - Director, Nok Airlines Co., Ltd. Experience - First Senior Executive Vice President,

Business Support Group; Banking Operation

Group & Finance Group, Krung Thai Bank Pcl. - Chairman, Krung Thai Legal Services Co., Ltd. - Director, Krungthai - AXA Life Insurance Co., Ltd. - Director and Member of the Audit Committee, The Industrial Finance Corporation of Thailand (IFCT) 3. Mr. Wanchai Thanittiraporn Senior Executive Vice President - Managing Director Business Center Group Age 60 Education - MS (Economics Development), National

Institute of Development Administration - BCom, Chulalongkorn University - BAcc, Chulalongkorn University

- Class 3/2006 Capital Market Academy, Leadership Program, The Stock Exchange of

Thailand - Advanced Executive Program, J.L. Kellogg

Graduate School of Management,

Northwestern University, USA - 1995 International Bankers Program,

San Francisco, USA Other Positions - Director, Krungthai Panich Insurance Co., Ltd. - Director, Krungthai - AXA Life Insurance Co., Ltd. Experience - Senior Executive Vice President, Central

Region & Bangkok Metropolis Group; Bangkok Metropolis, Central & Eastern Region Group, Krung Thai Bank Pcl. 4. Ms. Kittiya Todhanakasem Senior Executive Vice President - Managing Director Financial Management Group Age 50 Education - MBA, University of Illinois, Champaign-Urbana,

USA - BBA (Accounting) (Honors), Thammasat

University Training - Class 76/2006 Director Certification Program

(DCP), Thai Institute of Directors Association

(IOD) Other Positions - Director, Krungthai Card Pcl. - Director, Krungthai Panich Insurance Co., Ltd. Experience - Senior Executive Vice President, Risk

Management Group, Krung Thai Bank Pcl.

31


5. Ms. Nongnutch Thienpaitoon Training

Ann ual Report 2008 Krung Thai Bank Pcl.

Senior Executive Vice President - Managing Director Network Group Age 58 Education - MBA (Honors), Roosevelt University, Illinois,

USA - BA (Accounting) (Honors), Chulalongkorn

University Training - Class 41/2005 Director Accreditation

Program (DAP), Thai Institute of Directors

Association (IOD) - The Job of the Chief Financial Officer,

New York University & Singapore Institute of

Management - Senior Executive Program, SASIN - Credit / Risk Management Program, Citibank

Singapore Other Positions - Director, TPT Petrochemicals Pcl. & TPT Utilities Co., Ltd - Director, Bangkok Metro Pcl. - Director, Advance Agro Pcl. - Bancassurance Working Group, Krungthai - AXA Life Insurance Co., Ltd. Experience - Senior Executive Vice President, Coporate

Banking Group; Credit Risk Transaction

Management Group / First Executive Vice

President, Coporate Banking Group; Eastern

Region & Bangkok Metropolis Group /

Executive Vice President, Corporate Sector,

Bangkok Metropolis & Southern Region

Group, Krung Thai Bank Pcl.

32

- Strategic Human Resource Management

Program, Graduate School of Business

Administration, Harvard University, USA - Class 47/2005 Director Accreditation

Program (DAP), Thai Institute of Directors

Association (IOD) - Executive Teamwork Development Program - Management Problem Solving and Decision

Making Program - Advanced Management Program Other Positions - Secretary to the Nominating and

Remuneration Committee, Krung Thai Bank Pcl. - Chairman, Nominating Committee, Krung

Thai General Business Services Co., Ltd. - Director, Krung Thai General Business Services Co., Ltd. Experience - Senior Executive Vice President, Human

Resources and Organization Management

Group / First Executive Vice President,

Human Resources and Organization

Management Group; Human Resources and

Corporate Support Group, Krung Thai Bank Pcl.

7. Mr. Preecha Phukham

Senior Executive Vice President - Managing Director Government & State Enterprise Relations Group Age 60 Education - MBA, National Institute of Development

Administration - BA (Economics), Thammasat University Training 6. Ms. Sumana Vonggapan - Advanced Management Program Senior Executive Vice President - Managing Director - People System in Action Program - Merger & Acquisition Advisors Program Human Resources & Corporate Governance Group - Dishonesty, Misconduct, Malfeasance

Age 58 Education Corruption Program - Class 10 Politics and Governance in

- MBA, Southeastern Oklahoma State

Democratic Systems for Executives Program University, USA - Class 17/2007 Role of the Chairman

- BA (Communication Arts) (Honors),

Program, Thai Institute of Directors

Chulalongkorn University Association (IOD)


Other Positions - Chairman, KTB Leasing Co., Ltd. - Director, Krung Thai Asset Management Pcl. - Vice Chairman, Amateur Boxing Association

of Thailand under the Royal Patronage of

His Majesty the King Experience - First Executive Vice President, Government & State Enterprise Relations Group; Lower

Southern Region & Bangkok Metropolis

Group / Executive Vice President,

Northeastern Region & Northern Bangkok

Metropolis Group; Small & Medium Business

Sector, Northern & Northeastern Region

Group, Krung Thai Bank Pcl. 8. Ms. Sompis Charoenkiatikul Senior Executive Vice President - Managing Director Corporate Banking Group Age 55 Education - Master of Professional Accounting Program,

Thammasat University - BBA (Accounting) (cumlaude), Thammasat

University Training - Class 13/2004 Financial Executive

Development Program (FINEX XIII), The Thai Institute of Banking and Finance

Association Other Positions - Director, Krung Thai IBJ Leasing Co., Ltd. - Director, Thai Nam Plastic Pcl. - Director, Kaset Thai Sugar Co., Ltd. - Director, Thai Identity Sugar Factory Co., Ltd. Experience - First Executive Vice President, Corporate

Banking Group / Executive Vice President,

Corporate Banking Sector 1, Corporate

Banking Group; Industrial Financing

Department, Eastern Region & Bangkok

Metropolis Group / Senior Vice President,

Industrial Financing Department, Eastern Region & Bangkok Metropolis Group Bangkok

Metropolis & Southern Region Group, Krung Thai Bank Pcl.

9. Mr. Teerapol Pussadet

First Executive Vice President - Managing Director Credit Restructuring Group Age 58 Education - MBA, University of Detroit, USA - BA (Accounting), Kasetsart University Training - International Banking Program - Financial Management Program - Project Management for Local Development - Corporate Finance & Merchant Banking

Seminar, Citibank USA - Senior Executive Program (SEP), SASIN - Pacific Rim Bankers Program, USA - Modern Management Strategy for KTB Executives Program - Advanced Management Program Other Position - Advisor to the Board of Executive Directors,

Dhipaya Insurance Pcl. Experience - Executive Vice President, Business Center

CRTM Sector, Credit Risk Transaction

Management Group; Products & Marketing Sector, Product Management & Special

Projects Group, Krung Thai Bank Pcl.

10. Mr. Assanee Subvanich

First Executive Vice President - Managing Director Asset & Legal Management Group Age 59 Education - MBA, Kasetsart University - Barrister at Law, Institute of Legal Education of

the Thai Bar Association - BA (Law) (Honors), Thammasat University Training - Professional NPA Selling Program - Advanced Management Program - Design Microfinance Program - Management Problem Solving and Decision Making Program - Technique of Professional Real Estate Selling Program

33


Ann ual Report 2008 Krung Thai Bank Pcl.

- Technique of Supreme Business Negotiation Program - Retail Finance & Cards and Payment Program - Marketing Director Development Program,

Thammasat University Other Position - Director and Executive Director, KTB Securities Co., Ltd. Experience - Executive Vice President, Retail Products

Management and Marketing Promotion

Sector, Products & Marketing Management

Group; Legal Management Sector and Asset

Management Sector, Asset and Legal Management Group; Legal Administration

Sector and Properties Management Sector,

Substandard Debts Management Group, Krung Thai Bank Pcl. 11. Ms. Pannipa Apichatabutra First Executive Vice President - Managing Director Internal Audit Group Age 53 Education - MBA, Ohio University, USA - BBA (Accounting), Chulalongkorn University Training - Class 28/2008 Company Secretary Program

(CSP), Thai Institute of Directors Association

(IOD) - Internal Audit Quality Assessment Program, The Institute of Internal Auditors of Thailand

(IIAT) - Class 2/2006 Executive Program for Senior

Management (EX-PSM2), The Fiscal Policy

Research Institute Foundation (FPRI) Other Position - Secretary of the Audit Committee, Krung

Thai Bank Pcl. Experience - Executive Vice President, Treasury & Capital

Market Sector, Financial Management

Group; Financial Market and Institutions

Sector, International Business and Financial

Markets Group, Krung Thai Bank Pcl.

34

12. Mr. Prasert Thiranakanat First Executive Vice President - Managing Director Credit Risk Transaction Management Group Age 58 Education - MBA, Kasetsart University - BA (Economics), Thammasat University Training - Class 1/2007 Management Administration Public - Private - Class 6/2005 Audit Committee Program (ACP) and Class 15/2004 Director Accreditation

Program (DAP),Thai Institute of Directors

Association (IOD) - Management Problem Solving and Decision

Making Program - Class 8/1994 Senior Executive Program (SEP),

SASIN Other Positions - Chairman of KTB Provident Fund - Director, Krung Thai IBJ Leasing Co., Ltd. Experience - Executive Vice President, Corporate CRTM

Sector, Credit Risk Transaction Management

Group / Executive Vice President; Senior Vice

President, Industrial Financing Analysis

Department, Corporate Banking Group,

Krung Thai Bank Pcl. 13. Ms. Patcharasiri Kiatkumjai First Executive Vice President - Managing Director Risk Management & Compliance Group Age 57 Education - MS, National Institute of Development

Administration - BSc., Chulalongkorn University Training - Senior Administrators Program (SAP) 2005,

SASIN - Creating a Value Based Organization 2005, SASIN - CFO State Enterprise 2006


- Value Based Management 2007, Mahidol

14. Dr. Anuchit Anuchitanukul University First Executive Vice President - Managing Director - Class 84/2007 Director Certification Program Products & Marketing Management Group (DCP), Thai Institute of Directors Association Age 38 (IOD) Education - The Role of Banking and Banking - PhD (Computer Science), Stanford University, USA Supervision in Financial Stability 2008, - MSCS (Computer Science), Stanford University, USA People’s Bank of China - MBA, Chulalongkorn University - TLCA Annual Risk Management Conference - BEng (Computer Engineering) (1st Class

2009, Thai Listed Companies Association Honors), Chulalongkorn University Other Positions Training - Secretary to the Board of Directors, Krung

- Class 93/2007 Director Certification Program

Thai Bank Pcl. (DCP), Thai Institute of Directors Association (IOD) - Corporate Secretary, Krung Thai Bank Pcl. - Class 4/2008 Executive Program for Senior - Director, Krung Thai Computer Services Management, the Fiscal Policy Research Co., Ltd. Institute Foundation (FPRI) - Director, Thai Listed Companies Association Other Position Experience - Director, Krung Thai Computer Services Co., Ltd. - Executive Vice President, Financial Planning Experience Sector, Financial Management Group /

- Executive Vice President, Cash Management

Executive Vice President / Senior Vice Sector, Operation Group / First Vice President,

President / First Vice President, Planning & Corporate Cash Management Department, Budgeting Department, Krung Thai Bank Pcl. Operation Group, Krung Thai Bank Pcl.

35


Business Environment

2008 Economic Overview and Outlook for 2009 Ann ual Report 2008 Krung Thai Bank Pcl.

The Economy in 2008

The World Economy: Sub-prime Economic Nightmares

36

The world economy in 2008 grew only 3.4 percent, slowing down significantly from 5.2 percent in 2007 due to the financial crisis originating from the US sub-prime problem that evolved into economic crisis effecting worldwide. When financial activities and international trading felt the impacts, the real sector, employment and household income greatly slackened. Several countries were thus confronted with economic recession. Meanwhile, inflation that tended to be severe in the first half of the year rapidly abated in the second half as oil prices slump following sharp decline in demand. All these enabled central banks of respective countries to fully implement their monetary and fiscal policies to resolve the confronting economic crisis. The economies of major leading countries in 2008 can be summarized as follows: • United States of America During the first half of the year, the US economy still grew well following exports that benefited from the weakening US dollar, enabling GDP to expand as high as 2.3 percent. However, the sub-prime problem that simmered since 2007 erupted in the latter half of 2008. Consequently several US leading financial

institutions went bankrupt or needed official bail-out following losses from substandard lending and investment in instruments related to sub-prime market. Hence, the manufacturing sector, already impacted by declining demand, was further exacerbated by credit crunch resulting in heavy business closedown and labor lay-off. The US unemployment rate rose sharply from 4.9 percent in early part of the year to 7.2 percent in late 2008 despite enormous liquidity injection by the US Federal Reserve and record-low Fed Funds rate cut from 4.25 percent in early 2008 to merely 0-0.25 percent in late 2008. At the same time, the US government launched an economic stimulation plan of USD 770 billion but GDP in the latter half of the year grew only 0.3 percent, resulting in a mere 1.3 percent economic growth in 2008, down from 2.0 percent in 2007. • Europe The economy of the EU countries in 2008 grew 1.2 percent, slackening from 2.6 percent in the prior year after encountering export pressure in consequence to the strong euro and soaring inflation that exceeded the target of the European Central Bank (ECB). Furthermore, the economy suffered both direct and indirect impacts from the US sub-prime problem resulting in severe losses for many


financial institutions. The ECB thus had to urgently take bail-out measures including liquidity injection, deposit assurance, capital increase, emergency loans and nationalization of businesses, but still unable to avoid the impact on the manufacturing sector. As a result, the European economy entered recession for the first time since its inception in 1999 with GDP in the second and third quarters shrinking. Hence, the ECB in late 2008 had to cut interest rate down by 1.75 percent, from 4.25 percent to 2.50 percent and in addition announcing its economic stimulation plan worth over 200 billion euro. • Japan This is another country adversely affected by the sub-prime problem. During the first half of the year, GDP grew slightly at 1.1 percent as exports to China and Asia were still able to compensate the shrinking export to the United States and Europe. However, in the latter half the impact from sub-prime problem became more intense. Financial system was so tight that the Bank of Japan (BOJ) had to inject cash into the system continuously and cut interest rate down totaling 0.40 percent, from 0.50 percent to 0.10 percent. But because of the internal political clashes, the parliament rejected the government’s proposed economic recovery plan, and so the problem was not fully remedied. Both consumers and investors confidence slumped further resulting in GDP declining 2.4 percent in the second half of the year. In 2008, Japanese economy thus grew

only 0.7 percent slackening from 2.4 percent in the prior year. • China The Chinese economy grew 9.0 percent, slowing down from 13.0 percent in the previous year due to the severe earthquake in mid-2008 and the everexpanding export shrank for the first time at the end of the year following the global economic slowdown. The Chinese authorities had to put great effort, cutting down interest rates on loan and deposits for the first time in four years totaling 2.16 percent and 1.89 percent respectively. Commercial bank legal reserve was cut to 14.0 percent from a high of 17.50 percent after successive boosts to slow down the heated economy. Other measures included intervention to weaken the much stronger Yuan once again and launching economic stimulation plan worth Yuan 4.0 trillion to prop up the economy to grow not lesser than 8.0 percent. China would be the key country in bailing out the current global economic crisis since its economy had grown heatedly for several years in a row becoming the world’s third biggest economy after the United States and Japan while retaining the world’s largest international reserves of nearly USD 2.0 trillion.

The Thai Economy: Year of Uncertainties

Having encountered difficulties in many aspects the Thai economy in 2008 grew only 2.6 percent, down from 4.9 percent in the prior year despite growth of as much as 5.7 percent in the first half of the year when exports hit record-high several times. Domestic spending and investment also expanded well even though inflation surged up frightfully from the continuous rise in oil prices in continuation from 2007. However in the latter part of the year, the situation changed when signs of global economic slowdown caused by the US sub-prime problem became clearer thus resulting in

37


Ann ual Report 2008 Krung Thai Bank Pcl.

38

further slackening of the export sector. At the same time, the economy was further impacted by the increasingly severe internal political situation that led to the closures of the two main airports, seriously shattering the confidence of foreign investors and tourists to Thailand. As a result, the Thai economy slackened faster and in larger magnitude than expected. Major issues in 2008 were summarized below: Export grew 16.8 percent against 17.3 percent in 2007. In the first half of the year, export expanded as high as 26.4 percent since it was able to hit new high three times in May, June and July, resulting in industrial product growth of 11.4 percent with average production capacity usage of 73.1 percent. Nevertheless, during the last quarter of the year, export reversed its direction to continuous slowdown following the world economy and economies of Thailand’s major export markets such as the United States, Europe and Japan, that were adversely affected by the US financial crisis especially in November and December during which export contracted 17.7 percent and 15.7 percent respectively. Oil prices surged up continuously from 2007 reaching the highest level at USD 140.63/barrel (Dubai market) in July, causing retail petrol prices of all types to escalate accordingly. Benzene 95, in particular, sky rocketed to a record high of

Baht 44.79/litre pulling up headline inflation rate in July to 9.2 percent, highest record in over a decade. This had impact on cost of production and transportation including household consumption. However, in the second half year, oil prices reversed in direction dumping to the lowest in over three years upon much declining world demand, to hit the lowest record in four years at USD 36.27/barrel in December. The average 2008 Dubai crude oil price stood at USD 93.53/barrel compared to average USD 68.22/barrel in 2007. Agricultural product prices in the first nine months increased from those in the same period of prior year by as high as 24.4 percent following shortage of supply in global markets, enabling Thai farmers to earn 44.6 percent more income which was a factor causing domestic consumption in the same period to expand satisfactorily. However, in the last quarter of 2008, agricultural product prices slumped greatly. On average, agricultural product prices increased from previous year by 22.0 percent and average farmers income rose by 34.0 percent. Thai political situation was highly unstable and a factor that wore away the confidence of businessmen and investors throughout the year. In 2008, Thailand saw as many as four Prime Ministers in office while political conflicts grew more severely with losses of life and property as well as the good image of the country when the demanding rallies escalated to the point of closing down Suvarnabhumi Airport and Donmuang Airport in late November. After having a new government with change of core parties, general situation improved but uncertainty still persists.

Economy Outlook for 2009

World Economy: Slim Down for the First Time in 50 Years

World economy in 2009 is anticipated to shrink by 0.4 percent, the first time in almost


50 years from the start of record keeping in 1960, because the economies worldwide are slowing down following major industrial countries. It is expected to hit the bottom in the third quarter of 2009. However, all this depends on the effectiveness of the economic stimulation measures taken by each country, those already launched and those to be issued, especially the measures issued by the leading country like the United States under the administration of the new President Barack Obama. There are still many risk factors pressuring the economic recovery. The key issues are: 1. Sub-prime Problem A new round may ignite as there are still a large number of financial institutions that suffer losses from investment in the sub-prime markets. In addition the acute economic slowdown could lead to increasing NPLs. When debtors’ business faced marketing problems, slacking production and employment followed and consequently financial institutions will end up with low-quality debts. 2. Oil Prices In the first half of the year oil price may rise from such very low levels since the OPEC is trying to control production volume. In the early part of 2009, oil production has been cut by 2.2 million barrels/day and is anticipated to cut further to retain the prices deemed appropriate. 3. Limited Economic Stimulation Measures Since leading economies especially the United States and Japan implemented unrestricted monetary policy in the prior year reducing the interest rates to nearly 0 percent, this measure could no longer be used to boost liquidity in the financial sector again. Meanwhile, the fiscal measures used in stimulating the economy took a toll on the fiscal positions of the countries especially the United States that have encountered chronic twin deficits and Germany that experienced large budget

deficit exceeding the EU agreement for several consecutive years, as well as Japan whose public debts score higher than 50 percent of GDP. 4. Unemployment Problem As several corporations faced plunging sales, employment will be seriously affected so much that they had to down size their employees continuously from the prior year. This, apart from giving direct impact on private sector spending, may cause social problems as well. Hence, the government of each country has to allocate resources to resolve such problems and could not be fully utilized to stimulate the economy. 5. Hard-to-Control Factors Increasingly severe global warming has caused drastic changes in climatic condition and natural catastrophes incurring losses to lives and properties such as earthquakes, hurricanes and tsunami tidal waves as well as terrorism and internal and international political conflicts. All these factors will hinder economic solving, making the task slower or more difficult.

39


2009. Such economic slowdown will spread further to other countries including China and The Thai economy in 2009 will be ASEAN, Thailand’s major export markets as adversely affected by the slackening global well. economy that becomes more distinctive 2. Agricultural product prices continue to and more severe. It is anticipated that export decline from 2008. Higher volumes of will be difficult in time when purchasing agricultural products enter the market as a power in main export markets plunges result of increased productivity of many deeply. Private consumption and investment countries and the release of rice from stockpile also will slow down. The 2009 Thai economy of China and Vietnam as well as rubber is thus expected to contract about 1.0-0.0 stockpile release by China. All these will have percent, better than the economic crisis negative impact on the exports of Thai during 1997-1998 when the Thai economy agricultural products and farmers’ income, shrank as much as 1.4 percent and 10.5 dragging down provincial consumption and percent respectively. Presently, Thailand’s spending. international reserve is strong with efficient 3. Although internal political conflicts have foreign exchange system that can track the been much alleviated but still simmering and stability of the Baht and inflation is low, thus shattering the government’s stability. Thus it is favoring the implementation of monetary and regarded as significant variable to determine how well Thailand will be able to struggle out fiscal policies for economic stimulation. The key issues hampering the Thai of the 2009 economic crisis. 4. Global warming has brought more economy in 2009 are summarized below: 1. Slackening world economy especially frequent and severe natural catastrophes with those of leading industrial countries drastic changes of climate like never before, including the United States, Europe and adversely affecting health and well-being of Japan where recession has already affected the people and livestock. All these incur Thailand’s export and tourism sectors since higher expenses to the country both in late 2008 and will become more intense in preventive and corrective measures while the government’s budget is rather limited.

The Thai Economy: Struggling Hard … to get through the Crisis

Ann ual Report 2008 Krung Thai Bank Pcl.

40


An Overview of Commercial Banking Business in 2008 and Outlook for 2009

• Deposits expanded from the prior year by Baht 605,583 million or 10.20 percent since commercial banks needed to retain their own market share. Concurrently, banks had to Commercial Banking Business in reserve more liquidity to cash on against foreign financial crisis. Hence they each 2008 Operating commercial banks in 2008 competes continuously issuing short-term was difficult in time of economic downturn deposit products with high interest rates plus following the global economy that was bonuses and privileges. seriously impacted by the US sub-prime • Liquidity rose from year-end 2007 with crisis and escalated to damage the financial total cash on hand, deposits and loans up by sector worldwide including Thailand. as much as Baht 818,432 million or 12.30 Invested assets values were highly impaired. percent while loan to deposit ratio and In addition commercial banks had to face borrowings declined to 85.49 percent from prolonged political conflict and were 85.60 percent as at year-end 2007. required to comply with more stringent legal • NPLs before deduction of allowance for and financial regulatory measures. Despite doubtful accounts dropped from prior year by all these obstacles the overall performance Baht 56,874 million or 12.88 percent and NPL was still better when compared to that of the to loan ratio decreased to 5.62 percent from 7.81 percent as at year-end 2007. prior year. Details are summarized below: • Capital funds grew from prior year by Key Financial Information of Commercial Baht 120,055 million or 15.03 percent as capital funds to risk assets ratio dropped to Banks Incorporated in Thailand 13.98 percent from 14.85 percent as at year • Net income rose from the prior year by Baht 75,682 million or more than 10 folds as end 2007 as a result of Basel II allowance for doubtful accounts declined implementation in late 2008. Albeit all these, greatly by Baht 51,989 million or 54.93 the banking industry was not adversely percent after fully provisioned allowance for affected. doubtful accounts in accordance with the new accounting standards at year-end Key Factors Affecting Commercial 2007. Interest and non-interest expenses Banking Business dropped by Baht 20,658 million or 5.44 • US sub-prime crisis resulted in percent due to interest rate down trends and bankruptcy of several foreign financial more efficient cost management while total institutions causing four Thai commercial income increased by Baht 15,046 million or banks investing in Collateralized Debt 2.95 percent as lending grew continuously Obligations (CDOs) totaling about Baht and fee-based income also increased from 25,000 million to experience huge losses from launching new financial products and assets impairment. However, the overall services, as well as expansion of service banking industry was not impacted since the CDOs accounted for only about 0.30 percent channels and business alliance network. • Loans increased by Baht 654,695 of total assets. million or 11.75 percent from year-end • Several key financial rules and 2007, when political turmoil improved in regulations by the regulators were enforced in midyear regaining confidence to some 2008. Among them were the Financial extent. Moreover, global financial crisis at Institutions Businesses Act, the Deposit year-end prompted commercial banks to set Insurance Agency Act, the Credit Bureau Act aside higher reserves as working capital in (No.3) and the Securities and Exchange preparation for negative impact from global Act (No.4) particularly the Consolidation Supervision and Basel II requirements that the crisis that spread into Thailand.

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Ann ual Report 2008 Krung Thai Bank Pcl.

BOT had given a long preparation. Apart from this, BOT still takes stringent measures and inspects aggressively on risk management, regulatory compliance, capital adequacy and good corporate governance so that financial institutions could conduct their business efficiently, strongly and with stability, well-prepared for the volatile economic and financial changes to come. • Extension of coverage for full deposit insurance to August 2011 after the Deposit Insurance Agency Act became effective on August 11, 2008 unaffecting the commercial banking industry as much. Nevertheless, this Act redirected more savings to the capital markets thus resulting in fiercer competition in mobilizing deposits. • A single time cut in the repurchase rate of as much as 1.00 percent, the highest since BOT implemented inflation targeting in 2000 as a result of global financial crisis and interest rates that dropped to nearly touch 0 percent. Commercial banks thus cut their interest rates both on deposits and loans, forcing the spread between them to be narrower.

42

• Net income tends to decline as interest rate gap grows narrower from the low volume of loans that correlates with economic slowdown and the downturn of interest rates. While costs of interest paid rise from the upward adjustment of interest rates on deposits during mid-2008 and competition in short term deposits mobilization. • Demand for loans tends to slow down in line with the lackluster economy. It is observed that major corporates have turned to mobilizing capital through debenture issuance instead of the normal credit. At the same time, the clearly slackening economy prompts commercial banks to be stricter with their lending, to prevent the incurring of substandard debts. • Deposits mobilization will be tougher as income and public savings tends to plunge, combined with continuously lower and unattractive interest rates thus resulting in the transferring of deposits to other more attractive alternatives. • Liquidity tends to tighten with higher risk due to foreign liquidity strap. Businesses that used to rely on foreign loans turn to more local sources of funds. The global economic crisis will put pressure on Thailand’s current accounts to experience larger deficits thus Commercial Banking Outlook for 2009 Commercial banks face more challenges resulting in declining of money supply and in 2009 as the risk factors became more inflow of foreign capital as well. intense. External factors, such as credit • Asset quality tends to deteriorate, both default swap (CDS) is expected to widen its investment assets and loans, thus causing damages while capital flows will be highly NPLs to surge up sharply particularly SME volatile and the global economy faces a risk loans, personal loans, consumer loans and to change from a slowdown to recession. credit card debts since customers are Meanwhile, Thailand’s internal factors apart adversely affected by the economic slowdown from the much slackening economy and employment lay-off resulting in declining following export, the persisting political ability to repay debts. Hence, commercial conflicts will hinder the government’s banks will have higher burden in provisioning implementation of economic recovery policy. for doubtful accounts. Hence, it is hard for commercial banks to • Capital adequacy tends to drop since avoid the negative impact that will follow, in the enforcement of Basel II at year-end 2008 particular, the pressure of liquidity and debt lowered BIS ratio by about 1 - 2 percent. quality. As a result, overall business However, this have no negative impact on the operation of commercial banks in 2009 will Banks’ stability as the ratio is still higher than change the direction dramatically from 2008 8.5 percent as prescribed by the BOT. as follows:


• Commercial banks’ investment in foreign assets will bear higher risk due to high volatility in global money markets, and the prevailing financial problems still unsettled. Investment thus bears high risk of receiving low returns and may incur more expenses in provisioning for asset quality or may write off the whole amount of investments. • Regulator supervision will be more stringent to prevent losses to the financial sector. Apart from BOT’s enforcement of monetary measures in the existing timeframe, Basel II requirements and Financial Sector Master Plan Phase 2, supervision of commercial banks will get stricter in 2009. Great importance will be given to liquidity both sources and uses of funds, capital structure and emergency liquidity plan. On foreign deposits and investments, supervision will be on exposure, investment policy and risk management as well as self-adjustment to cope with the unexpected. As for NPLs, BOT will closely supervise the credit process, special caution businesses, debt restructuring and provisioning of allowance for doubtful accounts so that NPL to loan ratio will decrease to a level of 2 - 3 percent within the year 2013. Apart from all these, BOT will require banks to conduct scenario and stress testing to protect against credit risk, market risk and liquidity risk which will impact on capital funds. Other BOT requirements included inspection of financial planning both debts provisioning policy and dividend payment policy as well as implementing ICAAP under Basel II Pillar II seriously. From such supervisory direction, commercial banks have to manage their costs, keeping them low with optimum efficiency and manage risks carefully especially credit risk that require prudent analysis and approval. Banks will have to render personal advisory services to clients particularly on their cash flow to prevent the

incurring of bad debts that will adversely affect capital. They must also manage liquidity risk adequately to cater for financial volatility and crisis that may worsen, in order to avoid losing income earning opportunities and help reduce negative impact on overall financial system. Besides, commercial banks in 2009 will compete in expanding fee based income from both corporate customers that tend to issue more debt instruments to supplement their liquidity and retail clients needing wideranging services particularly advisory services on wealth management. People start to realize the importance of such services after enforcement of the Deposit Insurance Agency Act. With the economy slowing down efficient cash management is much needed. Moreover, in time of hardship market expansion and income building are very restricted. Most commercial banks then turn to restructuring and enhancing their organization in full consonance with BOT supervision. Also included is beefing up business alliance network to a stronger and broader base, ready to cope with any risks that may be more severe than anticipated and getting all set for immediate advancement upon economic recovery.

Competition and Adjustment in Banking Industry

During 2008, competition in deposits intensified due to several factors including the effective of the Deposit Insurance Agency Act in August 2008 and low interest rates unattractive to depositors. Financial institutions needed much capital funds to boost liquidity in the money markets that tended to get tighter from negative impact of global financial crisis while each bank tried to retain its own market share. On lending side, competition was not keen due to slackening economy and political situation unfavorable to investment expansion, thus causing demand for loans to slow down. At the same time, commercial banks were more cautious in lending to avoid NPL problems. Overall marketing competition among commercial banks in 2008 is summarized as follows:

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Ann ual Report 2008 Krung Thai Bank Pcl.

44

• Products and Services Banks turned their attention to focus on new financial products and services especially deposit products to meet financial needs of customers. Products are enhanced and diversified to give more alternatives for savings, such as highly liquid deposits, deposits plus cash management, deposits with health protection and deposits for future home purchase. Apart from these, banks joined hands with their business alliances in offering new financial products and services such as non-life insurance, life insurance, cash and investment management to boost business opportunities, create fee-based income and preparation towards complete line of financial services. • Pricing There was fierce competition in promoting deposits with high interest for savings, time deposits and short-term bills of exchange. Competition in loans was not intense due to lackluster economy except for housing loans with offering of interest rate as low as 0 percent for the first 3 - 6 months plus maximum credit line and flexible repayment periods. • Distribution Channels All banks turn their focus on developing and expanding their distribution channels to reach the target customers. This included opening full branches, sub-branches and branches in shopping malls and commercial centers. In 2008 number of branches posted as many as 5,473 branches, 384 branches more from the year 2007 or an increase of 7.55 percent. The number of automatic service machines including ATMs, ADMs and passbook update machines surged up by 5,068 machines or 19.69 percent to a total of 30,816 machines. Moreover, banks provided financial services on mobile phone whereby clients are able to deposit, withdraw, transfer funds, pay for goods and services and inquire financial information on cell phone. • Sale Promotion Banks organized sale promotions continuously such as deposit products on various festivals, NPA Grand

Sale to speed up sales of non-performing assets. The 8th Money Expo 2008 was highly successful with total transactions worth over Baht 120,000 million, the highest ever since the start of this event. Moreover, active and continuous publicity for sale promotion through other media were conducted during 2008 particularly usage of television to introduce new services or reaffirming services that banks wish to communicate to targeted customers and not forgotten was the promotion for corporate social and environmental responsibility (CSER). As for 2009, overall competition is anticipated to be less intense due to unfavorable business environment and loan quality tends to deteriorate following lackluster economy. Commercial banks thus have to focus on quality rather than quantitative market expansion. They will provide closer care and consulting services to existing clients so as to collaborate with one another in surviving the crisis and preventing performing loans from becoming NPLs. Scrutiny of new customers will be carried out more cautiously with competition among banks to approach clients of high potential and low risk such as strong corporate customers, government officials and state enterprise employees with stable income and retail customers that will serve as bases for expanding fee-based income. The most used strategy adopted by commercial banks in 2009 will be offering full-ranging services for customers to select, expansion of customers to cover their family members, kin and business groups, and expansion of alliance network to cover the whole business opportunities. In such condition, large banks will be more advantages with regard to capital, costs, human resources, infrastructures and service network while small banks will be more flexible in coping with changes as well as seeking overseas co-investors and merger.


B u s i n e s s O p e r a t i o n An Overview of Krung Thai Bank Performance

The Bank’s Operation The Thai economy in 2008 abruptly changed from a satisfactory growth in the first half-year to much slackening economy in the second half as a result of the escalating US financial crisis affecting the global financial systems and the real sectors of respective countries worldwide including Thailand. Hence, the Bank had to adjust its business plan to be in line with such changes and took more precautions in business expansion. In 2008, the Bank’s operating performance improved greatly including profitability, debt quality and service rendering. Details are as follows: The Bank and subsidiaries earned Baht 12,272 million of net profit, up Baht 5,865 million from the prior year or an increase of 91.54 percent since provisioning for loan losses dropped as much as Baht 8,669 million or 44.29 percent. As a result, the key financial ratios such as ROA, ROE and net profit per employee greatly improved while NPL/Loan ratio declined to 7.68 percent from 9.57 percent, and ratio of allowance for doubtful accounts to NPL rose to 41.65 percent from 38.44 percent. Moreover, the fee-based earnings increased from the prior year by 11.24 percent due to the acceleration of non-interest income in 2008 through expansion of branch network, points of service, automatic machines and business alliances as well as enhancement of product designs to meet the client needs. During 2008, the Bank continued its mission to be the Convenience Bank with services of excellence and optimum customer satisfaction. Hence, the Bank sped up building the Convenience Brand for public recognition offering speedy services,

convenience, completeness and modernity to respond fully to the needs of customers of all target segments. The Bank in 2008 had announced the guarantee of service level agreement for all its branches nationwide. In addition new products and services have been developed to meet the needs and lifestyle of present day customers. New branches were opened bringing the total number to as many as 832 branches at yearend with 5,866 automatic machines serving around the country. Apart from this, new servicing channels were introduced such as 7-day service branches, Self-Service Banking outlets and KTB Mobile Bank as well as designating business alliances to act as Agency Bank providing convenience counter to customers nationwide. As for internal management, the Bank restructured the organization in certain business groups to be in consonance with the changing environment and in support of its operation for greater efficiency.

• Core Business Groups and Income Structure

To attain the goal of being the Convenience Bank in giving the ultimate

45


Ann ual Report 2008 Krung Thai Bank Pcl.

customer satisfaction, the Bank has setup business group to oversee the Bank’s tasks across-the-board with work processes that are well concerted and mutually supportive. This will enable the Bank to efficiently conduct customer-oriented business operation. Details are as below: - Core Income Generating Business Groups comprise six business groups: Network Group provides a full line of financial services to clients under the Bank’s strategies such as taking deposits, lending, payment of goods and services and selling products and services of subsidiaries through Bank’s network of 832 branches nationwide, focusing on boosting interest and non-interest income and optimum customer satisfaction. During 2008, the Network Group enhanced service quality in several aspects. Among them were the Bank’s announcement of Service Level Agreement (SLA) to the public assuring over-the-counter services within three minutes per transaction, new account opening with ATM card 10 minutes, approval of Thanawat Revolving Loan within five working days and approval of housing loan within seven working days. Moreover, the Bank helped to create hospitable ambiance and preserve Thai culture through sharing of kindness and care with the disabled and the elderly coming for services at respective branches. In so doing, branches provide them with conveniences and staff to render services especially for them. The Network Group, in 2008, opened 71 new branches, 26 in the metropolitan area and 45 in the provinces as well as 17 foreign exchange booths. The Bank is the first commercial bank in Thailand that has 7-day service branches in all provinces.

46

As for operating performance under the 2008 work plan relating to deposit and credit expansion, NPA sale and in particular, feebased earnings increase, the Network Group was able to outperform beyond the targets set while NPLs were at low level. As for 2009 work plan, the Network Group will focus on boosting income both from expansion of quality credit and various fee-based earnings. Present customized products for each client group and sell all types products of the Bank and subsidiaries. Furthermore, the Group will strengthen employees’ competency in becoming professional sellers and boosting service quality continuously to always remain as the Convenience Bank in the clients’ mind. The Group will coordinate more with business units responsible for opening new branch and installing ATMs, expanding spaces for customer service and increase 7-day branches in good prospects areas. Moreover, the Group will prevent NPL increase through debtor management and close monitoring of credit line usage, expedite instant and comprehensive debt improvement and setup standard guidelines for this purpose in consideration of overall


risk management. Business Center Group takes care of the small and medium enterprises (SMEs), the crucial foundation for national economic growth and one of the main customer targets of the Bank since credit extended to SMEs has low risk weight under Basel II. Business Center Group provided the SMEs with loans and various products through the 63 business centers (BCs) nationwide, manned by qualified and experienced staffs whose competence have been enhanced continuously to look after the clients. Apart from rendering basic credit line, the Group established several loan projects to support and strengthen the SME competency that are in line with the government policies such as SMEProductivity Loan for enhancing production efficiency which could help to cut cost and boost profitability, SME-Innovation Loan to increase innovation competitiveness, and KTB-Green Loan to promote energy saving and use of alternative energy. Besides, the Group disseminated knowledge to SMEs through respective projects such as Modern Management for SMEs to enhance their knowledge and experience in doing business and helps strengthen the new SME entrepreneurs, and Business Matching Project to support the SMEs inter-trading and mutual exchange of information. Under 2009 work plan, the Business

Center Group will focus on extending credit to SMEs while expanding Bank business through cross-selling products of the Bank and subsidiaries so as to boost capability of the client’s business operation. Moreover, the Bank will focus on strengthening the SME customers emphasizing their roles as business alliance and buddy and setup SME Customer Value Added Programs to give technical knowledge to the entrepreneurs as well as supporting activities of exchange of knowledge and experience among customers and business alliances. At the same time, the Bank will keep promoting employees’ competency to enable them to be efficient consultants in looking after the clients in all situations. Government & State Enterprise Relations Group renders financial services to respective government agencies and state enterprises, a large client base with low risk. Services include deposit taking, corporate loans to government bodies and retail loans to government officials and state employees as well as intermediary of payment for goods and services among public sector, private sector and counterparty. The Government & State Enterprise Relations Group, in 2008, offered retail loans as welfare assistance to government officials and state employees such as housing loans and multi-purpose loans which were so well responded that the volume exceeded the target by more than double. Apart from this, the Group joined hands with the Products & Marketing Management Group in extending loans for development of local administration organizations and enhancement of electronic application for government agencies in several projects such as vehicle tax payment through all service channels of the Bank for the Department of Land Transport,

47


Ann ual Report 2008 Krung Thai Bank Pcl.

e-Custom project for the Customs Department to manage import and export customs work, e-Ordering project to enable PTT gas stations to buy gasoline online via PTT website with automatic confirmation of online ordering and instant delivery. Other projects included management of Student Loan, payment of local taxes for the Bangkok Metropolitan Administration and Local Administration Organization, and the “Convenience Counter� in collaboration with Thailand Post Co., Ltd. providing real time deposit/withdrawal services at any post office. Furthermore, the Group took part in social contribution through service of transferring living allowance to the accounts of the elderly, disabled and AIDS patients free of charge for the Local Administration Organization. With the impact of global financial crisis on Thai economy which will continue to slow down, the Bank thus plans to expand more credit to the government sector in 2009 to reduce risk and support government operation. The Bank aims to be a source of funds for the public sector for budget disbursement while providing more retail loans to government employees to boost purchasing power and stimulate domestic economy. On expansion of fee-based income, the Government & State Enterprise Relations Group will enhance the electronic systems in conjunction with various government agencies and state enterprises in several projects. Among them are VAT Refund Transfer Service with the Revenue Department, Export Insurance Refund with the Customs Department and payment for services of the Department of Land via internet and ATM. The Group will further increase the Convenience Counters in remote communities with no KTB branch and will

48

continue on with the implementing of the KTB Co-op project. Besides, the Group will stress the importance on social and environmental development through setup of loan projects on local community development and the environment as support of funds for government agencies in national development of public service systems. The Group intends to accomplish all these tasks as it moves forward to be front-runner of being the Convenience Bank for the government. Corporate Banking Group provides private corporate clients with credit lines of Baht 500 million and over through arrangements for loans that suit their business operation and requirements. In addition, the Group renders other services such as debenture issuance for clients, cash management service and offering hedging tools to customers. During 2008 the Corporate Banking Group was able to expand loans, both from existing and new client bases, well beyond targets, most of which covered all crucial economic sectors such as agriculture, manufacturing, services, power, construction and government investment projects. As for key work plan in 2009, the Group will continue stressing on loan expansion to existing and new clients with special emphasis on sectors in energy, construction contracting particularly for government and mega-projects, agribusiness and services. While the economy is slowing down, the Group will pay special attention to close monitoring of customers and take more aggressive measures to prevent NPLs. Products & Marketing Management Group oversees marketing management of the Bank offering products and services that meet customer needs through appropriate


channels while conducting sales promotion and communicating relevant information to target client. The Group’s responsibility covers market research to understand and access customer needs, product design and development, branch and electronic channel enhancement including ATM, Internet Banking and Mobile Banking as well as conducting marketing activities for promoting and boosting sales. Products & Marketing Management Group In 2008, the operating performance of sets it target to continuously increase Products & Marketing Management Group deposits, bills of exchange, loans and fees. was beyond the targets in all aspects, Focus will be on expansion of private deposits, bills of exchange, loans and company group and company employees to financial management, through its use more payroll services and loans with the cooperation with the core income-generating Bank. Besides, the Group will open new business groups in launching deposit branches and install more ATMs especially in products successively such as KTB red business areas of good prospect. It will also packet for Chinese New Year, KTB for Love enhance the financial management system and KTB Deposit against Inflation. On retail to respond well to the needs of public loan expansion, the Group expedited mainly organizations, state enterprises and private expansion of housing loans and personal corporations. loans. Regarding cash management, the Financial Management Group Group enhanced four main applications formulates the Bank’s business plan and namely Payment & Disbursement, Collections oversees the financial structure is at and Receivables, Liquidity Management and appropriate levels while getting ready to Information Report to facilitate customers with create profit from managing the Bank’s more convenience in doing their business. investment and excess liquidity. Also the On expansion of distribution channels, the Group oversees services relating to interest Group joined forces with the Network Group rates and foreign exchange rates including in expediting expansion of branch network wealth management. Moreover, the Group and increasing working days as well as serves as a center for financial information, installing 1,000 more ATMs. Hence, the Bank customer information and management enjoyed greater non-interest income while information and publicizes them to investors, gaining surplus on ATM pool usage balance rating agencies and general public. for the first time after deficits for several years In 2008, the Group’s implementation of running. Moreover, the Group introduced a the key plans made satisfactory progress state-of-the-art product, KTB Pocket namely “Economic Value Management Banking through cell phone and introduced (EVM) Project Phase III” was able to fulfill the Intelligence Queue system as an complete requirements for state enterprise experiment to boost servicing efficiency. operation assessment and was recognized Concerning work plan in 2009, the that the Bank’s utilization of the EVM system

49


Ann ual Report 2008 Krung Thai Bank Pcl.

greatly advanced. Concerning the preparation on International Accounting Standard No.39 (IAS 39), the Group set up a working team with the hire of consultant to render advisory service and see that the IAS 39 complies with the requirements prescribed by the Bank of Thailand and the global standards. Another key project implemented in 2008 was the enhancement of savings planning software program and calculation of investment ratio to cater for wealth management which would be a significant source of the Bank’s earnings in the future. As for work plan in 2009, the Financial Management Group attaches great importance to the Bank’s capital funds and liquidity management that it is at appropriate levels and well prepared to cope with emergency particularly the financial crisis whereby the public needs to have confidence in the Bank’s financial standing. Moreover, the Group plans to enhance the analysis, prepare the appropriate Cash Optimization Model and better consulting service on wealth management which will help to boost the Bank’s non-interest income. - Business Groups Overseeing Risk Management consists of 5 groups as follows: Credit Risk Transaction Management Group (CRTM) operates independently, playing a crucial role in the Bank’s asset quality. It functions as check and balance in the lending system. The Group scrutinizes, assesses and gives advice on credit approval as well as overseeing credit extension to be strictly in compliance with the Bank’s credit policy and procedures. Since 2008 was the year of highly volatile economy, finance and politics, the Credit Risk Transaction Management Group thus focused on aggressive performance so as to obtain

50

quality loans through close monitoring of business condition and each individual industry to be able to keep abreast with the changing external environment that might adversely affect credit quality. Moreover, the CRTM Group closely collaborated with respective business groups in monitoring, reviewing and preventing the performing loans from becoming problem loans and problem loans from turning to NPLs while quickly resolving problems if finding any sign of deterioration in credit quality. Apart from this, the Group actively joined hands with the Human Resources & Corporate Governance Group in organizing regular training and workshop for its staff members so they all would be able to perform the credit scrutiny task efficiently and with standard quality. The Group also upgraded staff performance quality through fixing SLA for various activities which will help to speed up the overall credit extension process, thus creating more customer satisfaction.


As for 2009 work plan, CRTM Group will continue with enhancement of quality and time for credit scrutiny. In so doing, the Group will seek cooperation with business groups concerned to provide relevant information and build models of various industries as well as setting standards for credit scrutiny. Moreover, the Group will attach the importance to enhancement of its staff’s competency so they will be able to keep up with the changing environment. Internal Audit Group provides recommendation and advisory service, assesses and examines operation processes, information system, internal control and risk management of the Bank. The Group performs its duty independently and fairly to enhance the operation of the Bank under the principles of good corporate governance. In 2008, the Internal Audit Group developed two key application systems, that is, Surveillance Room system to audit and monitor financial reporting and the Audit Program system to monitor the business units under audit that have completely taken actions as recommended. Moreover, the Group successfully attained the target of auditing within the specified timeframe and was able to assess the adequacy of business units’ internal control measures according to the standards set by the Office of the Auditor General of Thailand in a complete manner for all business units and assessment areas under the assessment guidance of the State Enterprise Policy Office. For 2009, the Internal Audit Group has set up strategic plan aiming at boosting efficiency in internal auditing to cover all risk types and operation processes and will integrate audit work with other business units, inside and outside the Bank. In so doing, the Group will focus on auditing every activity

in the main transaction to enable it to detect and find the issues and provide recommendations in accordance with the Bank procedures and requirements of the regulators as well as being able to close the gaps or loopholes in the systems or procedures that could cause irregularities. Apart from this, the Group plans to further enhance the Surveillance Room in continuation from 2008 in the part of ATM Fraud and e-Banking to strengthen the efficiency of auditing and monitoring transactions of these two types. Risk Management & Compliance Group is responsible for formulating policies and strategies on management of risk relating to the Bank’s business operation including credit risk, market risk, operational risk and enterprise risk. Also prepare policies, procedures and see that all operations comply with the prescribed rules and applicable regulations in banking business. Additionally, the Group assesses, monitors and controls risk management in accordance with the Bank procedures and the regulatory regulations. In 2008, the Risk Management & Compliance Group sped up the enhancement of all risk management up to international standards and with higher efficiency. On credit risk, the Group revised credit risk management policy and manual for greater efficiency in line with the Financial

51


Ann ual Report 2008 Krung Thai Bank Pcl.

Institutions Business Act B.E. 2551 (2008) and the Bank of Thailand’s credit risk supervision policy as well as Basel II requirements. RAROC was introduced in credit analysis and approval process with stress testing being conducted to assess negative impact from economic factors on capital funds adequacy. The Group also gathered relevant information for developing models to enable it to assess capital funds according to Basel II requirements more efficiently. Concerning operational risk, guidelines for operational risk management were laid out in accordance with Basel II requirements with the help of hired consultant. Operational risk management policy was reviewed and risk appetite and risk tolerance were determined. Moreover, Business Continuity Plans (BCPs) for key transactions have all been prepared. All business units are required to report losses or damages resulting from operational risk as well as doing the Risk Control SelfAssessment (RCSA) at least once a year thus helping the Bank to have risk information that reflected the true risk of business units and sufficient for determining the Operational Key Risk Indicators (KRIs). As for market risk, the Group has been getting ready for the new assessment of the State Enterprise Policy Office such as setting up aggregate market risk limit and classifies trading portfolio risk for more efficient risk management. On enterprise wide risk, the Group installed and implemented software application for calculation of capital funds under Basel II accurately using standardized approach and within the time scheduled by the BOT. Preparations were also made for advanced approach in the future. For 2009 more preparations are planned for Basel II and improvement of the

52

composite rating per BOT requirements. These include ICAAP policy framework, loan portfolio management, enhancement of tools for assessment, monitoring, control and mitigation of operational risk, improvement of market and liquidity risk management process to be in line with the ICAAP, and disclosure of information under Basel II (Pillar III). Asset & Legal Management Group is responsible for management of nonperforming asset (NPA) with the aim to reduce the volume and generate income from NPA sale. Other responsibilities include managing the Bank’s asset quality to prevent the occurrence of NPL, management of NPL, as well as overseeing the adequacy of provisioning for doubtful accounts in line with requirements prescribed by the BOT, expediting debt repayment and handling of legal matters for more efficiency both for the Bank and employees and taking legal actions with malefactor. During 2008, the Group attached significance to efficiency enhancement of respective processes such as selling NPA online for more convenience to clients and improved the website on NPL, resulting in a significant reduction of NPLs as targeted by the State Enterprise Policy Office and bad debt recovery volume was beyond the Bank’s target. Moreover, the Group provided knowledge to credit business units on the importance of recovering bad debts which could help to boost the Bank’s earnings. Crucial work plan for 2009 the Asset & Legal Management Group will make more aggressive moves in selling NPA. Clients will be segmented and NPA will be classified into types that match different segments. Bank will assign officers to take care specific customer groups. More diversified channels


for NPA sale will be added together with active sale promotion to stimulate decisionmaking. Employ appropriate advertising media and provide service quality assurance through work enhancement. At the same time, the Group will make NPAs more attractive before put up for sale so as to get better prices such as primary repair of assets before sale, putting up proper sale notices and taking steps to safeguard properties from any invaders. Besides, the Group will organize training program to coach staffs to be professional in selling NPA and will modernize and update website: http:// www.npashowroom.ktb.co.th to provide clients with the latest update on NPA sale. On expedition of debt recovery, the Group will closely coordinate with various business groups and the Credit Restructuring Group so that write-off will proceed efficiently. On legal operation, the Group will speed up the legal proceeding in parallel with debt restructuring negotiation which will help to readjust debtors’ debts to be performing ones. Beside, the Group will expedite the debt repayment expedition process for debtors that just started to default to prevent NPLs as well as hasten legal procedures on the malefactor to quickly get repayment or compensation. Importantly, the Group will establish in 2009 an enhancement project to link legal information with other information sources in the Bank boosting management efficiency. Credit Restructuring Group manages NPLs of business centers and corporate banking group under the Troubled Debt Restructuring policy framework of the Bank of Thailand. Main objective is to rectify NPLs to performing loans (PLs) thus enabling the Bank to earn more interest and non-interest income from restructured performing debts

while reducing costs of loan loss provisioning as well. During 2008, the Credit Restructuring Group’s performance was well beyond the targets both in NPL volume reduction and bad debt recovery. Work was in accordance with the formulated strategy and key plans. These included debt restructuring expedition to meet set target, segmentation of debtors for prioritizing the importance, analysis of debtor problems to find appropriate negotiation and acceptable conclusions, monitoring debtors to comply with covenants in debt restructuring agreements as well as proceeding the legal cases to the final end. In 2009, the Credit Restructuring Group plans to enhance the NPL rectification process for greater efficiency particularly issues of setting criteria, methods of work and creation of tools for debt monitoring as well as on-going enhancement of staffs’ knowledge and skills so they can handle complicated tasks thus supporting the Group to achieve the specified targets including NPL reduction, debt restructuring and bad debt recovery. - Business Support Group comprises the following two groups: Operation Group supports all incomegenerating business groups and acts as a key driving force in propelling the Bank’s business forward. The Group serves as an operation center for supporting branches,

53


Ann ual Report 2008 Krung Thai Bank Pcl.

international business, credit extension, electronic machine installation, premises and property management, security services, procurement work and IT risk management. During 2008, the Operation Group implemented several projects. Among the key projects was collateral data management whereby all collateral data are centralized for convenience of viewing or retrieving by business units concerned thus cutting down duplication work and reducing errors while supporting efficient collateral appraisal under the BOT’s requirements. Other projects were linking the International Trade Services Department with international business centers nationwide on the internet webbased trade finance system, and the Smart Open Account utilizing ID card reader to supply information for account opening giving more convenience to clients as well as reducing work for branches. Moreover, the Operation Group in 2008 restructured itself in centralizing loan operation management. For major work in 2009, the Operation Group will continue to centralize operation process, enhance core banking system to decrease duplication of work and reduce errors as well as cutting down operating costs. At the same time will help to reduce servicing time to customer while boosting business volume to the Bank. Besides, the Group will oversee the IT infrastructure to be in line with and favorable to the Bank’s business expansion. Human Resources & Corporate Governance Group is responsible for organization restructuring, work improvement and quality assurance for every business unit, ensuring that business operation progresses with efficiency and matches the Bank’s strategy. A crucial task is to manage, plan and develop human resources making them

54

efficient, knowledgeable and competent in the work under their responsibility. The Group encourages staffs to be aware and adhere to principles of good corporate governance, oversees their disciplines and moral ethics that they are strong physically and emotionally as well as enjoying good benefits, honor, dignity, loyalty and pride of their organization. All these will help to drive the Bank forward, yield good return, be the clients’ chosen Bank and is recognized by the society. Moreover, the Group was entrusted in 2008 with the task of overseeing corporate social and environmental responsibility (CSER) as well. The Group’s major performance in 2008 included organization restructuring and reviewing the tasks of business units so as to respond appropriately to the Bank’s operation and targets. The Group recruited young and competent persons to join the Bank, organized numerous training programs for staff development especially in marketing, products and services selling, credit and international business. Encourage staff members to develop themselves through Self-Learning program and promoted management competency for supervisors at all levels as well as encouraging supervisors to develop their subordinates in line with the Bank’s policy on Learning Organization. Besides, the Group developed a pay system based on performance and competency


enabling to see the difference between highperformance and low-performance staff members. This system would help to retain good and competent ones and induce those with low performance to expedite selfdevelopment and would also urge the staff members to perform more tasks of greater value to the organization. As key work plan in 2009, the Human Resources & Corporate Governance Group will further develop and enhance the organization to be in line with the changing environment with higher cutting-edge over

competitors. The Group will oversee that the enterprise follows good corporate governance coupled with its being an organization of learning. This will be done through training courses and seminars. Apart from this, the Group will keep conducting CSER activities by means of supporting, expanding and topping up various CSER projects covering four dimensions in education, social & environment, art & culture, and sports for ultimate benefits of stakeholders according to the Bank’s intention.

Income Structure (Consolidated) Income Type

Dec. 31, 2008 Income (mn. Baht) %

Interest and Dividend Income Loans Interbank and Money Market Items Investments Total Interest and Dividend Income Non-interest Income Gain (Loss) from Investments Share of Gain (Loss) from Investments on Equity Method Fees and Service Income Acceptances, Avals and Guarantees Others Gain (Loss) on Exchanges Reversal of Loss from Impairment of Properties Foreclosed Other Income Total Non-interest Income Total Income

56,520 4,139 4,790 65,449

Dec. 31, 2007 Income (mn. Baht) %

73.78 54,052 5.40 6,197 6.25 5,928 85.43 66,177

Dec. 31, 2006 Income (mn. Baht) %

70.01 55,210 8.03 6,464 7.68 5,618 85.72 67,292

(959)

(1.25)

1,180

1.53

726

0.95

453

0.59

355

0.46

1,112 6,822 1,152

1.45 8.91 1.50

1,129 6,003 672

1.46 7.77 0.87

976 5,519 869

1.25 7.08 1.11

162 2,143 11,158 76,607

0.21 265 0.34 2.80 1,326 1.72 14.57 11,028 14.28 100.00 77,205 100.00

1,308

70.79 8.29 7.20 86.28

159 1,513 10,699 77,991

1.68

0.20 1.94 13.72 100.00

55


Ann ual Report 2008 Krung Thai Bank Pcl.

Consolidated Operation Policy • Overview of Current Business Operation of Subsidiaries

56

document and envelope enclosing for delivery and delivery of cash and documents to other financial institution as permitted by the Bank of Thailand. To support its core business operation and boost the opportunities for building 6. Krung Thai Property Development Co., returns from investments, the Bank invested Ltd. conducts real estate development in the following subsidiaries and associated business. Currently the company is in the process of liquidation for business companies: closedown. - Subsidiaries Group refers to group of companies that support the Bank’s business - Associated Companies refer to group and are vital as a business unit of the Bank. of companies in which the Bank co-invested They provide services to the Bank or acting with the business alliances for strategic as the Bank’s channels in conducting full- business benefits and business synergy ranging financial business. The Bank, in its especially in development of financial capacity as shareholder, oversees that the products other than what the Bank has. They operations of subsidiaries are efficient and in are: line with the Bank policies. This subsidiary 1. Krungthai Card Pcl. conducts the business of credit card and renders personal group comprises: 1. Krung Thai Asset Management Pcl. loan and retail business loan services. conducts securities business relating to 2. Krungthai - AXA Life Insurance Co., management of funds with license from Ltd. conducts life insurance business through the Office of Securities and Exchange co-investment with the AXA Group (France), Commission Thailand (SEC). This company one of the world’s leading insurance has been a profitable investment to the Bank. companies. 2. KTB Leasing Co., Ltd. conducts 3. Krungthai Panich Insurance Co., Ltd. business of hire purchase and hire purchase conducts all types of non-life insurance leasing for all types of movable property and business. 4. Krung Thai IBJ Leasing Co., Ltd. is a factoring business. 3. Krung Thai Computer Services Co., joint venture between the Bank and the IBJ Ltd. provides information technology (IT) Group (Japan) conducting hire-purchase services and advice on development and leasing of tools and equipment of all types, enhancement of computer system mainly to hire purchase of movable property business units within the Bank and and factoring business with focus on Thai-Japanese joint trading clients and subsidiaries. 4. Krung Thai Legal Services Co., Ltd. multinational corporations as well as was founded to boost the efficiency in Japanese companies conducting business in providing legal services and developing Thailand. Bank employees in legal affairs. It provides 5. KTB Securities Co., Ltd. conducts securities business such as securities legal services to the Bank and subsidiaries. 5. Krung Thai General Business Services brokerage, underwriting, financial Co., Ltd. was set up to reduce the Bank’s consultancy and other businesses permitted operational expenses and number of by the Office of Securities and Exchange employees. It renders business services to Commission Thailand. the Bank and subsidiaries in the areas such 6. Krung Thai Charoensri Co., Ltd. as premises management, transportation of conducts the business of cars and property, financial instruments and related motorcycles hire-purchase in the Upperdocuments, security service, printing Northeastern area currently under liquidation


for business closedown. During 2008, the Bank pursued the policy on supervision of subsidiaries and associated companies in the financial business group to be in accordance with the Consolidated Supervision requirement prescribed by the Bank of Thailand. The

objective is to supervise the financial business group for stability and that they operate business appropriately as well as prevention of risk from the group’s business operation. This helps strengthen the financial business group and builds confidence to the Bank’s shareholders and depositors.

Income Structure of the Bank and Subsidiaries Income Type

Dec. 31, 2007

Dec. 31, 2008 (mn. Baht)

Interest and Dividend Income Krung Thai Bank Pcl. Krung Thai Computer Services Co., Ltd. Krung Thai Legal Services Co., Ltd. Krung Thai General Business Services Co., Ltd. Krung Thai Property Development Co., Ltd. KTB Leasing Co., Ltd. Krung Thai Asset Management Pcl. Total Interest and Dividend Income Non-Interest Income Krung Thai Bank Pcl. Krung Thai Computer Services Co., Ltd. Krung Thai Legal Services Co., Ltd. Krung Thai General Business Services Co., Ltd. Krung Thai Property Development Co., Ltd. KTB Leasing Co., Ltd. Krung Thai Asset Management Pcl. Total Non-Interest Income Total Income Krung Thai Bank Pcl. Krung Thai Computer Services Co., Ltd. Krung Thai Legal Services Co., Ltd. Krung Thai General Business Services Co., Ltd. Krung Thai Property Development Co., Ltd. KTB Leasing Co., Ltd. Krung Thai Asset Management Pcl. Grand Total

%

(mn. Baht)

Dec. 31, 2006

%

(mn. Baht)

%

64,600

84.33

65,873

85.32

67,247

86.22

- -

- -

- -

- -

- -

- -

-

-

-

-

-

-

- 844 5 65,449

- 1.10 0.01 85.44

- 298 6 66,177

- 0.39 0.01 85.72

- 40 5 67,292

- 0.05 0.01 86.28

10,402

13.58

10,399

13.47

10,046

12.88

125 18

0.16 0.02

90 27

0.12 0.03

128 49

0.16 0.06

74

0.10

53

0.07

47

0.06

85 139 315 11,158

0.11 0.18 0.41 14.56

11 84 364 11,028

0.01 0.11 0.47 14.28

169 6 254 10,699

0.22 0.01 0.33 13.72

75,002

97.91

76,272

98.79

77,293

99.11

125 18

0.16 0.02

90 27

0.12 0.03

128 49

0.16 0.06

74

0.10

53

0.07

47

0.06

85 983 320 76,607

0.11 1.28 0.42 100.00

11 382 370 77,205

0.01 0.50 0.48 100.00

169 46 259 77,991

0.22 0.06 0.33 100.00

57


Ann ual Report 2008 Krung Thai Bank Pcl.

• Overview of Business Operation under BOT Consolidated Supervision Requirement

58

The Bank has restructured its business operation along the Bank of Thailand’s consolidated supervision requirement to be in compliance with the Financial Institutions Business Act B.E. 2551 (2008) through an establishment of financial business group with Krung Thai Bank as parent company under the investment and management policies as follows: - Investment Policy The Bank has the policy to invest in businesses permitted by the regulators as well as support its core business in achieving the target of being the Convenience Bank. Businesses invested include: 1. Financial Business refers to investment for promoting the Bank’s operation in providing full-ranging services. In 2008, there are seven companies in this business group namely Krung Thai Asset Management Pcl., Krungthai Card Pcl., Krung Thai IBJ Leasing Co., Ltd., Krungthai - AXA Life Insurance Co., Ltd., Krungthai Panich Insurance Co., Ltd. and KTB Securities Co., Ltd. 2. Support Business is investment to facilitate services, providing convenience and boosting efficiency in various operations such as legal task, information technology (IT) system and general services (KTB Training Center management, vehicle and logistic service, assets transportation, security service, document printing, automatic document enveloping and delivery). The Bank has invested in three companies in this group namely Krung Thai Legal Services Co., Ltd., Krung Thai Computer Services Co., Ltd. and Krung Thai General Business Services Co., Ltd. of which the service charges are the same as or lower than those elsewhere. - Management Policy The Bank has supervised the financial

business group under the Consolidated Supervision requirement prescribed by the Bank of Thailand through policies on conducting transactions within financial business group and on risk management. The policy objective is to enable the group’s business operation to proceed appropriately and efficiently with proper supervision and operation standards in the right directions. Moreover, the Bank delegates its executives to serve as directors on the boards of the companies to closely supervise the business. The Bank requires subsidiaries to prepare business plan and annual budget and presented to the Bank for prior approval so the policy will be in line with the Bank’s policy and strategic plan. The Bank closely oversees uses of capital funds of financial business group requiring relevant information analysis and performance report to the Board of Directors and regulators concerned.

Competitiveness of the Bank

In 2008 the Bank still retained its financial strength and continued to make developments in various aspects enabling it to have more confidence in its competitiveness. The Bank is still the second largest in the industry in terms of assets, loans and deposits and holds market share of more than 15 percent of the entire industry and enjoyed having a large government customer base which carries low risk. In addition, the Bank expanded its branch network and service points farther to cover all areas nationwide and invested in state-ofthe-art technology. Human resources are also continuously developed so as to be able to offer products that meet customer requirements and services of excellence to clients of all levels. More importantly, as a commercial bank with government shareholding of over 55 percent has helped strengthen competitiveness amidst global financial slump that caused several world


financial institutions to go bankrupt followed by general concerns. The Bank’s competency development in various aspects during 2008 in response to intense competition and fast changing business environment are summarized below: - Service Level Agreement (SLA) in all branches nationwide The Bank made a public announcement on January 21, 2008 assuring that all branches nationwide would complete over-the-counter services within 3 minutes, new account opening with ATM card in 10 minutes, Krung Thai Thanawat Revolving Loan approval in 5 working days and housing loan approval in 7 working days to uplift service level to the same standards nationwide and moving forward to creation of optimum customer satisfaction. - Greater expansion of service network The Bank continuously expands its branches into prospective areas to widen its access to various customer targets. As at year-end 2008, the Bank had a total of 832 branches. Of these, 138 branches are located in commercial centers and department stores offering 7-day services, thus making Krung Thai Bank the first bank of Thailand having branches operational in all provinces every day. Moreover, the Bank installed many more ATMs, ADMs and passbook update machines as 24-hour selfservice banking points. As a result, the total number of automatic machines as at December 31, 2008 registered as many as 5,866 across the country. Apart from this, the Bank has KTB Mobile Bank to render deposit taking, cash withdrawal, account opening, foreign exchange and other services in various communities, government offices and at event sites. In late 2008, the Bank joined hands with Thailand Post Co., Ltd. to use post offices as Convenience Counter for customer servicing thus boosting delivery capability to reach more clients in remote areas apart from existing alliances namely agriculture Co-ops,

village funds and KTC branches. - Launching financial products that match customer needs The Bank in 2008 was highly distinctive in issuing capital mobilization products particularly the “KTB deposits against Inflation” during mid-year offering a high interest rate of 6 percent to assist depositors facing high cost of living. The Bank was greatly successful in savings mobilization. Other products were also launched periodically on special events. On lending side, the Bank launched product “KTB Salary Plus” to supplement liquidity of government and private clients having payroll passes through the Bank. Borrower was able to get loan double the salary with no guarantor required. Regarding cash management service, the Bank kept developing until it meets customer needs as to convenience, speed and modern lifestyle with broader coverage of transactions. The Bank also offered avant-garde services of various types such as “KTB Pocket Banking” allowing clients to manage and conduct financial transactions on mobile phone of all networks with no need of SIM change, and “KTB Smart Open Account” to facilitate customers’ account opening with no hassle to fill up the application. Currently, the Bank is regarded as the first and the only one that provides such service and also the first bank to introduce “Intelligence Queuing” machine to add convenience to over-the-counter clients with no need to write any slips. - Creating brand new marketing media to the Banking Circle The Bank launched “KTB Radio” project to build public acknowledgement and reaffirm its being the Convenience Bank via radio broadcasting on FM band at 105.0 MHz on air regularly from Monday through Friday during 10.00-12.00 hrs. and conducted by experienced and well recognized team. The format was playing contemporary music alternately with news

59


Ann ual Report 2008 Krung Thai Bank Pcl.

reporting to provide economic, financial and could be topped up for further business by banking knowledge to listeners including the the Bank while supporting the Bank’s being a Bank’s news or Bank executive interviews “Creative Organization”. about services and CSER activities. - Internal process and system Moreover, this radio program give the development During 2008, the Bank opportunities to listeners to phone in for enhanced, developed and introduced new additional information thus adding colors and software systems to strengthen its styles to banking circle comparable to the performance for greater efficiency such as projects “Music Marketing” and “Go OpRisk Monitor for more systematic and Shopping, Go Banking” carried out earlier. efficient operational risk management in - On-going sale promotion activities collecting and analyzing operational loss The Bank and its subsidiaries jointly data, the Meeting Place system to facilitate organized active sale promotion activities sale offers of products and services for higher throughout 2008 including those conducted efficiency whereby branch staff are able to on special occasions and Bank’s have online real-time communications with participation in national events such as fairs Product Specialists at Head Office. Other for launching products, savings expo, Go significant projects included the Document Shopping, Go Banking fair, house & condo Management System (DMS) that helped expo, NPA Grand Sale, Money Expo and expedite inter-unit document delivery while expo called “Trust in Thailand - Good & reducing volume of paper use and document Cheap for Thais”. All these activities enabled storage, and the Image Cheque Clearing the products and services of the Bank and System (ICS) to enter for the inter-bank subsidiaries to be recognized with good cheque clearing development plan of the response from the clients and general public. Bank of Thailand. In addition, the Bank - Employee competency development developed the Risk Management system The Bank organized training courses for along the Basel II requirement to enable the employees in various areas of knowledge Bank to comply with the new requirement including on-the-job training programs prescribed by the Bank of Thailand as throughout the year with objectives to scheduled. develop employee competency to enable them to efficiently drive forward the Key Changes in 2008 Bank’s strategic and business plans. Organization Restructuring Besides, the Bank continuously implemented In 2008, the Bank restructured its respective projects to support and encourage organization to be in concert with the the employees’ interest in developing their operational targets, competition scenarios, own competency such as the Outstanding regulators’ requirements and changing Employees in Servicing Customers Project, environment. The Bank set up one new the Outstanding Branch Top Sales Project, business group, three new business sectors the Building star on Sales Project, the Star on and 10 new departments and raised the Credit Project and the Creative Idea Award. status of 2 offices to departments as well as In 2008, the Bank set up the “Creative Ideas internal improvement of certain business Center” to gather constructive ideas that groups. Details of such changes are:

60


- Credit Restructuring Group was newly established in early 2008 through upgrade of the former three-department Credit Restructuring Sector in the Asset Management Group to a new business group. At the same time, this business group was restructured to have two business sectors, each of which had two departments and were currently increased to three departments per business sector. The Group was responsible for NPL management and debt restructuring along the BOT’s troubled debt restructuring so as to support the Bank in reducing cost of loan loss provisioning and building more income. - Asset Management Group was renamed as the “Asset & Legal Management Group through separating out the Credit Restructuring Department into the newly established Credit Restructuring Group to be responsible for credit quality management, loan loss provisioning management, NPA management, legal-management and loan collection expedition management. - Risk Management & Corporate Governance Group was renamed as the “Risk Management & Compliance Group” through separating out the Operational Risk Management Function from the Enterprise Risk Management Department and setting it up as the Operational Risk Management Department in order to oversee the operational risk more comprehensively and efficiently. The corporate governance function was also transferred to be under the supervision of the Human Resources & Organization Management Group. - Human Resources & Organization Management Group was renamed as the “Human Resources & Corporate Governance Group” and the Corporate Governance & Welfare Sector was added

to oversee three departments namely the Medical Department, the Corporate Governance. Welfare & Discipline Department which was renamed from formerly the Discipline & Welfare Department and its scope of responsibility was broadened to include corporate governance function as well, and the newly established Intellectual Capital & Social Responsibility Department to serve, as a center for overseeing the Bank’s CSER operation to achieve the set objective. - Financial Management Group added two new departments namely the Equity Investment Department and the Wealth Management Department to accommodate the deposit structure that would change after enforcement of the Deposit Insurance Agency Act. - Operation Group transferred its Cash Management Service Sector with three departments under supervision out to be under supervision of the Products & Marketing Management Group. At the same time, the Group raised the status of the International Payment & Settlement Operation Office and the Procurement Office to departmental level. - Products & Marketing Management Group accepted transfer of the Cash Management Service Sector from the Operation Group. Meanwhile, the Group restructured internal organization to comprise three business sectors to be in line with the work process that focused on product research & development, sales process and the entire after-sale services of the Bank as well as supporting the target of creating the Convenience Brand for clients acknowledgement more efficiently. - Government & State Enterprise Relations Group divided its Government &

61


State Enterprise Business Sector into two sectors namely the Government Relations Sector and the State Enterprise Relations Sector. In addition the Government & State Enterprise Strategy Department was added to do the marketing plan and expand financial transaction volume of government clients. - Corporate Banking Group added one new Industrial Finance Department and one more Construction Finance Department to cater for the increasing volume of credit task.

• New Products & Services

Ann ual Report 2008 Krung Thai Bank Pcl.

The new products and services launched in 2008 were mostly deposit services as the low interest rates were not attractive to depositors, the Bank thus presented new products with better returns while offering new loans that were in line with economic and business climate. Details are as follows: - Deposit Products The Bank issued wide-ranging short term deposits from time to time throughout the year to stimulate public savings in time of high cost of living and oil price hike. Such products included the “KTB Ungpao Account” to mobilize deposits during the Chinese New Year, the “KTB for Love” to boost deposits during valentine’s Day, the “KTB Birthday” deposits in celebration of the Bank’s 42nd anniversary and other deposits such as “KTB So Good!”, “KTB Confidence” time deposit, “KTB Retirees Rest Assured”, and particularly “KTB Account Against Inflation” which was well responded by the general public since highest interest rate was offered in the industry. - Loan Products The Bank launched several types of new loans. Among the retail loans were “KTB Salary Plus” to supplement liquidity of clients having salary accounts with the Bank allowing them to borrow money double their salary with no guarantor

62

required, “Household Energy Loan” to enable government officials, state enterprise employees and government permanent employees to purchase energy-saving electric appliances and the “Safe Home Loan” for clients of Krung Thai Subtawee Home Loan while giving interest discounts if using other services together with the loan such as non-life and life insurance. Moreover, the Bank offered several SME loan projects as follows: • Special system for tapioca-planted areas 2007/08 in pilot areas to support working capital to tapioca SME entrepreneurs. • Working capital for energy saving, phase III as working capital for SME entrepreneurs to carry out their energy saving projects. • Working capital for alternative energy use by financial institution phase I to enable owners of premises, factories and energy management companies to use loan for investment and implementation project on use of alternative or renewable energy in business establishments. • Private sector capital support for engineering research and development to support engineering research and development of small, medium and large industries. • Good innovation support loan as interest-free loan to assist and promote entrepreneurs in developing or creating innovation business. • SME productivity loan to help SMEs in improving productivity, technology and production process development. • KTB-energy saving loan to support entrepreneurs to invest in energy saving projects for pollution reduction and environmental conservation. - Cash Management & Processing Bank The Bank has continuously developed


services relating to collection, payment, funds transfer and financial information to meet customer needs with regard to convenience, speed, safety and modern technology with broader transaction coverage. Services rendered are payment for annual car tax direct debit or bill payment through the Bank, Biz Payment enabling customer to conduct several transactions a day and monitor results 24 hours, KTB Convenience Cashier’s Cheque to issue cheques on behalf of various companies or agencies, Krungthai ATM Smart Purse implemented jointly with educational institutions allowing cardholder to use just one card as either KTB ATM card or IPAC card or Smart Purse pre-paid card for goods purchase. Moreover, the Bank has provided “KTB Pocket Banking” service to enable the clients to manage and conduct financial transactions on their cell phone in all system networks with assured security provided. Clients are able to conduct interaccount funds transfer up to nine accounts, make payment for goods, services, credit card and utility including inquiry about deposit account balance and financial information such as interest rates, products and services available. Apart from this, the Bank is the first front-runner in providing several avant-garde services such as KTB Smart Open Account enabling clients to open new account with no need to fill out application, and KTB Intelligence Queue allowing customer to deposit, withdraw, transfer money and make payment for goods and services through over-the-counter service with no need to fill out application. Furthermore, the Bank has joined forces with business alliance, Dhipaya Insurance Pcl. in presenting card services comprising Krung Thai-Dhipaya Insurance Privilege VISA-Debit Card with Baht 200,000 personal accident

insured amount and Krung Thai-TIP Smart Card as non-life insurance card enabling customers to buy insurance coverage of their choice with no need to await for results from the company.

• Progress of Key Projects

Over the year 2008, the Bank’s key projects were continuously developed in support of the business plan to achieve the targets set with progress made as follows: - Processing Bank The Bank completed the system development in three product groups namely Bill Payment, Bulk Payment and Auto Fee Collection and nearly finished the task in another two groups namely Cheque System and Funds Transfer System. Such progress played crucial parts in enabling the Bank to expand customer base and build fee income from cash management service much beyond the specified target. - CRM The Bank already completed the online customer information system development in the pilot branch thus enabling services for Thanawat Loan, VDB card and Life & Non-Life Insurance of the Bank and its subsidiaries to enjoy higher efficiency while supporting the Bank to better conduct its aggressive marketing to access more clients. In this regard, the Contact Center business unit was able to recommend goods and services as needed by customer by telephone. - Loan Origination (KTB CMS) The Bank completed the system development including Commercial Loan system for corporate, medium and small business customers, TDR Commercial Loan for corporate business loans, Housing Loan, Consumer Loan and Thanawat Loan while improving credit approval process covering pre-approval and post-approval processes to enable the

63


Ann ual Report 2008 Krung Thai Bank Pcl.

Bank’s credit approval to be of unified standard across-the-board. Besides, credit operation control was strengthened to be in compliance with policies and procedures resulting in less operational errors as the Bank had credit database that was favorable to efficient risk management and income earning. - Basel II Framework The Bank has developed the system to cater for Basel II enforcement since late 2008 for capital funds calculation using Standardized Approach (SA) and preparedness for calculation using Advanced Approach to be used in the future. Moreover, the Bank prepared various tools for credit risk and operational risk management such as Credit Scoring, OpRisk Monitor, Op VaR and trained users to have efficient skills in using tools for Pillar II requirement such as Stress Testing and Economic Capital. - HR Scorecard System The Bank has developed the HR management strategy for greater efficiency in five dimension namely strategic harmony, HR management efficiency, HR management effectiveness, HR corporate governance and quality of life and balance between life and working. - Document Management System (DMS) Development was completed including electronic filing system, document retention and executive monitoring system thus enhancing the efficiency of the Bank’s filing and document retention while reducing messenger and fax costs, storage space and boosting efficiency in document search or monitoring.

Research and Development Policy

As the Bank has clear operation direction in creating customer satisfaction and good impression, it attaches great importance to the development of products and services that meet the needs of various customer segments and keep developing service quality. During 2008, the Bank conducted

64

research and development tasks leading to the launches of new products and services for more choices to clients such as KTB Pocket Banking, KTB smart Open Account and KTB Intelligence Queue. Concerning service quality assurance development, the Bank in 2008 announced the Service Level Agreement assuring the branch service quality through assurance of “servicing period” for four types of services rendered namely over-the-counter service, new account opening, Krung Thai Thanawat Loan approval and Housing loans approval. Meanwhile, the Bank assigned key performance indicators (KPIs) to all business units for creation of customer satisfaction both external clients and business units within the Bank. To support the success of development under the policy, the Bank carried out the development assessment project including crucial projects such as Survey of Customer Satisfaction and Corporate Identity in which external specialists were outsourced. At the same time, the Bank implemented several assessment projects itself including Branch Customer Satisfaction Survey, Head Office Business Unit User Satisfaction Survey, Shareholder Satisfaction Survey, Government & State Enterprise Satisfaction Survey, InterUnit Cooperation Assessment in credit approval process and Subsidiary Customer Satisfaction Assessment. In 2008, the Bank’s research and development expenses totaled about Baht 4 million.

Social and Environmental Projects

To enable the continuous social and environmental activities to proceed systematically under the Bank policy thus benefiting the society and environment according to its intention, the Bank set up a new business unit named the “Intellectual Capital & Social Responsibility Department” in the Human Resources & Corporate


Governance Group to be responsible for the Bank’s social and environmental responsibility. This played a vital part in enabling the Bank’s CSER image to be distinctive and more recognized as reflected from a survey by Foresight Research Co., Ltd. finding that Bank customers, peer bank customers, investor, mass media, students and general public all acknowledged the Bank’s CSER role and had good sentiment toward CSER activities. The most distinctive activity was found to be education that was in line with the Bank’s mission aiming at promotion and creation of intellectual capital. Importantly, the Bank took pride in being presented with the CSER Award for 2008 from the State Enterprise Policy Office thus inspiring the Bank to be determined to conduct banking business in parallel with CSER operation at all times. The Bank’s CSER activities in 2008 are summarized below: • The Board of Directors and the executives paid great attention to materialize the CSER policy through continuous participation in respective activities particularly intellectual capital building that was given special importance as crucial foundation and inexhaustible capital which could be topped up further endlessly. The Bank executives ranging from the President to the Branch Management were jointly responsible for closely overseeing more than 93 schools nationwide under the project “KTB Dream School” and took part in CSER activities organized regularly and continuously such as Krung Thai Young Enterprise Awards, Krung Thai Business Ethics Initiative, KTB Lecture Series, Krung Thai Art Gallery and Krung Thai Growing Green projects. • Bank employees acknowledged and participated more in respective CSER activities judging from their attendance and support given to students activities under Krung Thai Dream School held regularly each

month at the Bank Head Office, application for membership in KTB Volunteers Club and warm participation in voluntary activities such as tree planting / reforestation, check-dam building, coral reef recovery and donation in kind for fund-raising sale as capital for club activities. Besides, Bank staff nationwide initiated CSER activities on appropriate occasions such as campaigns for global warming reduction and local culture and tradition promotion activities. • Scope of CSER operation was broadened through synergy with business alliances including subsidiaries and organizations in public and private sectors such as the Thai Environment Institute, the Stock Exchange of Thailand, Mahidol Withayanusorn School, Siam Cement Group, Infozafe Co., Ltd., Siam City Cement Plc., Writers Association, Journalists Association, Matichon Printing Office, Amarin Printing and The Nation resulting in higher efficiency and effectiveness of the operation with further top-up and expansion to the society on a broader scale. • The Bank conducted on-going and diversified CSER activities in four dimensions: education, society & environment, art & culture and sports. Almost 30 projects activities were carried out by the Bank and a large number of activities with the Bank’s financial support such as project on building of Maha Mandhop enshrining the Maha Suvarnapatimakor Buddha statue in honor of His Majesty the King on the occasion of His Majesty’s 80 th Birthday Celebration, support to the Amateur Boxing Association of Thailand, initial matching fund for establishment of His Venerable Buddha-Das Inthapanyo Archive and support to ChulaThammasat traditional football event. • Increased number of beneficiaries benefited directly and indirectly by the Bank’s CSER activities particularly students, teachers, instructors, parents,

65


schools, universities and communities as well as Bank clients and employees both of the Bank and subsidiaries. (Details of CSER operation by the Bank are elaborated in the 2008 Corporate Social and Environmental Responsibility Report, Krung Thai Bank Pcl. Or on website: http:// www.ktb.co.th)

Awards of Pride in 2008

Ann ual Report 2008 Krung Thai Bank Pcl.

The Bank’s performance in 2008 was still widely recognized by the general public with respect to its business operation through strict adherence to the principles of good corporate governance and the importance seriously attached to social and environmental responsibility as its continued mission to enable the business to grow together with the Thai society on sustainable basis. As a result, the Bank was presented with several awards of honor. Among the key awards are as follows: • SOE Award 2008 from the State Enterprise Policy Office, Ministry of Finance presented to the Bank for the Board of Directors’ role in promoting good corporate governance and performing its duty completely and efficiently such as participation in determining the Bank’s work plan, monitoring of key systems such as internal control system, risk management, information management, human resources management and monitoring of the organization’s operation encompassing financial and non-financial issues in regular and complete manner. Moreover, the Board actively promoted transparent disclosure of information as well. • Outstanding Social and Environmental Responsibility Awards 2008 presented to the Bank by the State Enterprise Policy Office, Ministry of Finance judging from the Bank’s clear policy on support of Bank employees’ participation and awareness of social and environmental responsibility and continued

66

CSER project implementation. • Shareholder Awards 2008 in the category of Distinctive Listed-Company for Shareholder Care. The Bank had been selected as one out of 10 companies receiving Shareholder Awards from the Thailand Securities Depository Co., Ltd. in conjunction with the Stock Exchange of Thailand, Thai Investors Association, Thai Listed Companies Association and Thai Investors Relation Club. • Corporate Governance Report of Thai Listed Company 5-Star Awards from the Thai Institute of Directors (IOD). Apart from the above awards of honor, the Bank in 2009 gained recognition from respective domestic and international institutions in several aspects such as: • Kaeng Khoi Branch, Saraburi Province, the Bank’ s first comprehensive energy saving branch was honored as a model energy saving building by the Ministry of Energy and in the process of assessment for award presentation as building with excellent energy-saving label. • The Bank was rated as the 9 th corporate business of Thailand with best disclosure of information on social and environment responsibility by CSR Asia Business Barometer 2008 The State of CSR Disclosure in Asia and ranked 41st among 4 countries in Southeast Asia namely Hong Kong, Singapore, Malaysia and Thailand. Krung Thai Bank was the only banking business in Thailand being rated at this time. • Mr. Apisak Tantivorawong, President of Krung Thai Bank Pcl. was selected and honored as a benefactor for youth in the educational and technical branch, individual category, by the Office of Welfare, Promotion, Protection and Empowerment of Vulnerable Groups, Ministry of Social Development and Human Security. He was praised and bestowed on him the plaque and certificate of honor by His Royal Highness Crown Prince


Maha Vajiralongkorn on the occasion of the National Youth’ s Day September 20, 2008. • Outstanding Booth Awards in the category of large space at Money Expo 2008 as an attractive booth judged by group of qualified art and architecture instructors from Silpakorn University, King MongKut‘s Institute of Technology Ladkrabang and Srinakharinwirot University Prasanmit.

Direction and business strategy within 3-5 years

The economy in 2009 is expected to face recession. Hence the Bank looks forward to strengthen its competency and be ready for competition under the vision of being “the Convenience Bank” for retail customers, business sector, government and institution. Action plans in the coming 3-5 years can be summarized as follows: Finance Strategy Focus on sustainable growth and profitability through quality credit expansion, deposit customer base broadening, continuous increase of feebased income in all service types, efficient cost-of-fund management to curb at low level, expedition of income boosting from investment and treasury as well as stressing importance to NPL reduction, aggressive NPA sale and acceleration of bad debt recovery. Customer Strategy Focus on customer satisfaction building through clear strategy formulation for each customer segment, developing financial products and innovations in direct response to customer needs, giving importance to service quality assurance while developing service channels and selling products that suit each client segment’s lifestyle as well as continuously developing customer relationship management to enable efficient customer services. Internal Process Strategy Focus on development of internal procedures to

support finance and customer strategies through enhancing major business and management processes as well as risk control for better efficiency. Organization structure will also be developed for preparation of competition. Learning and Development Strategy Focus on continuous human resources development for higher quality and efficiency by giving significance to staff recruitment and competency development, developing and enhancing the organization and business process to be able to cope with the fast changing environment as well as developing operation process to be in line with corporate governance principles and supporting CSER activities continuously within the framework of intellectual capital building in four dimensions: education, society and environment , art & culture and sports. Key Projects in 2009 comprise the following: • Branding Positioning to reaffirm acknowledgement of being the Convenience Bank. • Channel & Network Expansion/ Enhancement to provide each customer segment with more convenience and comfort. • Operation Centralization to boost operational efficiency and build customer satisfaction. • Customer Relations Management (CRM) to focus on customer centric service providing. • Corporate Social & Environmental Responsibility (CSER) aiming at stable and sustainable growth.

67


Shareholding and Management Structures

Ann ual Report 2008 Krung Thai Bank Pcl.

1. Shareholding Structure

Shareholders as at April 8, 2008 (share register closing date) Shareholders

Number of Shares Ordinary

Preferred

Total

%

1) The Financial Institutions Development Fund 6,184,072,567 - 6,184,072,567 55.29 2) Thai NVDR Co., Ltd. 434,455,657 60 434,455,717 3.88 3) Littledown Nominees Limited 342,372,200 - 342,372,200 3.06 4) Vayupaksa Mutual Fund 1 managed by MFC 257,505,058 2,726,095 260,231,153 2.33 5) Vayupaksa Mutual Fund 1 managed by KTAM 257,505,057 2,726,095 260,231,152 2.33 6) Chase Nominees Limited 1 141,154,800 - 141,154,800 1.26 7) State Street Bank and Trust Co. for London 131,696,030 - 131,696,030 1.18 8) Littledown Nominees Limited 7 128,230,900 - 128,230,900 1.15 9) HSBC (Singapore) Nominees Pte. Ltd. 121,452,075 - 121,452,075 1.09 10) State Street Bank and Trust Company 117,722,377 - 117,722,377 1.05 11) Other shareholders 3,063,582,279 47,750 3,063,630,029 27.38 Total 11,179,749,000 5,500,000 11,185,249,000 100.00 Notes: Investors can look up the latest shareholding structure at www.ktb.co.th before the 2009 Annual Ordinary General Meeting.

2. Management Structure

The Bank has complied with the guidelines for the Structure of the Board of Directors in promoting corporate governance of commercial banks as follows:

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have the second vote for a decision. 2) Any director who has his own interest in the matter discussed in the Board meeting is 2.1.1 The Board of Directors The Board of Directors assumes full prohibited from casting vote on such issue. In authority in the management and oversees this case, the Chairman may request such that the operation of commercial banking director to temporarily leave the meeting. business complies with the objectives, the 3) All business activities of the Bank shall Bank’s Articles of Association and the be under the authority of the Board of resolutions of the shareholders meetings, Directors. Either the Chairman or the all of which be under relevant laws and President, or at least two other directors as regulations. The authority and responsibilities delegated by the Board have the authority to sign and affix the Bank’s official seal on behalf include: of the Bank. 4) The Board of Directors has the authority Responsibilities 1) Oversee and manage the Bank’s to appoint the General Manager and staff business in accordance with the objectives, members as well as agent of the Bank with the the Bank’s Articles of Association and the authority and duty as the Board deems resolutions of the shareholders meeting as appropriate. Remuneration, expenses and well as supervising the Bank’s various benefits as well as removal of such persons from office are also within the authority. operations. 2) Meet at least once a month and there 5) The Board of Directors can empower must be at least half of the total directors the General Manager to appoint and revoke attending. The majority vote shall be taken as the appointment of the staff members of the Bank. If the General Manager is also a director the resolution of the meeting. 3) Call an annual ordinary general of the Board of Directors, he is named meeting within four months from the closing of “President”. accounting period. Other general meetings 6) The Board of Directors has the authority may be called anytime as extra ordinary to invite any person, as it deems appropriate, meeting when the Board deems appropriate to be an advisor assisting the Board on or within one month from the date of banking business as well as determining wages and remuneration for the advisor. shareholder’s written request. 4) Despite Board vacancy, the subsisting directors can still perform the duty. However, Scope of Authority if the number of directors does not constitute As stipulated in the Bank’s Articles of a quorum, the remaining directors can Association and the Public Limited Company Act, only call a general meeting to elect new B.E.2535 (1992), the Board of Directors can process the following issues only upon receiving candidates to fill all the vacancies. 5) Comply with the Code of Best Practice approval from the Bank’s general meeting. 1) Approval of the balance sheets and the of Directors of Listed Companies. profit and loss statements. 2) Approval of the profit appropriation. Authority 1) Each director can cast one vote and 3) Election of new directors replacing those the majority vote shall be taken as the who completed their term of office or election of resolution of the Board meeting. In case of additional directors when there is an increase in equal votes, the Chairman of the Board shall the total number of directors.

2.1 Scope of Authority and Responsibility and Members of Each Committee

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Ann ual Report 2008 Krung Thai Bank Pcl.

4) Appointment of the Bank’s auditor and fixing their audit fee. 5) Increase of capital, reduction of capital and transfer of allowance for compensation of accumulated loss, dividend payment, public offering or allocation of capitalized shares and issuance of debentures. 6) Sale or transfer of the Bank’s entire business or some material parts, acquisition or acceptance of transfer of other business, amendment or termination of agreement relating to renting out partial or the entire Bank’s business. Members of the Board of Directors as at December 31, 2008 1) Mr. Suparut Kawatkul Chairman 2) Dr. Chaiyawat Wibulswasdi Vice Chairman 3) Mr. Aswin Kongsiri Director 4) Mr. Santi Vilassakdanont Director and Independent Director 5) Mr. Suri Buakhom Director and Independent Director 6) Mr. Pachara Yutidhammadamrong Director and Independent Director 7) Mr. Sima Simananta Director and Chairman of the Independent Directors 8) Dr. Jamlong Atikul Director 9) Mr. Visut Montrivat Director and Independent Director 10) Mr. Dusit Nontanakorn Director and Independent Director 11) Dr. Pichit Likitkijsomboon Director and Independent Director 12) Mr. Apisak Tantivorawong President 13) Ms. Patcharasiri Kiatkumjai Secretary 14) Mr. Suchart Dejittirut Assistant Secretary Details of changes of Directorship 1) Ms. Tanya Sirivedhin Completed term of office as of April 25, 2008 2) Dr. Pichit Likitkijsomboon Took position on April 25, 2008 to replace Ms. Tanya Sirivedhin

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Director from Major Shareholders Mr. Aswin Kongsiri is the representative from the major shareholder group (FIDF). He is not eligible to sign on behalf of the Bank. President Authority and Responsibility The President is empowered to conduct business in accordance with the established policies and targets set by the Board of Directors and strictly manage operation according to plans or budget approved by the Board. The President shall perform his duties honestly and cautiously while safeguarding the interest of the Bank and the shareholders.

Authorized Directors Mr. Suparut Kawatkul, Chairman of the Board of Directors or Mr. Apisak Tantivorawong are authorized to sign on behalf of the Bank solely or Mr. Chaiyawat Wibulswasdi jointly with Mr. Jamlong Atikul and affixed with the Bank’s official seal. 2.1.2 The Board of Executive Directors Authority and Responsibility The Board of Directors has empowered the Board of Executive Directors with the following duties: 1) Approve credit, debt restructuring and debt write-off within the authority. 2) Approve investment or sales of


securities invested by the Bank, trading or renting out Banks’ property within the authority. 3) Approve the appointment of executives. 4) Approve the hiring of consultant and procurement in accordance with the procedures. 5) Scrutiny business plan, policy tasks and annual budget as well as monitoring significant assignments.

6) Approve or acknowledge other businesses relating to management that deemed necessary, appropriate or urgent to resolve problems that may damage the Bank if unattended. Report such issue promptly to the Board of Directors. 7) Perform other task assigned by the Board of Directors.

The Board of Executive Directors as at December 31, 2008 1) Dr. Chaiyawat Wilbulswasdi Chairman 2) Mr. Aswin Kongsiri Director 3) Dr. Jamlong Atikul Director 4) Mr. Apisak Tantivorawong Director 5) Ms. Patcharasiri Kiatkumjai Secretary 6) Mr. Suchart Dejittirut Assistant Secretary transparency of the Bank’s disclosure of 2.1.3 The Audit Committee information and accounting procedures. Authority and Responsibility 1. Financial Reporting and Public (4) Review the evidences in case of doubt about operation that may significantly Disclosure (1) Review the Bank’s financial reports affect the Bank’s business or conflict of interest to ensure their adequacy, accuracy and that may have negative impact on the Bank’s reliability in accordance with the generally operation. (5) See that the information submitted to accepted accounting principles. (2) Review with the Bank’s auditor key the regulator is in line with that in the financial issues that may adversely affect the reliability reports. of the financial reports such as: - Significant difficulties or conflicts 2. Internal Control encountered during the course of the audit. (1) Review the internal control system to - Different facts and opinions ensure its effectiveness in accordance with the between the auditor and the management. standards of the Committee of Sponsoring - Effectiveness of internal control. Organizations of Treadway Commission (COSO). - Deficiencies or losses found in Internal auditor must assess the entire internal the current accounting period and the control system at least once a year in addition to the possibility to recur in the following periods. assessment of financial reporting with the Bank’s - The draft of the annual financial auditor. statements and notes to the financial (2) Review the appropriateness and statements. effectiveness of risk management, internal control of - The auditor’s report. the Bank’s IT system and its security including (3) Review any related transactions or business continuity plan. transactions that may cause conflict of interest so as to ensure accuracy, completeness and

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3. The Auditor (1) Ensure independence of the auditor. (2) Review the scope of work of the auditor and internal auditors to avoid duplication of work in financial auditing with due consideration of efficiency in the use of resources in the audit process. (3) Consider the appointment and remuneration of the auditor for submission to the general meeting. (4) Review the annual audit report of the Office of the Auditor General of Thailand and may suggest review or audit of any transactions deemed necessary and material together with presentation of crucial recommendations to the Board of Directors. 4. The Internal Auditor (1) Ensure independence of the internal auditor. (2) Directly supervise the Internal Audit Group. However, the management of the Internal Audit Group shall report directly to the President. (3) Oversee the Internal Audit Group to adhere to moral ethics and corporate governance with generally accepted audit standards as well as examine and review code of business conduct of audit officers prior to submission to the Board of Directors for approval. (4) Regularly examine and review the Charter of the Internal Audit Group. (5) Consider and approve the strategic plan for internal audit, organization structure, manpower staffing, annual internal audit program as well as budget used in auditing aiming at efficiency and effectiveness including their prioritization with regard to risk levels. (6) Review the internal audit reports and call closed-door meetings with the management of the Internal Audit Group in order to examine any interference from the executives and the management that may have negative impact on the independence and free will of the internal auditor. (7) Review with the Internal Audit Group Managing Director the Utilization of the Bank’s resources to be in line with the established policy or operating manual. (8) Review and consider with the management the material deficiencies found from auditing and their responses.

(9) Submit the opinions to the Board of Directors concerning the appointment, transfer, dismissal, remuneration fixing and performance of the Internal Audit Group Managing Director and all those of the internal auditors of the Internal Audit Group. (10) Assess the performance of the Internal Audit Group Managing Director. (11) Arrange for Independent Quality Assessment Review by external auditor at least every five years. 5. Regulatory Compliance Review all compliances with relevant laws, rules and regulations stipulated by the official authorities and the regulators so as to prevent penalty charges, warning or reputation of the Bank and its executives. 6. Risk Management (1) Review crucial risk levels and risk assessment methods used by the internal auditor and the Bank’s auditor whether they are adequate and up to standards. (2) Review whether the Bank’s directors and top executives are well aware of key risks and those related to strategic risk, credit risk, market risk, liquidity risk and operational risk. 7. Performance Assessment Conduct self-assessment and the Board of Directors will appraise the Audit Committee’s annual performance. 8. Charter Review Review the Charter of the Audit Committee on regular basis for submission to the Board of Directors for approval. During 2008, the Charter of the Audit Committee was revised effective as of December 1, 2008. 9. Other Responsibilities (1) Have the authorization to audit or investigate concerned persons under the scope of authority and responsibility of the Audit Committee and to hire specialist to assist in auditing or investigation. (2) Perform other jobs as assigned by the Board of Directors and with consent from the Audit Committee.


The Audit Committee as at December 31, 2008 1) Mr. Pachara Yutidhammadamrong Chairman 2) Mr. Visut Montrivat Member 3) Mr. Dusit Nontanakorn Member 4) Ms. Pannipa Apichatabutra Secretary Details of changes of Audit Directorship 1) Ms. Tanya Sirivedhin Completed term of office as of April 25, 2008 2) Mr. Pachara Yutidhammadamrong Assumed Chairman of the Audit Committee on June 5, 2008 3) Mr. Dusit Nontanakorn Became a member of the Audit Committee on June 5, 2008 Member of the Audit Committee with knowledge and experience in review of financial statement: Mr. Visut Montrivat Member of the Audit Committee His brief biography with qualifications and experience in reviewing financial statements is shown in “Brief Biography of the Board of Directors and Executive Officers” on page 25-35. 2.1.4 The Nominating and Remuneration 4) Oversee that the size of the Board of Committee Directors is justifiable and appropriate for the Authority and Responsibility organization and the changing environment. 1) Set policy, criteria and procedure in 5) Activate the Board of Directors to select nominating and fixing remuneration including new director to replace the one that has other benefits for the directors and top completed term of office according to the executives. Articles of Association. 2) Recommend overall policy concerning 6) Oversee that the directors and top the fixing of remuneration and other benefits executives’ remunerations are justifiable and of the Bank. appropriate with their duties and 3) Recruit and select applicants with responsibilities. qualifications according to rules and relevant 7) Set up guidelines for assessing the laws, and present the selected applicants to performance of the top executives. the Board of Directors for consideration as 8) Perform other tasks as assigned by the directors or top executives. Board of Directors. The Nominating and Remuneration Committee as at December 31, 2008 1) Mr. Sima Simananta Chairman 2) Mr. Santi Vilassakdanont Member 3) Mr. Suri Buakhom Member 4) Ms. Sumana Vonggapan Secretary

2.1.5 The Corporate Governance and Social and Environmental Responsibility Committee Authority and Responsibility 1) Present policy on corporate governance and social and environmental responsibility of the Bank and its subsidiaries to the Board of Directors. 2) Oversee that the Bank’s operations

are in compliance with the principles of corporate governance stipulated by the regulators such as the Bank of Thailand, the Stock Exchange of Thailand and the Office of Securities and Exchange Commission, together with bearing social and environmental responsibility. 3) Regularly review the Bank’s corporate governance & social and environmental

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responsibility policy to be in consonance with international practices and recommendations of related institutions. 4) Recommend Code of Best Practices or Board of Directors Charter to the Board of Directors as well as other committees established. 5) Recommend Code of Business Conduct of the Bank and Code of Practices for executives and staff members.

6) Encourage good corporate governance culture and participation in social and environmental activities for sustainable development which must be understood and carried out effectively at all levels. 7) Nominate subcommittee to support corporate governance and social and environmental responsibility work as deemed appropriate.

Ann ual Report 2008 Krung Thai Bank Pcl.

The Corporate Governance and Social and Environmental Responsibility Committee as at December 31, 2008: 1) Mr. Santi Vilassakdanont Chairman 2) Mr. Sima Simananta Member 3) Mr. Suri Buakhom Member 4) Dr. Pichit Likitkijsomboon Member 5) Mr. Chaianun Siravanichkarn Secretary 6) Mr. Phisek Phonakorn Assistant Secretary 7) Mr. Adisorn Anutarapong Assistant Secretary

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Detail of changes of Directorship 1) Mr. Dusit Nontanakorn 2) Dr. Pichit Likitkijsomboon

2.1.6 The Independent Directors Committee Definition Independent Director must not have any business or work related to commercial bank that might have an impact on his or her independent decision-making and must have additional qualifications as follows: (a) Not holding more than 0.5 percent of the total number of voting shares of the Bank or the Bank’s parent company, subsidiary, associated company, major shareholder or any person with control power over the Bank including shares held by any related person of such an independent director. (b) Not be and have not been a director taking part in the management of the Bank, or an employee or an officer of the Bank, or an advisor of the Bank receiving regular salary from the Bank, and not be and have not been a person with control power over the Bank or the Bank’s parent company, subsidiary, or associated company, or a subsidiary of another company in the same level of the

Resigned from office on June 5, 2008 Took up office on June 5, 2008 Bank, unless such an independent director has not been a person referred to above for at least two years prior to the date on which the application for being an independent director is filed with the Office of the Securities and Exchange Commission. Such restriction or prohibition shall not apply to an independent director who has been a government officer or an advisor of a government authority, which is the major shareholder of the Bank or the person with control power over the Bank. (c) Not be a person having relationship either through blood or lineage or legal registration as a father, mother, spouse, sibling or child, including as a spouse of a child of any management person or major shareholder of the Bank or the Bank’s subsidiary, or of any person with power to control the Bank or the Bank’s subsidiary, or of the person being nominated to be a management person of or a person having power to control the Bank or the Bank’s subsidiary. (d) Not having and have not had any business relationship with the Bank or the


Bank’s parent company, subsidiary, associated company, or major shareholder, or with the person with control power of the Bank that may have conflict of interest, in the manner in which his/her independent discretion might be affected, and not be and have not been a substantial shareholder of or a person with power to control the person that has business relationship with the Bank or the Bank’s parent company, subsidiary, associated company, or major shareholder, or person with control power over the Bank unless such an independent director has not been a person referred to above for at least two years prior to the date on which the application for being an independent director is filed with the Office of Securities and Exchange Commission. Business relationship referred to the first paragraph above shall mean to include any ordinary course of business or trade for business engagement purpose, any lease taking or lease out of any property, any transaction relating to asset or services, any financial support by way of either borrowing, lending, guaranteeing or collateral providing or any other manner similar thereto that could result to an obligation required to be performed by the Bank or the party thereto in an amount of three percent or more of the net tangible asset value of the Bank or twenty million Baht or more, whichever is lesser. In point of this, the method for calculation of the value of connected transaction pursuant to the Capital Market Supervising Committee’s Notification, Re: Regulations in respect of an Entering into a Connected Transaction shall be applied mutatis mutandis for the purpose of calculation of such amount of debt of the Bank, provided that the amount of debt incurred during the past one year prior to the date on which such a business relationship with such person exists. (e) Not be and have not been an auditor of the Bank or the Bank’s parent company, subsidiary, associated company, or major shareholder, or of any of the person with control power over the Bank, and not be and

have not been a substantial shareholder of, a person with power to control over, or a partner of any auditing firm or office in which the auditor of the Bank or the Bank’s parent company, subsidiary, associated company, or major shareholder, or the person with control power over the Bank is working, unless such an independent director has not been a person referred to above for at least two years prior to the date on which the application for being an independent director is filed with the Office of the Securities and Exchange Commission. (f) Not be and have not been a professional advisor, including legal or financial advisor who receives fee of more than two million Baht a year from the Bank or the Bank’s parent company, subsidiary, associated company, or major shareholder, or from the person with control power over the Bank and not be and have not been a substantial shareholder of, a person with control power or a partner of any of such professional service provider firm or office, unless such an independent director has not been a person referred to above for at least two years prior to the date of on which the application for being an independent director is filed with the Office of the Securities and Exchange Commission. (g) Not a director appointed as a representative of a director of the Bank, a representative of a major shareholder of the Bank, or a representative of a shareholder of the Bank which is a related person of the major shareholder of the Bank. (h) Not engage in any business of the same nature of which is the same as that of the Bank or the Bank’s subsidiary and which, in any material respect, is competitive with the business of the Bank or the Bank’s subsidiary, or not be a substantial partner in a partnership, a director taking part in the management, an employee or officer, an advisor receiving regular salary from, or a shareholder holding more than one percent of the voting shares of a company engaging in any business the nature of which is the same as that of the Bank or the Bank’s subsidiary and which, in any material respect, is competitive with the business of the Bank or the Bank’s subsidiary. (i) Having no other characteristics by which

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Ann ual Report 2008 Krung Thai Bank Pcl.

his/her independent comment or opinions on the Bank’s operation may be affected. (j) Must be person who has already passed through the process of nomination by the Board of Directors or the Nominating and Remuneration Committee. If a person having qualifications stated in (a) to (j) above is appointed as an independent director of the Bank, such appointed independent director may be assigned by the Bank’s Board of Directors to make decision in respect of business operation of the Bank, or the Bank’s parent company, subsidiary, associated company, or a subsidiary of another company in the same level of the Bank, the major shareholder of the Bank, or the person having control power over the Bank, provided that such decision made by such appointed independent director must always be made on a collective decision basis. Statement as referred to the first paragraph of (b) (d) (e) and (f) and specified for the

consideration of qualification of the Bank’s Independent Director shall be effective from July 1, 2010 onwards. Furthermore, in case of the Capital Market Supervisory Board/the Office of the Securities and Exchange Commission announcing the improvement/flexibility of the regulation of Independent Director’s qualification, that shall be applied afterwards. Scope of Authority 1) Recommend agenda of meeting to the Chairman of the Board of Directors in case of deeming it material or issues that should be considered by the Board and not yet included on the agenda. 2) Providing opinions to the Chairman of the Board of Directors with regard to the role and performance of the Board. 3) Support the Board of Directors in boosting efficiency in complying with the principles of good corporate governance.

The Independent Director Committee as at December 31, 2008: 1) Mr. Sima Simananta Chairman 2) Mr. Santi Vilassakdanont Independent Director 3) Mr. Suri Buakhom Independent Director 4) Mr. Pachara Yutidhammadamrong Independent Director 5) Mr. Visut Montrivat Independent Director 6) Mr. Dusit Nontanakorn Independent Director 7) Dr. Pichit Likitkijsomboon Independent Director 8) Ms. Patcharasiri Kiatkumjai Secretary Detail of changes of Independent Directorship 1) Ms. Tanya Sirivedhin Completed term of office as of April 25, 2008 2) Dr. Pichit Likitkijsomboon Assumed Independent Director on June 5, 2008 None of the Bank’s Independent Directors holds position of Independent Director in other main company, subsidiary or associated company.

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Apart from the above six main committees, the Bank has appointed executives with knowledge and appropriate expertise to serve in various committees to scrutinize crucial issues that the Bank needs to give closer and sound supervision namely: • Executive Committee (Exec. Comm.) Formulate the Bank’s policy on credit, liquidity management, investment in financial

and capital markets, interest rates, foreign exchange rates, products and compliance with the policies established by the Board of Directors and the Board of Executive Directors as well as other activities. The committee meets on a weekly basis. • Risk Management Committee (RMC) Chaired by the President, RMC sets policies and strategies in managing all types of


risks. Meeting is called at least once a month and report is made to the Audit Committee every month and to the Board of Directors every quarter for acknowledgment or consideration. • Investment Committee (IC) IC manages the Bank’s investment in equity and debt instruments, approves investment within the limits set by the Board of Directors and reviews investment that exceeds its limit. In addition IC controls investment management and risk pertaining to trading of instruments which must be in accordance with the Bank’s policy and targets. Meeting is held at least once a month. • Assets and Liabilities Management Committee (ALCO) Formulate framework for managing the Bank’s assets, liabilities and capital funds. Recommend strategies and tools to be used for investment, fixing interest rates and returns on loans and deposits, foreign exchange rates and liquidity including the use of analytical tools to control and manage liquidity and interest rates to suit external factors affecting the Bank’s profitability. ALCO meets at least once a month and reports to the Board of Executive Directors for acknowledgement or decision-making. • Credit Committee (CC) Consider and approve lending limits and debt restructuring as stipulated in the Bank’s instruction on credit approval and debt restructuring, as well as acceptance of transfer of collateral and purchase of mortgaged properties from auction. CC meets at least once a week. • Credit Scrutiny Committee Scrutinize applications for credit and debt restructuring, approve credit limit and debt restructuring limit, trading of non-performing assets (NPAs), underwriting or investment in debt instruments except those issued by government, Bank of Thailand or other state

enterprises guaranteed by Ministry of Finance. This Committee also scrutinizes credit work under the authority of the Board of Executive Directors and the Board of Directors including credit approval cases needing credit procedure relaxation by reporting them to the Executive Committee for acknowledgement. Meeting is held at least once a week.

2.2 Nominating Directors and Executives

2.2.1 Selection of Directors The Bank has appointed the Nominating and Remuneration Committee to select and scrutinize applicant nominated for director. Such person must be qualified and not forbidden by the Standard Qualifications for State Enterprise Board Members and Staff Act, the Financial Institutions Business Act, the Securities and Exchange Act and other relevant applicable laws. The candidate must also have the required qualifications, skills, knowledge, competency and experience in the fields that are beneficial to the Bank. Name of candidate will be submitted to the general meeting via the Board of Directors. After approval of the appointment, the responsible business unit will proceed with the registration of director change and report it to the units concerned within the specified time. Directors who completed their term of office may be re-elected. Moreover, the Bank organizes orientation for new directors to inform them of their role, duty and responsibility as well as relevant rules and policies needed for the understanding of the Bank’s business operation. 2.2.2 Appointment of Director There are two cases: Case 1: Appointment of new director to replace the one who completed his or her term of office will be done in the shareholder general meeting. Director who completed his/ her term may be re-elected. Case 2: Appointment of director to replace the one who left prior to completion of term of office shall be made by the Board of Directors with voting of no less than three-fourths of the

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subsisting directors. Qualified person without any forbidden traits will be selected and will stay only for the remaining tenure of the director who left. 2.2.3 Rights of Minority Shareholders in Appointment of Director The general meeting of shareholders shall elect the Director on the following criteria: 1) One share equals one vote except preferred shares with provision of condition to have less voting right than ordinary shareholder. 2) Each shareholder may exercise all the votes to elect one person or several persons but is not entitled to divide the votes for any particular person. 3) Persons receiving the highest votes in descending order shall be elected. The number of directors to be elected depends on the vacancy at that time. In the event of a tied vote for the last opening, the Chairman of the general meeting shall cast the deciding vote. The Bank allows shareholders to add in the agenda item name of qualified applicant as director via the Bank’s website from October 1 to December 31 of each year prior to the annual general meeting. The named applicant will be scrutinized by the Nominating and Remuneration Committee and the Board of Directors with consent from the Bank of Thailand as prescribed in Section 25 of the Financial Institutions Business Act. Results will be notified through the Bank’s website and that of the Stock Exchange of Thailand in March of every year and will also notify on the date of the annual ordinary general meeting. 2.2.4 Selection of the President The Bank complied with the Standard Qualifications for State Enterprise Board Members and Staff Act B.E.2543 (2000) in holding a transparent process of selection. A public announcement will be made for the post giving an opportunity to qualified persons with knowledge, competency and experience in the management of large organization to apply. Then the Nominating and Remuneration Committee will select the appropriate person.

2.2.5 Selection of Group Executives The Nominating and Remuneration Committee will nominate in-bank person with knowledge and competency relating to the work under consideration. In the event that no appropriate person is available, it will nominate outsider with vision, knowledge and capability in managing banking business as well as having positive attitude toward the organization.

2.3 Directors Orientation

The Bank organizes Directors Orientation for newly appointed Directors to familiarize them with the business plan, products and services, capital and shareholding structure, organization structure and key legal issues necessary for performing the duty of director of a registered company. For 2008 orientation was given to the new director Dr. Pichit Likitkijsomboon. The topics presented covered: 1) Board of Directors structure and schedule for Board meeting 2) Calendar and agenda of the Board of Directors meeting 3) Standard agenda 4) Relevant laws 5) Capital and shareholding structures, certification letter, Memorandum of Association, Articles of Association and minutes of the shareholders general meeting 6) Assessment of the role of state enterprise board of directors by Thai Rating and Information Service Ltd. (TRIS) 7) Credit rating 8) Directors and officers liability insurance coverage 9) Audit reports of Bank of Thailand 10) Progress reports following audit results by the Bank of Thailand 11) Financial institution supervision under Basel II framework 12) Business Plan of the Bank 13) KTB Corporate War Room 14) Directorship in subsidiaries, associated and related companies 15) Organization structure and list of executive officers 16) Fire escape plan of Nana Nua Building


99.2 percent for the first and second times respectively with average score at 98.7 percent. Most of the Directors were of the opinion that each Director must be accountable for the accuracy and completeness of financial reports and the general information disclosed to the stakeholders on equitable and fair basis. 3) Inter-assessment of individual Director comprises queries that promote the principles of good corporate governance whereby Directors are able to express their opinions that are useful to the stakeholders, such as opinions and recommendations that do not contradict the best practices yet are beneficial 2.4 Assessment of the Board of Directors, to the Bank, independent and creative expression of opinions, useful information President and Group Executives 2.4.1 Self-Assessment of the Board of for the Board’s decision-making and responsibility to the stakeholders leading to Directors The Bank requires the Board of Directors accurate and equitable treatment. to perform self-assessment twice a year so as The overall assessments in 2008 were to reflect operation efficiency under the excellent at 99.2 percent and 99.6 percent for principles of good corporate governance. This the first and second times respectively with self-assessment has three types: self- average score at 99.4 percent. Most of the assessment of the entire Board of Directors, Directors expressed their opinions that self-assessment of individual Director and recommendations of each Director helped to inter-assessment of individual Director. promote the principles of good corporate governance and were useful to the Bank. Criteria as follow: 1) Self-assessment of the entire Board of Moreover, the Directors’ opinions were Directors consists of four areas namely Board independent and creative in various Policy, Board Composition, Board Practices perspectives that will lead to proper practices. The Bank concluded the assessment and Board Meeting. The overall assessment results for the four results to all the Directors for areas in 2008 were excellent at 93.8 percent acknowledgement as a move toward creation and 96.2 percent for the first and second of good corporate governance across the times respectively with average score at 95.0 board and continuous business growth with percent. Majority of the Directors were of the efficient, transparent and fair management opinion that the number of Directors was thus creating confidence to all concerned. appropriate for the business size and the number of Independent Directors was more 2.4.2 Assessment of the President than half the total number of Directors making The Bank kept the same guidelines and it adequate to oversee the material issues criteria for assessing the President as in 2007 prudently. with two assessments annually during 2) Self-assessment of the individual January-June and July-December under Director covers six areas namely following procedures: Accountability, Responsibility, Equitable 1) The Nominating and Remuneration Treatment, Transparency, Vision to Create Committee will assess the performance by comparing it with the key performance Long Term Value and Ethics. The overall assessments for the six areas indicator (KPI) as specified in the strategies in 2008 were excellent at 98.2 percent and and targets of each year. Additional activities were also organized for the new director in accordance with best practices as follows: - Visit various departments in Head Office, Nana Nua Building and Sukhumvit Building. - Off-sight Board meeting at Chiang Mai Province, visiting sub-branches at Big C Hang Dong, Tesco Lotus Chiang Mai Hang Dong, Central Airport Plaza Chiang Mai and Kad Suan Kaew Shopping Center. Programs included observing their various work systems with discussions for work improvement which the business units concerned have to follow up.

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Ann ual Report 2008 Krung Thai Bank Pcl.

2) The Nominating and Remuneration Committee submits the performance assessment to the Board of Directors for approval. 3) The Nominating and Remuneration Committee informs the President of the assessment results. 2.4.3 Assessment of Group Executives The Bank requires assessment of Group Executives twice a year during January-June and July-December in the same manner as the assessment of the President. 1) The Group Executive Performance Assessment Committee will assess the performance of Group Executives as follows: (1) Compare the performance under consideration with the key performance indicator (KPI) that has been agreed upon with the President (70 percent weighted). (2) Management competency scores assessed by supervisor and colleagues (30

Name of Director

percent weighted). 2) The Group Executive Performance Assessment Committee submits the assessment to the Nominating and Remuneration Committee for approval. 3) The Nominating and Remuneration Committee submits the assessment further to the Board of Director for approval. 4) The Nominating and Remuneration Committee informs the Group Executives of their assessment results. 2.5 Board of Directors Meeting The Board of Directors in 2008 called 25 meetings, the Board of Executive Directors 52 meetings, the Audit Committee 11 meetings, the Nominating and Remuneration Committee 11 meetings, the Corporate Governance and Social and Environmental Responsibility Committee 11 meetings and the Independent Directors Committee 3 meetings. Details of each Director’s attendance are as follows:

Nominating CG and Independent and Audit Board of Board of Director Executive Committee Remuneration CSER Directors Committee Committee Directors Committee

1 Mr. Suparut Kawatkul 21/25 - - - - - 2 Dr. Chaiyawat Wibulswasdi 25/25 52/52 - - - - 3 Mr. Aswin Kongsiri 23/25 46/52 - - - - 4 Mr. Santi Vilassakdanont 22/25 - - 11/11 11/11 3/3 5 Mr. Suri Buakhom 25/25 - - 11/11 11/11 3/3 6 Mr. Pachara Yutidhammadamrong 23/25 - 10/11 - - 3/3 7 Mr. Sima Simananta 24/25 - - 11/11 11/11 3/3 8 Dr. Jamlong Atikul 25/25 52/52 - - - - 9 Mr. Visut Montrivat 24/25 - 11/11 - - 3/3 10 Mr. Dusit Nonthanakorn 23/25 - 7/7 - 4/5 3/3 11 Dr. Pichit Likitkijsomboon 17/17 - - - 6/6 2/2 12 Mr. Apisak Tantivorawong 24/25 48/52 - - - - Director resigned during the year 1 Ms. Tanya Sirivedhin 6/8 - 4/4 - - 1/1 (resigned on completion of term) Note: Number in the table refers to number of attendance/number of Board Meeting held while acting as Director

2.6 Corporate Secretary

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The Bank has assigned Ms. Patcharasiri Kiatkumjai, First Executive Vice President Managing Director of the Risk Management and Compliance Group to be the Secretary to

the Board of Directors, the Board of Executive Directors and Independent Directors Committee as well as the Corporate Secretary. The Office of the Board of Directors and Shareholders serves as support unit so as to


comply with the Securities and Exchange Act (No.4) B.E. 2551 (2008) and the principles of good corporate governance. Main duties and responsibilities include: 1) Oversee activities of the Board of Directors to be in compliance with the relevant applicable laws, rules and regulations. 2) Organize shareholders general meeting and the Board meeting to be in compliance with the relevant laws and the Bank’s Articles of Association and monitoring those actions taken according to the meeting resolution for accuracy and compliance. 3) Prepare and retain the following documents: - Director registration - Notice of board meeting to Directors, minutes of the Board of Directors meeting and the annual report of the company.

- Notice of shareholders general meeting and minutes of such meeting. 4) Retain the reports on interest reported by Directors and executives. 5) Monitor the actions taken in accordance with the resolutions of the Board of Directors meeting and shareholders meeting. 6) Provide appropriate recommendations to Directors concerning legal matter, rules and regulations of the Bank. 7) Oversee corporate governance issues. 8) Acting as a consultant and coordinator with secretaries of respective committees of the Bank. 9) Communicate with the shareholders to inform them of their rights and news of the Bank. 10) Take any other actions are prescribed by the Capital Market Supervisory Board. 2.7 Shareholding of the Board of Directors and Executives as at December 31, 2008

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

Name

Position

Mr. Suparut Kawatkul Chairman Dr. Chaiyawat Wibulswasdi Vice Chairman Mr. Apisak Tantivorawong President Mr. Aswin Kongsiri Director Mr. Santi Vilassakdanont Director Mr. Suri Buakhom Director Mr. Pachara Yutidhammadamrong Director Mr. Sima Simananta Director Dr. Jamlong Atikul Director Mr. Visut Montrivat Director Mr. Dusit Nontanakorn Director Dr. Pichit Likitkijsomboon Director Dr. Pongsathorn Siriyodhin FSEVP Mr. Wanchai Thanittiraporn SEVP Ms. Kittiya Todhanakasem SEVP Ms. Nongnutch Thienpaitoon SEVP Ms. Sumana Vonggapan SEVP Mr. Preecha Phukham SEVP Ms. Sompis Charoenkiatikul FEVP Mr. Teerapol Pussadet FEVP Mr. Assanee Subvanich FEVP Ms. Pannipa Apichatabutra FEVP Mr. Prasert Thiranakanat FEVP Ms. Patcharasiri Kiatkumjai FEVP Dr. Anuchit Anuchitanukul FEVP

KTB Shares Held Own

Spouse

Child

Total

%

0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

0 0 0 0 0 0 0 0 0 80,276 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

0 0 0 0 0 0 0 0 0 80,276 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

0.000000 0.000000 0.000000 0.000000 0.000000 0.000000 0.000000 0.000000 0.000000 0.000718 0.000000 0.000000 0.000000 0.000000 0.000000 0.000000 0.000000 0.000000 0.000000 0.000000 0.000000 0.000000 0.000000 0.000000 0.000000

81


2.8 Informations of Directorship of Directors and Executives in Krung Thai Bank, Subsidiaries, Associated and Related Companies as at December 31. 2008

Ann ual Report 2008 Krung Thai Bank Pcl.

Name

Related Companies Subsidiaries(1) Associated Companies(2) KTB Other Companies(3) Companies with Joint Directors(4) 1 2 3 4 5 6 1 2 3 4 5 6 1 2 3 4 5 6 7 8 9 10 11 1 2 3 4 5 6 7 8 9

Directors Mr. Suparut Kawatkul XX X/ X/ Dr. Chaiyawat Wibulswasdi A Mr. Aswin Kongsiri /X/ X X/ X XX,X X X Mr. Santi Vilassakdanont X X/ C Mr. Suri Buakhom X XX X/ Mr. Pachara Yutidhammadamrong X Mr. Sima Simananta X X/ Dr. Jamlong Atikul /X/ /X/ Mr. Visut Montrivat X X Mr. Dusit Nontanakorn X Dr. Pichit Likitkijsomboon X Mr. Apisak Tantivorawong B X/ Group Managing Directors Dr. Pongsathorn Siriyodhin M XX X/ X/ Mr. Wanchai Thanittiraporn M X/ /X/ Ms. Kittiya Todhanakasem M X/ X/ Ms. Nongnutch Thienpaitoon M Ms. Sumana Vonggapan M X/ Mr. Preecha Phukham M X/ XX Ms. Sompis Charoenkiatikul M X/ Mr. Teerapol Pussadet M Mr. Assanee Subvanich M X/ Ms. Pannipa Apichatabutra M Mr. Prasert Thiranakanat M X/ Ms. Patcharasiri Kiatkumjai M X/ Dr. Anuchit Anuchitanukul M X/ X/ Sector Directors Mr. Kanoksak Soontornkitprapai Mi Ms. Sumalee Suksawang Mi Mr. Suwat Nestsawat Mi Mr. Suthee Tripornchaisak Mi Mr. Somchai Ngowwatana Mi X/ X/ Mr. Mitree Kor-udom Mi Mr. Suphat Intustitayakul Mi Ms. Lawan Baiyoke Mi Ms. Vannee Chareonthong Mi Mr. Prasit Wasupath Mi Mr. Somjit Pongpitakwises Mi Mr. Danai Smanot Mi Mr. Anantapol Punpeng Mi Mr. Weidt Nuchjalearn Mi Mr. Chairat Buchitratanakhun Mi Ms. Sriprabha Pringpong Mi Mr. Prasit Amporn Mi Ms. Arisara Dharamadhaj Mi X/ X/ X/ X/ X/ X/ X/ Dr. Wallop Lipiphun Mi Ms. Suwannee Sukhavachana Mi Mr. Voravut Tepkulmanon Mi Mr. Winit Sangaroon Mi Mr. Pichai Kojamitr Mi Ms. Wallaya Kaewrungruang Mi X/ Mr. Sutthichai Krairit Mi Mr. Chaianun Siravanichkarn Mi Ms. Taypee Srisukh Mi Ms. Tiparatana Nillkan Mi Mr. Verasak Prommas Mi Mr. Banphot Photchanasit Mi Mr. Wiwat Engsuwan Mi Mr. Tawan Puntawong Mi Mr. Udomsak Rojviboonchai Mi Mr. Weerachai Supaviratbuncha Mi Ms. Amara Klabprathum Mi Mr. Thirin Taothong Mi Mr. Dumrong Kaewprasith Mi Mr. Viruch Wongnirund Mi Note: Brief information on each person’s position is shown in “Brief Biography of Board of Directors and Executive Officers” and “Executives Directory”. Symbol XX = Chairman /X/ = Executive Director X/ = Director X = Independent Director M = Group Managing Director Mi = Sector Director A = Dr. Chaiyawat Wibulswasdi holds the following positions in KTB: B = Mr. Apisak Tantivorawong holds the following positions in KTB: C = Mr. Santi Vilassakdanont acting as President in Saha Pathana Inter-Holding Pcl. - President - Vice Chairman of the Board of Directors - Executive Director - Chairman of the Board of Executive Directors - Director - Director Definition (1) Subsidiary refers to a company in which the Bank’s shareholding exceeds 50 percent of paid-up capital and such company is under the Bank’s control excluding company in which the Bank has invested due to

82

troubled debt restructuring. (2) Associated company refers to a company in which the Bank’s shareholding is 20 percent and over but not more than 50 percent of paid-up capital and such company is under material influence of the Bank excluding company in which the Bank has invested due to troubled debt restructuring. (3) Other company refers to a company in which the Bank’s shareholding is 10 percent and over excluding company in which the Bank has invested due to troubled debt restructuring. (4) Company with Joint Directors refers to a company in which the Bank’s Director has directorship of the Board of Directors.


Name

Related Companies Companies with Joint Directors(4) Companies with Joint Senior Executives 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 1 2 3 4 5 6 7 8 9 10 11

Directors Mr. Suparut Kawatkul Dr. Chaiyawat Wibulswasdi Mr. Aswin Kongsiri Mr. Santi Vilassakdanont X/ Mr. Suri Buakhomww Mr. Pachara Yutidhammadamrong Mr. Sima Simananta Dr. Jamlong Atikul Mr. Visut Montrivat Mr. Dusit Nontanakorn Dr. Pichit Likitkijsomboon Mr. Apisak Tantivorawong Group Managing Directors Dr. Pongsathorn Siriyodhin Mr. Wanchai Thanittiraporn Ms. Kittiya Todhanakasem Ms. Nongnutch Thienpaitoon Ms. Sumana Vonggapan Mr. Preecha Phukham Ms. Sompis Charoenkiatikul Mr. Teerapol Pussadet Mr. Assanee Subvanich Ms. Pannipa Apichatabutra Mr. Prasert Thiranakanat Ms. Patcharasiri Kiatkumjai Dr. Anuchit Anuchitanukul Sector Directors Mr. Kanoksak Soontornkitprapai Ms. Sumalee Suksawang Mr. Suwat Nestsawat Mr. Suthee Tripornchaisak Mr. Somchai Ngowwatana Mr. Mitree Kor-udom Mr. Suphat Intustitayakul Ms. Lawan Baiyoke Ms. Vannee Chareonthong Mr. Prasit Wasupath Mr. Somjit Pongpitakwises Mr. Danai Smanot Mr. Anantapol Punpeng Mr. Weidt Nuchjalearn Mr. Chairat Buchitratanakhun Ms. Sriprabha Pringpong Mr. Prasit Amporn Ms. Arisara Dharamadhaj Dr. Wallop Lipiphun Ms. Suwannee Sukhavachana Mr. Voravut Tepkulmanon Mr. Winit Sangaroon Mr. Pichai Kojamitr Ms. Wallaya Kaewrungruang Mr. Sutthichai Krairit Mr. Chaianun Siravanichkarn Ms. Taypee Srisukh Ms. Tiparatana Nillkan Mr. Verasak Prommas Mr. Banphot Photchanasit Mr. Wiwat Engsuwan Mr. Tawan Puntawong Mr. Udomsak Rojviboonchai Mr. Weerachai Supaviratbuncha Ms. Amara Klabprathum Mr. Thirin Taothong Mr. Dumrong Kaewprasith Mr. Viruch Wongnirund

X X/ X/ X/ X/ X/ X/ XX,X

X/ X X/ X X

Subsidiaries Other Companies 1. Krung Thai Legal Services Co., Ltd. 1. Trinity Watthana Pcl. 2. Krung Thai General Business 2. Dhipaya Insurance Pcl. Services Co., Ltd. 3. Nok Airlines Co.,Ltd. 3. Krung Thai Asset Management Pcl. 4. Thai Water Works Associates Co.,Ltd. 4. Krung Thai Computer Services Co., Ltd. 5. Millenium Microtech (Thailand) Co.,Ltd. 5. Krung Thai Property Development Co., Ltd. 6. Millenium Microtech Holding (German) 7. Millennium Microtech (USA) 6. KTB Leasing Co., Ltd. 8. Bangkok Expressway Pcl. Associated Companies 9. Northern Bangkok Expressway Co.,Ltd. 1. Krungthai-AXA Life Insurance Co.,Ltd. 10. Thai Baroda Industries Ltd. 2. Krungthai Card Pcl. 11. Suvarnabhumi Airport Hotel Co.,Ltd. 3. Krungthai Panich Insurance Co.,Ltd. 4. Krungthai Charoensri Co.,Ltd. 5. Krung Thai IBJ Leasing Co.,Ltd. 6. KTB Securities Co.,Ltd.

X/

XX X/ X/ X/ X/ X/ Companies Related

Companies with Joint Directors 1. Thai Airways International Pcl. 2. Thai Asset Management Corporation 3. Electricity Generating Pcl. 4. OHTL Pcl. 5. Padaeng Industry Pcl. 6. CH. Karnchang Pcl. 7. Bangkok Aviation Fuel Services Pcl. 8. Thai Reinsurance Pcl. 9. Saha Pathana Inter-Holding Pcl. 10. Saha Pathana Group of Companies (33 Companies) 11. Sahacogen (Chonburi) Pcl. 12. Chumporn Palm Oil Industry Pcl. 13. RCL Pcl. 14. Crown Seal Pcl. 15. Wiik & Hoeglund Pcl.

X/

X/

X/ X/ X/ X/ X/ X/

X/

X/ X/

Companies with Joint Senior Executives 16. Loxley Pcl. 1. Bangkok Metro Pcl. 2. Internet Thailand Pcl. 17. 124 Communications Pcl. 18. S & P Syndicate Pcl. 3. World Flex Pcl. 19. Siam Future Development Pcl. 4. Advance Agro Pcl. 20. Indorama Polymers Pcl. 5. TPT Petrochemicals (Thailand) Pcl. 21. Thai Oil Pcl. [formerly named Tuntex Petrochemicals (Thailand) Pcl.] 22. Paiboon Insurance Co., Ltd. 6. PTP Utilities Co., Ltd. 23. The Krungthep Thanakom Co., Ltd. 7. Thai Nam Plastic Pcl. 24. Palang Sophon Limited 8. Kaset Thai Sugar Co., Ltd. 25. AK. Place Co., Ltd. 9. Thai Identity Sugar Co., Ltd. 26. Kompastra Co., Ltd. 10. Rhein Element International Co., Ltd. 27. Ton Poh Emerging Thailand Fund 11. Sri Siam Paper Pcl. 28. ECR Property ordinary Partnership 29. Thai Aviation Refuelling Co., Ltd. 30. Amata Coporation Pcl.

83


Analysis of Operating Performance and Financial Standing (Consolidated) Overview

In 2008, the Bank and its subsidiaries earned a profit before income tax of Baht 15,737 million, up from prior year by Baht 8,261 million or 110.50 percent higher. After deduction of income tax of Baht 3,465 million, there remained a net income of Baht 12,272 million, up by Baht 5,865 million or 91.54 percent.

Operating Performance

Ann ual Report 2008 Krung Thai Bank Pcl.

Income before income tax Less Income tax Net income

2008

2007

15,737 3,465 12,272

7,476 1,069 6,407

Million Baht Change Amount % 8,261 110.50 2,396 224.13 5,865 91.54

• Net Interest and Dividend Income

Net interest and dividend income of the Bank and its subsidiaries registered at Baht 45,816 million, up from 2007 by Baht 1,778 million or 4.04 percent due to the increase of interest income from loans by Baht 2,468 million or 4.57 percent and a decline of interest expense by Baht 2,506 million or 11.32 percent. However, interest and dividend income from interbank and money market items dropped by Baht 2,058 million or 33.21 percent and from investment dropped by Baht 1,138 million or 19.20 percent. As a result, net interest margin to performing assets dropped to 3.77 percent from 3.78 percent in previous year and average net interest margin to assets declined to 3.60 percent from 3.64 percent in prior year.

Net Interest and Dividend Income

Interest and dividend income - Loans - Interbank and money market items - Investments Less Total interest expense Net interest and dividend income Net interest margin (performing assets) (%)* Net interest margin (assets) (%)

2008

2007

56,520 4,139 4,790 19,633 45,816 3.77 3.60

54,052 6,197 5,928 22,139 44,038 3.78 3.64

Note: * Including dividend received but excluding lending fees

84

Million Baht Change Amount % 2,468 4.57 (2,058) (33.21) (1,138) (19.20) (2,506) (11.32) 1,778 4.04 (0.01) (0.04)


• Non-Interest Income

In 2008, the Bank and its subsidiaries’ non-interest income stood at Baht 11,158 million, up from previous year by Baht 130 million or 1.18 percent due to fees and service income increase of Baht 802 million or 11.25 percent and gain on exchange rose by Baht 480 million or 71.43 percent. However, the Bank experienced loss from investments by Baht 959 million from prior year’s gain of Baht 1,180 million due to the negative impact of US sub-prime problems.

Percentage Share of Non-Interest Income 19.21% 1.45% 10.33%

12.02% 2.41% 6.09% 64.67%

71.10%

6.51% -8.60%

2007

Reversal of loss from impairment of property Gain on Exchange

4.11% 10.70%

Other income

2008

Fees and service income Share of gain from investments on equily method

Net gain (loss) from investments

Non-Interest Expenses

Non-interest expenses in 2008 amounted to Baht 30,331 million, up from the prior year by Baht 2,316 million or 8.27 percent due to the increase of personnel expenses and other expenses to cover for business expansion. Meanwhile, the cost to income ratio in 2008 registered 53.73 percent, up by 51.48 percent from the previous year.

Percentage Share of Non-Interest Expenses 44.78%

45.47%

17.69% 8.86% 1.59% 14.37%

17.52% 8.23% 1.93% 13.70%

12.02%

13.84%

2007

2008

Personnel expenses Premises and equipment expenses Taxes and duties Fees and service expenses Contribution to the Financial Institutions Development Fund Other expenses

85


Bad Debts and Doubtful Accounts Expenses

Investment Expenses

In 2008, the Bank and subsidiaries provision for bad and doubtful accounts of Baht 10,906 million, down from prior year by Baht 8,669 million or 44.29 percent. A provision of Baht 500 million was set monthly for bad debts and doubtful accounts and during the year, an additional provision of Baht 4,906 million was set in accordance with prudent banking practices. In 2008 the capital asset expenses in the Bank’s financial statements registered Baht 1,516 million, up from the prior year by Baht 299 million or 24.57 percent. They were mainly expenses on the Bank’s network and service outlets expansion (opening of new branches and electronic service points) as well as standardizing branch design. Additionally, the Bank still had several IT projects in the pipeline to serve the clients such as CRM project, Processing Bank, TeleSelling Product, Mobile Banking and upgrading computer for higher efficiency.

Analysis of Financial Standing Ann ual Report 2008 Krung Thai Bank Pcl.

Total Assets

As at December 31, 2008 the total assets of the Bank and its subsidiaries registered Baht 1,330,376 million, up from the prior year-end by Baht 117,654 million or 9.70 percent. n Investments in Securities amounted to Baht 111,511 million, up from prior year- end by Baht 1,387 million or 1.26 percent attributing to increase of net current investments and net investments in subsidiaries and associated companies while net long-term investments declined.

Investments in Securities

December 31,2008 December 31,2007 Amount Net current investments Net long-term investments Net investments in subsidiaries and associated companies Total net investments

86

%

Amount

%

Million Baht Change Amount

%

45,405 40.72 21,251 19.30 24,154 113.66 59,918 53.73 83,532 75.85 (23,614) (28.27) 6,188 5.55 5,341 4.85 111,511 100.00 110,124 100.00

847 15.86 1,387 1.26

As at year-end 2008, investments in government and state enterprise bonds accounted for 56.31 percent followed by investments in equity securities and mutual funds 27.56 percent, foreign debt instruments 6.41 percent, investments in subsidiaries and associated companies 5.55 percent and investments in private debt instruments 4.17 percent. The Bank had no concentration of investments in any companies for more than 10 percent of investments value at cost (excluding investments in mutual funds, government and state enterprise bonds) as it diversified risk through investments in appropriate securities in line with the Bank policy focusing on investments in securities bearing acceptable and manageable risk. Moreover, the Bank already set aside adequate allowance for revaluation and impairment of securities in accordance with the accounting standard for investments.


Net Investments Classified27.56% by Investment Type 32.06%

27.56%

32.06%

5.55%

4.85%

December 2007 December 2007

4.85% 9.79%

3.21% 9.79%

5.55% 6.41%

4.17% 6.41%

50.09%

3.21%

December 2008 December 2008

4.17%

50.09%

56.31% 56.31% Government & state enterprise securities Government enterprise Private sector& state debt securities securities Foreign debt securities Private sector debt securities Investment in subsidiaries and Foreign debtcompanies securities associated Investment in subsidiaries Equity securities (includingandmutual associated funds) companies Equity securities (including mutual funds)

Loans as at December 31, 2008 totaled Baht 1,044,609 million (excluding interest

receivable and interbank and money market loans), up from previous year-end by Baht 88,660 million or 9.27 percent. The largest percentage share was still manufacturing and commercial loans.

Percentage Share of Loans Classified by Business Type

13.22% 13.22%

16.26%

3.20%

16.26%

3.20%

December 2007 December 2007

17.36% 17.36%

34.61% 34.61% 14.59%

12.59% 12.59%

2.73% 2.73%

33.98%

December 2008 December 2008

14.59%

15.35%

22.57%

15.35%

22.57%

13.54% 13.54%

33.98% Agriculture and mining Manufacturing and Agriculture commerce and mining Manufacturing and Real estate and commerce construction Real estate and Public utilities and services construction Housing loansand services Public utilities Others loans Housing Others

87


Assets Quality

89.52%

88.16%

Loans Classification Assets quality of the Bank and subsidiaries was better than prior year due to close monitoring of loans and expedition of instant debt restructuring 2.30%thus boosting 0.46% the percentage of loans classified as pass: 1.79% 0.44% 2.20% 2.93% Classification December DecemberLoans 6.68% 2007 89.52%2008 88.16% 1.79% 0.44% 2.93% 6.68%

December 2007

December 2008

5.52% Pass

2.30% 0.46% 2.20% 5.52%

Special mention Substandard Doubtful

Pass

Doubtful of loss

Special mention Substandard Ann ual Report 2008 Krung Thai Bank Pcl.

Doubtful Doubtful of loss

n Non-performing Loans (NPLs) As at December 31, 2008 the Bank and subsidiaries carried NPLs of Baht 85,448 million, declining from the prior year-end by Baht 10,716 million or 11.14 percent. As a result, NPLs to total loans accounted for 7.68 percent compared to 9.57 percent at previous year-end and net NPLs as at year-end 2008 registered Baht 58,813 million or 5.42 percent of total loans. As at December 31, 2008 the Bank’s NPLs stood at Baht 85,188 million, down from the prior year-end by Baht 10,896 million or 11.34 percent thus enabling NPLs to total loans to register 7.63 percent, down from 9.53 percent as at the previous year-end. Meanwhile, net NPLs dropped to Baht 58,712 million from Baht 67,492 million at the prior year-end or net NPLs to total loans declined to 5.39 percent from 6.89 percent as at the previous year-end.

Non-performing Loans

Net Non-performing Loans

(Bank’s Financial Statement)

(Bank’s Financial Statement)

96,084 mn. Baht 9.53%

67,492 mn. Baht 6.89%

7.63%

5.39% 85,188 mn. Baht

58,712 mn. Baht

96,084 mn. Baht

67,492 mn. Baht

9.53%

6.89%

7.63% 2008 December 2007 December

5.39% 2008 December 2007 December

85,188 mn. Baht

Volume of NPLs

58,712 mn. Baht

Ratio of NPLs to total loans

88

December 2007 December 2008

December 2007 December 2008 Volume of NPLs


n Allowance for Doubtful Accounts As at December 31, 2008 the Bank and subsidiaries’ allowance for doubtful account (including allowance for troubled debt restructuring) registered Baht 35,585 million, down by Baht 1,383 million or 3.74 percent from the prior year-end. n Troubled Debt Restructuring (TDR) As at December 31, 2008 the Bank made TDR agreements a total of 5,591 cases with book value of debt before TDR of Baht 41,404 million. Interest and principal totaling Baht 6,023 million was repaid while additional loans of Baht 6,420 million were made and bad debts from TDR posted at Baht 518 million.

Troubled Debt Restructuring (Bank’s Financial Statements)

Million Baht

December 31, 2008 December 31, 2007

Assets transferred Debt-equity swap Loan terms modification Combination of restructuring Total

Value of No. of Book Debt before Cases TDR 35 2,360 - - 1,124 9,558 4,432 29,486 5,591 41,404

No. of Cases 15 - 1,108 4,538 5,661

Change (%) Book Value of No. of Book Value of Debt before Cases Debt before TDR TDR 135 133.33 1,648.15 - - - 4,788 1.44 99.62 13,415 (2.34) 119.80 18,338 (1.24) 125.78

As at December 31, 2008 the Bank had outstanding loan balance of Baht 72,713 million for a total of 24,598 cases of restructured debtors. Of such outstanding debt, 480 cases for Baht 6,073 million were in the process of monitoring under new terms and conditions. n Properties Foreclosed As at year-end 2008, the Bank’s non-performing assets registered Baht 37,552 million, up by Baht 2,840 million or 8.18 percent from year-end 2007, most of which resulted from acceptance of asset transfer for debt repayment to resolve NPL problem and auctioned purchase of loan collateral mortgaged for further management. Such operation would enable the Bank to earn income from NPA sale as well.

Total Liabilities

As at December 31, 2008 total liabilities in consolidated financial statements stood at Baht 1,226,748 million, up by Baht 109,686 million or 9.82 percent from prior year-end. Deposits rose by Baht 62,545 million or 6.25 percent, most of which was the rise in savings deposits. Meanwhile, borrowing increased by Baht 49,844 million or 98.93 percent due to increase of bills of exchange and subordinated debenture.

89


Deposits Classified by Type December 31,2008 December 31,2007 Amount Demand deposits Savings deposits Time deposits - Less than 6 months - 6 months to less than one year - One year and over Total deposits Bill of exchange

%

Amount

%

Million Baht Change Amount

%

61,408 5.78 75,130 7.51 (13,722) (18.26) 532,079 50.04 489,338 48.90 42,741 8.73 469,729 44.18 436,203 43.59 33,526 7.69 196,653 18.49 196,386 19.62 267 0.14 83,863 7.89 63,938 6.39 19,925 31.16 189,213 17.80 175,879 17.58 13,334 7.58 1,063,216 100.00 1,000,671 100.00 62,545 6.25 57,067 14,990 42,077 280.70

Shareholders’ Equity

Ann ual Report 2008 Krung Thai Bank Pcl.

As at December 31, 2008 the shareholders’ equity in consolidated financial statements stood at Baht 103,628 million, rising from prior year-end by Baht 7,968 million or 8.33 percent due to the following key changes: n Revaluation deficit on investments amounted to Baht 564 million while revaluation surplus on investments as at prior year-end registered Baht 384 million. n Share book value at December 31, 2008 was Baht 9.26 per share, up from Baht 8.55 per share as at prior year-end or up by 8.30 percent.

• Off-Balance Sheet Items: Contingencies

As at December 31, 2008 the Bank and subsidiaries’ total contingencies in the consolidated financial statements posted at Baht 537,172 million, rising from the prior year-end by Baht 194,213 million or 56.63 percent. Such change was in accordance with the normal business operation.

Off-Balance Sheet Items: Contingencies

Million Baht

Change December 31, 2008 December 31, 2007 Amount % Avals to bills & guarantee of loans 5,263 6,128 (865) (14.12) Liabilities under unmatured import bills 88 127 (39) (30.71) Letters of credit 20,005 16,105 3,900 24.22 Other contingencies 511,816 320,599 191,217 59.64 Total contingencies 537,172 342,959 194,213 56.63

90


Liquidity Policy, Sources and Uses of Funds

n Liquidity The Bank’s liquidity management policy has been established to get various sources of funds ready for business expansion. The Assets and Liabilities Management Committee (ALCO) managed the Bank’s liquidity in accordance with the requirements prescribed by the Bank of Thailand. As at December 31, 2008 total loans to deposits ratio in the consolidated financial statements was 98.05 percent, up from 95.39 percent as at prior year-end. However, if included bills of exchange in deposits, total loans to deposits ratio would drop to 93.06 percent from 93.99 percent as at year-end 2007. n Sources and Uses of Funds Key sources of funds of the Bank and subsidiaries as at December 31, 2008 comprised 79.92 percent from deposits and remaining from other sources such as shareholders’ equity, borrowing through debt securities, and interbank borrowing. The Bank and subsidiaries used capital funds of 76.05 percent in lending, 8.38 percent in net investments and 6.99 percent in investment in interbank and money market items.

Sources of Funds

Uses of Funds 76.05% 2.83% 5.75%

79.92% 2.74%

December 2008

7.53% 2.02%

6.99% 8.38%

December 2008

7.79% Deposits

Net Interbank & money market items

Interbank & money market items

Net Investments

Loans

Net Loans

Others

Net NPA (Properties foreclosed)

Shareholders, equity

Others

91


Key Sources and Uses of Funds December 31, 2008 December 31, 2007 Amount

Loans - Not over one year - Over one year Less Unearned discounts Total loans* Deposits - Not over one year - Over one year Total deposits

%

Amount

%

Million Baht Change Amount

%

362,690 34.79 404,409 42.37 (41,719) (10.32) 681,919 65.41 551,540 57.78 130,379 23.64 2,111 0.20 1,378 0.15 733 53.19 1,042,498 100.00 954,571 100.00 87,927 9.21 1,033,157 97.17 940,040 93.94 93,117 9.91 30,059 2.83 60,631 6.06 (30,572) (50.42) 1,063,216 100.00 1,000,671 100.00 62,545 6.25

Note:* excluding accrued interest receivable and interbank and money market loans

Ann ual Report 2008 Krung Thai Bank Pcl.

Capital Funds to Risk Assets Ratio

As at December 31, 2008 the Bank’s statutory capital funds registered Baht 136,325 million or 13.08 percent of risk weighted BIS ratio, up from the prior year-end by Baht 7,825 million or 6.09 percent with tier 1 capital of Baht 101,011 million or 9.70 percent of the risk weighted BIS ratio which was higher than the BOT requirement of 4.25 percent.

Capital Funds to Risk Assets (Bank’s Financial Statement)

December 31, 2008 December 31, 2007 Tier-1 Capital Fund Tier-2 Capital Fund Total capital fund before less items Less Revaluation deficit (net) on Investments in available-for-sale equity securities Total capital fund Risk weighted assets

92

Amount

Amount

%

101,011 37,285 138,296

9.70 96,718 31,782 128,500

1,971 136,325 1,041,878

- 13.08 128,500 - 847,490

% 11.41

Million Baht Change Amount

%

4,293 5,503 9,796

4.44 17.31 7.62

(1,971) 15.16 7,825 - 194,388

- 6.09 22.94


Analysis of Cash Flow Statement

For the year-ended December 31, 2008 the cash and cash equivalent items in the consolidated financial statements equaled Baht 34,520 million, up by Baht 13,064 million or 60.89 percent from year-end 2007 mainly due to the following reasons: 1) Net cash used in the operating activities of Baht 6,576 million deriving from operation income before changes in operating assets and liabilities of Baht 29,745 million, and the Bank had major changes of assets and liabilities namely deposits increase of Baht 62,545 million, short-term borrowings increase of Baht 28,357 million, securities purchased under resale agreements decrease of Baht 600 million, interbank and money market items (assets) increase of Baht 16,914 million, as net loans increased by Baht 106,505 million and interbank and money market items (liabilities) dropped by Baht 3,154 million. 2) Net cash from investment activities of Baht 1,768 million deriving from net cash received from disposal of held-to-maturity debt securities of Baht 5,088 million and net cash received from disposal of general investments of Baht 4,153 million while net cash paid from purchase of available-for-sale securities equaled Baht 3,958 million and net cash paid in purchase of land, premises and equipment stood at Baht 2,779 million. 3) Net cash from financing activities of Baht 17,872 million deriving from cash received from long-term borrowing of Baht 21,228 million with cash paid on ordinary share and preferred share dividends amounting to Baht 3,256 million.

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The Bank’s Performance from 2004-2008

Consolidated Items Operating Performance

Ann ual Report 2008 Krung Thai Bank Pcl.

Interest and Dividend Income Interest Expense Net Interest and Dividend Income Bad Debts and Doubtful Accounts Net Interest and Dividend Income after Bad Debts and Doubtful Accounts and Loss on Debt Restructuring Non - Interest Income Non - Interest Expenses Income (Loss) before Income Tax Income Tax Expense Net Income (Loss)

Amount (million baht) Change (%) 2008 2007 2006 2005 2004 2008 2007 2006 2005 2004 65,449 19,633 45,816 10,906

66,177 22,139 44,038 19,575

67,292 50,061 45,929 (1.10) (1.66) 34.42 9.00 12.63 21,405 11,445 13,361 (11.32) 3.43 87.02 (14.34) (22.40) 45,887 38,616 32,568 4.04 (4.03) 18.83 18.57 38.23 16,502 6,438 8,349 (44.29) 18.62 156.32 (22.89) 135.71

34,910 24,463 29,385 32,178 24,219 42.71 (16.75) (8.68) 32.86 11,158 11,028 10,699 7,641 9,249 1.18 3.08 40.02 (17.39) 30,331 28,015 25,966 22,517 22,347 8.27 7.89 15.32 0.76 15,737 7,476 14,117 17,303 11,121 110.50 (47.04) (18.41) 55.59 3,465 1,069 39 4,279 27 224.13 2,641.03 (99.09) 15,748.15 12,272 6,407 14,078 13,024 11,094 91.54 (54.49) 8.09 17.40

Financial Standing

Interbank and Money Market Items 93,023 76,008 86,129 69,132 50,221 22.39 Securities Purchased under Resale Agreements - 600 21,200 48,210 56,200 (100.00) Net Investments 111,511 110,124 113,578 103,425 69,695 1.26 Loans 1,042,498 954,571 922,679 892,066 935,204 9.21 Allowance for Doubtful Accounts and Revaluation Allowance for Debt Restructuring 35,585 36,968 39,523 41,125 63,359 (3.74) Net Loans and Accrued Interest Receivable 1,011,749 922,760 888,641 855,953 880,378 9.64 Net Properties Foreclosed 37,580 34,718 34,110 33,786 31,634 8.24 Total Assets 1,330,376 1,212,722 1,204,828 1,162,748 1,148,903 9.70 Total Deposits 1,063,216 1,000,671 966,437 982,971 1,003,122 6.25 Interbank and Money Market Items 36,447 39,601 48,534 52,454 42,281 (7.96) Borrowings 100,226 50,382 77,344 20,451 10,001 98.93 Total Liabilities 1,226,748 1,117,062 1,112,100 1,080,116 1,073,046 9.82 Total Shareholders’ Equity 103,628 95,660 92,729 82,631 75,857 8.33

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20.99 17.12 16.81 26.59 (66.25) 27.44

(11.75)

24.59

37.66 37.86

(97.17) (56.03) (14.22) 332.31 (3.04) 9.82 48.40 (15.77) 3.46 3.43 (4.61) (4.41) (6.46) 3.84 1.78 0.66 3.54

(3.90) (35.09) 3.82 0.96 3.62 (1.68)

6.57

(2.77) (5.35) 6.80 47.33 1.21 1.27 (2.01) (0.22)

(18.41) (7.47) 24.06 20.99 (34.86) 278.19 104.49 1,000,000 0.45 2.96 0.66 1.27 3.16 12.22 8.93 1.23


Consolidated Items Financial Ratios Profitability Ratios

Net Interest Margin (%) Return on Average Assets (%) Return on Average Equity (%) Cost to Income Ratio (%) Net Income (Loss) / No. of Employees (million baht)* Financial Policy Ratios Loan / Deposit (%) Liabilities / Shareholders’ Equity (times) Shareholders’ Equity / Assets (%) Capital Adequacy Ratios BIS Tier 1 Capital Ratio (%) BIS Total Capital Ratio (%) Asset Quality Ratios* Earning Assets / Total Assets (%) NPL / Loans Allowance for Doubtful Accounts / Total Loans (%) Allowance for Doubtful Accounts / NPLs (%)

Other Items

NPLs (million baht) Book Value per Share (baht) P/E Ratio (times) Price per Book Value (times) No. of Employees (persons)* No. of Branches (branches)* Note: *KTB data only

Amount (million baht) Change (%) 2008 2007 2006 2005 2004 2008 2007 2006 2005 2004 3.60 3.64 0.97 0.53 12.32 6.80 53.73 51.48

3.88 1.19 16.06 45.22

3.34 1.13 16.44 48.93

0.38

0.89

0.87

98.05 95.39

95.47

90.75

93.23

11.84 11.68 7.79 7.89

11.99 7.70

13.07 7.11

14.15 6.60

9.70 11.41 13.08 15.16

10.88 14.03

8.50 12.10

8.24 10.92

93.68 94.14 7.63 9.53

94.51 9.22

95.17 10.32

96.30 12.35

3.85

4.27

4.60

6.76

41.55 38.43

44.06

42.12

52.93

0.72

3.38

2.85 0.97 14.71 55.06 0.75 89.47 (57.30)

85,448 96,164 89,692 97,635 119,693 (11.14) 9.26 8.55 8.29 7.39 6.78 8.30 4.10 17.64 9.22 9.63 7.58 0.42 1.18 1.46 1.50 1.32 16,689 16,110 15,445 14,952 14,811 3.59 832 762 695 643 619 9.19

2.30

16.00

27.12

7.22 (8.14) (18.43) 3.14 12.18 9.00

50.67 1.19

4.31 9.64

(0.42) 0.49

3.30 8.09

0.95 3.88

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Risk Factors and Risk Management

Ann ual Report 2008 Krung Thai Bank Pcl.

The Bank is fully aware that risk management is a necessary and crucial management process in bringing the organization efficiently to attain the set targets especially amidst today’s fast changing and highly competitive business environment. Accordingly, COSO Enterprise Risk Management (ERM) Framework has been adopted for managing risk within the Bank. The key principle is to map risk management process with the strategic plan and business opportunities in an integrated manner enabling the Bank to achieve the main objectives set forth in the vision and mission. For 2008 a risk map was drawn up including key risk indicators (KRIs), risk appetite and risk tolerance for all the key risks areas namely strategic risk, operational risk, financial risk and compliance risk. Apart from this, training programs are organized for staff members at all levels on a continuous basis to provide them with the awareness and an understanding that risk management is the responsibility of every employee. When tasks are performed with risk management responsibility in mind, every business unit is bound to achieve the overall targets efficiently and effectively under principles of good corporate governance that will help the Bank to enjoy steady and sustainable growth.

Risk Management Structure

The risk management structure consists of committees namely the Board of Directors, the Board of Executive Directors, the Audit Committee and the Executive Committee that oversee risk management policy. In addition, several other sub-committees comprising senior executives are set up to formulate policies and strategies on risk management. These include:

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Risk Management Committee (RMC), chaired by the President is responsible for formulating policies and strategies on risk management. Meeting is called at least once a month and report to the Audit Committee every month and to the Board of Directors on a quarterly basis. Assets and Liabilities Management Committee (ALCO) is responsible for developing strategies on managing assets and liabilities and capital funds through utilization of tools that help to determine appropriate investment, interest rates, returns on loans and deposits, exchange rates and liquidity as well as to manage liquidity and interest rate in line with external factors otherwise could impact liquidity and profitability of the Bank. ALCO meets at least once a month and reports to the Board of Executive Directors regularly on monthly and quarterly basis. Investment Committee (IC) is responsible for formulating investment framework and plan for equity securities and debt securities, approving investment within the limit designated by the Board of Directors, reviewing investment and overseeing that risk in trading securities is within the investment policy and target. IC meets at least once a month. Group Credit Committee (GCC) has the authority to approve credit and debt restructuring. GCC also approves the transfer of collateral as debt repayment and the purchase of mortgaged properties from auction as prescribed by the Bank’s regulations. Meeting is called at least once a week. Credit Scrutiny Committee is responsible for scrutinizing credit application and debt


restructuring, approving credit lines, debt restructuring limits, sale of non-performing assets, underwriting and investment of debt securities except those issued by the government, Bank of Thailand and state enterprises guaranteed by the Ministry of Finance. Meeting is called at least once a week. Additionally, the Bank in 2008 reorganized its structure for more efficiency by segregating the function of operational risk management from the Enterprise Risk Management Department and set it up as Operational Risk Management Department under the Risk Management and Compliance Group.

Risk Management Principles

For efficient risk management, the Bank has established the following principles: 1. Credit Risk Credit risk is one of the major risks that commercial banks have to face as the main revenue still comes from credit extension. Amidst the current intense credit competition and diverse credit products, higher risk is foreseen if the Bank lacks efficient risk management. The Bank thus enhances its credit risk management seriously and continuously. Measures and Tools The Bank in 2008 continued to improve measures and tools for credit risk management in continuation from 2007. Such measures include: 1) Review and revise the credit risk policy and manual to enable credit risk management to proceed in concerted direction and in compliance with the Bank of Thailand’s policy on credit risk supervision and the Basel II requirement.

2) Formulate investment policy and oversee that the companies in which the Bank invested create returns that match acceptable risk levels. 3) Review and enhance the loan policy, approval authority on credit and troubled debt restructuring and related work procedures in support of the Bank’s business operation within acceptable risk. 4) Establish Loan Policy Guideline for the period of slackening economy to help the credit granting units in selecting clients and viable projects. Efficiently monitor and manage loan portfolios to prevent and reduce volume of substandard loans. 5) Monitor and report credit approvals that do not conform to the credit policy to minimize credit risk. 6) Enhance and develop credit risk management tools to be in line with the Bank’s guidelines for risk management and Basel II framework. 7) Review and set maximum sector limit for each industry to prevent any significant credit concentration and thus create appropriate risk diversification. 8) Set counterparty limit to control risk that may arise from counterparty’s refusal or unable to make payment or submit collateral as agreed upon and monitor their credit line not to exceed the given limit. 9) Continue developing loan process to standardize credit approval system including establishment of processes on consumer loans and corporate loans to support Basel II requirements. As well as organize training for staff members to have accurate understanding about their work and thus be able to respond better to customer needs. 10) Develop credit analysis standards and determination of interest rate and fee through risk adjusted return on capital (RAROC).

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Ann ual Report 2008 Krung Thai Bank Pcl.

11) Review and revise credit review process to show risk more distinctly as well as tracking mitigation actions taken to rectify deficiencies and periodically report on such tracking. 12) Improve quality and enhance the layout of business research work adding in economic risk analysis and assessment, industry risk rating, viable company analysis and financial sector analysis. Prepare Krung Thai Business Index (KTBI) and analysis of viable industries classified by region to support management in planning and approving credit. 13) Conduct risk self-assessment as prescribed by the Bank of Thailand and report the results to the Board of Directors together with measures to mitigate risk. Monitor performance in accordance to the action plan. 14) Develop skills and increase knowledge of credit for executives and loan officers using standards of Omega Performance. 15) Train employees to have the awareness about risks and Basel II risk management so they will know the importance of risk prevention. 16) Assess adequacy of loan provisioning as prescribed by the Bank of Thailand. Set up the process of checking the accuracy of loan classification and the correctness of data on troubled debt restructuring. 17) Conduct stress testing to assess the impact on operation and capital adequacy which will be beneficial for fund management. Albeit volatile business environment, the Bank’s overall credit risk was still acceptable. Details follow:

regulators in oversight large exposures. In addition the Bank set sector limit for each industry to better diversify risk. Also to monitor closely so no significant credit concentration occurs. As at year-end 2008, there was no significant credit concentration in any particular industry or individual clients. The Bank’s top-ten corporate customers were government agencies, state enterprises and corporate businesses with strong financial standing. Most of the credits extended were diversified among manufacturing and commercial industries, infrastructure and services, housing loans, real estate and construction.

The Bank oversees credit concentration risk including granting of credit to customers and related party as prescribed by the

In granting credit some form of collateral is required such as deposits, bill of exchange, bonds, clean assets, machinery, leasehold or

Credit Concentration Risk

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Asset Quality Risk

The much slackening economy in 2008 hardly affected the Bank’s assets quality. Non-performing loans (NPLs) decreased from 9.53 percent of total loans in 2007 to 7.63 percent, parts of which were NPLs from old loans approved several years ago. The Bank has taken preventive measures and close control including measures for expediting reduction of old NPLs such as setting target for credit granting units to lower new NPLs every year, providing guidelines for handling of debtors before becoming NPLs and revising credit approval and troubled debt restructuring authority. Besides, the Bank expedited sale of non-performing assets (NPAs) via many channels including direct sale through employees and sales agents, NPA Grand Sale as well as offering sale through NPA Online developed by the Bank. All these channels speed up servicing making customers more satisfied.

Collateral Value Impairment Risk


warehouse stock. The Bank will consider collaterals that are high rated and can be quickly liquidated. In appraising collateral value, the Bank uses both independent appraisers and qualified Bank employees so that collateral appraisal will be up to professional standards. Moreover, the Bank reviews collateral appraisal regularly to be in line with the requirements prescribed by the Bank of Thailand and reduce collateral value impairment risk. Regarding collaterals seized by the Bank as non-performing assets, allowance for collateral impairment under the IAS 39 framework had been provisioned as per details in the Notes to the Financial Statements No.3.8.

2. Market Risk

Market risk arises from changes in equity value that came as a result of changes in market factors such as volatility of interest rates, foreign exchange rates and securities prices and consequently affect income and capital fund of the Bank. The Bank thus gives great importance to market risk management segregating risk management work from operations so control can be efficient and transparent. Risks affecting trading book The Bank has adopted Value at Risk (VaR) to assess market risk. VaR refers to the maximum value of losses upon changes of market risk factors at confidence level of 99 percent during one-day position. In 2008, the Bank’s aggregate market risk was low and within tolerance level. Risks affecting trading book position include: 1) Interest Rate Risk which is the risk that income and capital are negatively impacted by the fluctuation of interest rates. The Bank assesses impact from sensitivity and volatility of interest rates. In 2008, the Bank’s interest

rate risk was rather low and within acceptable levels. 2) Foreign Exchange Rate Risk is the risk that income and capital are negatively impacted by the fluctuation of exchange rates. The Bank controls daily foreign exchange trading including spot, forward and options to prevent risk occurring. Although foreign exchange rates in 2008 fluctuated more than in 2007, the Bank was able to control foreign exchange rate risk within its acceptable levels. 3) Price Risk arises from changes of the equity prices impacting income and capital fund negatively. In 2008 the stock market was adversely affected by several factors including global economic slowdown, slackening Thai economy and internal political conflict thus resulting in SET index slump. However, the Bank closely monitored the situation enabling price risk to be within acceptable levels. Concerning derivatives, the Bank was affected by the sub-prime problem which led to the investment of collateralized debt obligations (CDOs) as it had to record CDO accounting prices according to regulations prescribed by the BOT. However, the Bank already provisioned fully for any future impairment. Measures and Tools Apart from the above mentioned tools, other measures taken to manage market risk that affect trading book are: 1) Review market risk management policy to be in consonance with the Bank’s strategy and guidelines for market risk supervision prescribed by the Bank of Thailand. 2) Set market risk limit with the threshold determined by the Board of Directors. Through this risk exposure for market risk is controlled and in addition authority is delegated to respective committees to oversee the issues as deemed appropriate.

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Ann ual Report 2008 Krung Thai Bank Pcl.

100

3) Reporting market risk daily to business head of concerned business unit and to the Group Executives and the Risk Management Committee on monthly basis. 4) Conduct stress testing under scenario required by the Bank of Thailand for the Financial Sector Assessment Program (FSAP) and under the Bank’s own criteria as deemed appropriate with the type of transactions done. Stress testing report is submitted to the Risk Management Committee every month. 5) Assess mark-to-market values of transactions in the trading book at every dayend so as to weigh the impact from changes and fluctuations of interest rates, foreign exchange rates and stock prices that might adversely affect the Bank’s income and capital fund. 6) Communicate to directors, executives and staff members the right understanding and awareness of market risk so that they will realize the importance of risk prevention as set forth in the Market Risk Policy already approved by the Board of Directors. 7) Develop personnel through training to enhance their knowledge and competency in risk management which will help to boost efficiency in market risk management. Risk affecting banking book Interest rate risk is the main risk affecting the banking book position causing losses to income and/or value of shareholders’ equity of the Bank. This interest rate risk could arise both from positions in and off-balance sheets of the banking book. In 2008, the overall interest rate risk in banking book was still within the approved risk limit and at acceptable levels. Measures and Tools 1) Review policy on interest rate risk management in the banking book as guidance for curbing interest rate risk within

the acceptable level and in line with the Bank’s volume and type of transactions with reference to the banking book supervision prescribed by the Bank of Thailand. 2) Control interest rate risk in the banking book through fixing income ceilings adversely affected by different levels of interest rate changes, to be within acceptable ranges. Reports are presented regularly to the Risk Management Committee each month. 3) Conduct stress testing to assess interest rate risk in banking book under supervisory scenario designated by the Bank of Thailand. Reports on stress testing are submitted to the Risk Management Committee every quarter. 3. Liquidity Risk Liquidity risk refers to the risk of not being able to repay the liabilities or contingencies upon maturity since the assets cannot be liquidated into cash or sufficient fund cannot be acquired or could be acquired but at an unacceptable cost. All these may adversely affect the Bank’s income both at present and in the future. Liquidity risk also includes risk of being unable to unwind or offset risk from the assets held, thus forcing the Bank to sell them at prices lower than costs as the assets have low liquidity. The Bank’s liquidity risk in 2008 was at an acceptable level reflecting its capability to adequately manage liquidity to cater for business operation through introducing new deposit products or issuance of bills of exchange continuously at competitive costs. Moreover, excess liquidity was well managed through investment for returns that suited the prevailing market condition. Measures and Tools 1) Review the liquidity risk management policy to be in line with the Bank of Thailand’s guidelines on liquidity risk management for


financial institutions. 2) Set the liquidity risk limit appropriately with transaction volume and in consonance with the changing environment in order to control liquidity risk to be within the designated level. 3) Establish liquidity risk management process with due consideration of liquidity trends from estimates of liquidity position of the Bank and assess its risk from the net liquid assets to net liquidity ratio to see the adequacy of liquid asset in accommodating demand for use of short term capital. Reports are submitted regularly to the management and business units concerned. 4) Regularly conduct stress testing to assess liquidity risk in accordance with the BOT’s supervisory scenario and report such testing to the Risk Management Committee every quarter. 5) Review the Contingency Funding Plan to be in line with the BOT’s Financial Institutions Business Act B.E. 2551 (2008) and to be able to cope with any liquidity issues that may arise. 4. Operational Risk Operating banking business today for sustainable survival is much tougher than ever before since banks have to encounter fast and severe changes from both internal and external factors. In other words risk has increased and becomes harder to avoid. The Bank management thus stresses the importance of operational risk as they witnessed closure of several financial institutions due to losses caused by operational risk. Operational risk includes risk arising from inadequacy or deficiency of internal work process, human resources, work system or external incidents including legal risk. Work process and system can be well controlled through the help of technology but human resources are the key factor that is

hard to control. External factors are hard to control too but at least the risk can be reduced to some extent. Thus the Bank tries to provide its staff members at all levels with the knowledge and right understanding about operational risk so they will realize the significance and their participation in operational risk management. Moreover, the Bank fully enhances and develops operational risk management process to cater for the changing and more complex environment. As a result, the Bank’s aggregate operational risk in 2008 was still at an acceptable level. Measures and Tools 1) Review and revamp the structure of the Risk Management and Compliance Group through separation of the Operational Risk Management Department from the Enterprise Risk Management Department to enable independent performance with clearer scope of duty. 2) Hire consultant to formulate practice guidelines for operational risk management to be comparable with international standard and acceptable for Basel II. 3) Review the Operational Risk Management Policy adding in risk appetite and risk tolerance for the Bank as a whole. 4) Formulate the policy on capital funding for operational risk and set the criteria for mapping income and expenses to the related business line to be used for operational risk capital calculation as prescribed by the Bank of Thailand. 5) Develop preventive measures and enhance operating procedures for more soundness in order to control any risks from human resources. Each internal fraud event will be investigated with penalization of any person involved. 6) Arrange for insurance and prepare the business continuity plan (BCP) to cover key transactions of the Bank including the

101


Ann ual Report 2008 Krung Thai Bank Pcl.

pandemic flu so as to reduce the negative impact from such natural catastrophe and epidemics. 7) Require all business units to report losses or damages incurred from operational risk through web-based operational loss data reporting system. The Operational Risk Management Department will analyze the collected data and regularly report losses to the Group Executives and to the concerned committees. 8) Require all business units to do the Risk Control Self-Assessment (RCSA) at least once a year. In the process business units will learn to identify risk in their operating process and assess the adequacy of their current control. In case of inadequate control, such business unit must set up action plan to mitigate those risks. 9) Organize workshop in conjunction with the business unit manager and operational risk officer (ORO) of each unit. The Bank will have data and information that truly reflect the business unit’s risk. Such data will also help in determining the Operational Key Risk Indicator (KRI) that will assist business units in knowing their risk status and at the same time enabling them to monitor such risks. 5. Strategic Risk Strategic risk stems from inability to attain objective as set forth due to inappropriate implementation that does not respond well to internal factors and external environment thus adversely affecting earnings, capital fund as well as solvency of the Bank. In 2008, business environment was highly uncertain particularly with hard-tocontrol external factors such as political chaos, economic slowdown and global financial crisis, all of which had adverse effect on the Bank’s operation and targets and

102

could cause the Bank to encounter strategic risk. However, the Bank closely monitored the situation and drew up practice guidelines for coping with each scenario continuously and regularly thus enabling most of the operating performances to meet the targets set. Measures and Tools 1) The Bank’s strategic risk management is in conformity with the examination guidelines prescribed by the Bank of Thailand and the guidance of the State Enterprise Policy Office on enterprise management governing risk management. 2) The strategic planning process has clear and complete procedural steps with active participation of the Directors and top executives in setting up the strategic plan and business plan. A process is also established to put such strategic plan into actual practices according to duty and responsibility of each business unit for optimum efficiency. 3) In formulating the strategy, the Bank has taken relevant factor including internal and external environment into consideration. Indepth information such as comparative data with competitors, customer satisfaction survey results and information obtained from conducting SWOT analysis have been used for the purpose. 4) The Bank monitors operating performance periodically against the set targets so as to drive the strategy towards the goal. In case of target shortfall, additional guidelines for operation are added and operating plan is adjusted to suit the changing environment. 5) The Bank has introduced Economic Value Management (EVM) through the principle of Economic Profit (EP) as part of strategic planning, operating performance assessment and fixing of remuneration.


6. Capital Adequacy Risk Capital adequacy risk refers to the risk of having insufficient capital funds for business expansion, unexpected damages or losses and the changing regulations and uncontrollable environment, affecting commercial banks’ stability and operation. Hence, the Bank of Thailand has given great importance to supervise capital adequacy of financial institutions through adoption of Basel II requirement which became effective as of year-end 2008. Each bank is required to report capital funds calculated under the new requirement in parallel with the current method. Measures and Tools 1) The Bank has submitted to the Bank of Thailand the approach its selected for capital funds calculation, as well as the quantitative impact study (QIS) to assess impact on capital funds under Basel II requirement. The Bank submitted its capital funds report under existing requirement in parallel with the new one as at year-end 2007 on February 29, 2008 and under Basel II requirement for data as at year-end 2008 to the Bank of Thailand in January 2009. 2) The Bank has implemented the consolidated supervision requirements as prescribed by the BOT and preparation of reports under such requirement namely report on investment in financial business, consolidated financial statements report, legal capital funds report, report on maintenance of capital funds proportionately with assets and contingencies and report on lending, investment and contingencies for the periods ended June 2007, December 2007 and June 2008, all of which were already submitted to the BOT. The Bank’s capital funds to risk assets under consolidated supervision are higher than that prescribed by the BOT.

With measures and continued preparedness, the Bank’s capital funds as at December 31, 2008 registered Baht 136,324.75 million or 13.08 percent of risk assets, higher than the requirement prescribed by the BOT and adequate for overall business expansion. However, to be well prepared for higher risk such as economic environment, compliance with Basel II requirement, consolidated supervision requirement and the International Accounting Standard No. 39 (IAS 39), the Bank plans to issue subordinated debentures in February 2009 which would boost its total capital funds.

Preparedness for Basel II Requirements The Bank of Thailand has set forth plan for enforcement of Basel II framework for financial institutions as of year-end 2008. All financial institutions have been required to make various preparations especially data which is the basic requirement and enhancement of operation process to be able to carry out the minimum requirement for capital funds calculation under Basel II framework. To ensure the financial institutions’ readiness within the deadline, the Bank of Thailand has required financial institutions to start reporting on capital funds under Basel II in parallel with the current requirement on quarterly basis since the beginning of 2008. In 2008, the Bank set up application for capital funds calculation under Standardized Approach (SA). Data gap and business gap for SA capital funds calculation, data cleansing, system development, user acceptance test (UAT) were all done. The system has been ready for calculation since December 31, 2008 as scheduled by the BOT. Additionally in preparation for capital funds calculation under Advanced Approach, the Bank already conducted data gap and business gap simultaneously with Standardized Approach. At year-end 2008,

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Ann ual Report 2008 Krung Thai Bank Pcl.

the Bank completed the proof of concepts to ensure the system functionality, able to further enhance it towards Advanced Approach to come. In 2009, the Bank will continue the implementation under Basel II requirement in the part of Pillar II, which involves the Internal Capital Adequacy Assessment Process (ICAAP) comprising determination of ICAAP framework, development of measurement tools for capital adequacy, enhancement of stress test and scenario analysis, estimate of capital funds needed and capital funds building plan. Bank will have to formulate the accurate and appropriate information disclosure policy under Pillar III through due consideration of proper channels for data disclosure and duration for such closure (half yearly or annually) so as to accommodate the BOT requirements. The Bank complied with the Basel II requirements for various risk types as follows: Operational Risk Operating income and expenses have been mapped to each business line reviewing them annually. Moreover, the Bank established policy and internal process for operational risk management and control, set up operational risk management system, enhanced tools for assessment, monitoring,

104

control and mitigation of operational risk comprising loss data reporting, risk control self-assessment and preparation of operational risk indicators. Risk reports have been continuously reported to senior executives and relevant committees for acknowledgement. Credit Risk The Bank has been preparing data to be used in calculation of risk with due consideration of primarily their quality and accuracy. Data gap has been conducted and accurate and complete information on customer, assets and collateral have been compiled as well as enhancement of capital fund assessment system. Besides, the Bank hired specialists to render consulting service concerning credit risk management system and process enhancement including development of various tools and conduct of business gap. Market Risk The Bank has maintained capital funds to cater for market risk by adopting standardized approach (SA) and prepared for Internal Model Approach under Basel II framework. If the investment portfolio in trading book has efficient risk diversification, the Internal Model Approach might enable the Bank to maintain lower capital funds than using SA.


Report of the Corporate Governance and Social and Environmental Responsibility Committee Good corporate governance has been Krung Thai Bank’s prime concern since 2006. The Bank has prescribed clear practice guidelines for corporate governance to be strictly observed by all directors, executives and staff members at all levels. As such the Corporate Governance and Social and Environmental Responsibility Committee has been assigned to supervise and monitor the Bank’s operation stringently based on ethics and auditable transparency, as well as corporate social and environmental responsibility (CSER). In addition, as a listed company the Bank is fully aware that good corporate governance is essential in depicting efficient and transparent management which will create confidence and trust to shareholders, investors, stakeholders and all parties concerned. The attention and the continuous implementation of good corporate governance over the past three years (2006 - 2008) has assimilated into the organization culture, and could be considered successful considering the satisfactory feedback from the bi-annual customer’s survey and the many awards received. However, this does not stop the Bank from initiating more such work and 2009 have been designated as the Year for Corporate Governance Network Building, inducing all fully owned subsidiaries to adopt good corporate governance in their management as well. With such meticulous work, the Bank has claimed the following awards of good corporate governance in 2008. 1. SOE Award for Distinctive State Enterprise Board of Directors awarded by the State Enterprise Policy Office, Ministry of Finance. 2. CSER Award for distinctive performance in corporate social and environmental responsibility awarded by the State Enterprise Policy Office, Ministry of Finance. 3. Shareholders Award as distinctive listed company for shareholders caring awarded by the Thailand Securities Depository Co., Ltd. in conjunction with the Stock Exchange of Thailand, the Thai Investors Association, the Thai Listed Companies Association and the Thai Investor Relation Club. 4. Designation as “Excellent” from the report on supervision of listed companies of the Thai Institute of Directors Association in conjunction with the Stock Exchange of Thailand and the Securities and Exchange Commission. The awards received clearly reflected the Bank’s management adhering to corporate governance principles and social and environmental responsibility. It could be said further that the Bank will continue on with such guidance.

(Mr. Santi Vilassakdanont) Chairman of the Corporate Governance and Social and Environmental Responsibility Committee January 12, 2009

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Report of the Nominating a n d R e m u n e r a t i o n C o m m i t t e e

Ann ual Report 2008 Krung Thai Bank Pcl.

The Bank has appointed the Nominating and Remuneration Committee, comprising three members who all are Independent Directors, to take responsibility in nominating and determining remunerations of Group Executives, President and Directors of the Bank. The Nominating and Remuneration Committee has nominated qualified persons as Group Executives, President and Directors prudently considering their qualifications, knowledge, competence, experience and expertise in diverse fields, as well as leadership, vision and positive attitude towards the organization - all for the benefits of the Bank. Furthermore, the Committee considers the appropriate size, structure and composition of the Board of Directors to promote good corporate governance leading to efficient and effective business management and in compliance with the regulatory requirements and the changing environment. Regarding remuneration, the Committee has taken into consideration duty and responsibility, job performance and the overall operating performance of the Bank, as well as remunerations in the markets for banking business. The Nominating and Remuneration Committee met 11 times during 2008. Such proposed nominating and remuneration fixing were reviewed and approved by the Board of Directors.

(Mr. Sima Simananta) Chairman of the Nominating and Remuneration Committee January 8, 2009

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Corporate Governance (CG) Good oversight is increasingly more crucial to business operation particularly banking business that involves so many groups of stakeholders. Without good corporate governance losses could incur to the business and spread at negative impact on stakeholders and the overall economy as it happened with the 1997 economic crisis in Asia, as well as the current one that is occurring in the US and spreading rapidly worldwide. Krung Thai Bank as the largest state-owned commercial bank deems it a key mission to strictly adhere to good corporate governance and with strong determination to promulgate this into its organization culture. The Bank started to campaign CG seriously since 2002 with the establishment of the Corporate Governance Committee and the issuance of the Corporate Governance Policy and guidelines. Into the year 2006 the Bank proclaimed it as “The Year of Corporate Governance” and kicked off a three-year plan for building up corporate governance culture designating 2006 as “The Year of Learning”, 2007 “Year of Adopting” and 2008 “The Number One”. In implementing the work plan in each phase, the Bank organized activities continuously to stimulate staffs at all levels to be aware of corporate governance. Such activities included exhibition on CG projects, inclusion of CG course as a prerequisite for job promotion and for new entrants’ orientation, rewarding CG Awards to distinctive business units for their excellent compliance with corporate governance policy and inclusion of CG as KPI for all business units. Besides promoting CG within the organization, the Bank in 2008 expanded the scope to cover its subsidiaries as well. On December 2, 2008, Krung Thai Bank signed MOU with its subsidiaries for the project entitled KTB CG Group “Honest, Transparent and Ethical”. Its purpose is to encourage subsidiaries to adopt CG in their management which could help them to enjoy a strong sustainable growth, a sound guarantee for the shareholders, investors and all stakeholders.

Such continued learning and doing resulted in the Bank’s ultimate success in 2008, achieving several prestigious awards. Among them were the SOE Award for distinctive state enterprise Board of Directors and the CSER Award from the State Enterprise Policy Office for outstanding work in corporate social and environmental responsibility and the Award on Corporate Governance Report of Thai listed Companies from the Thai Institute of Directors Association (IOD). All these awards, not only brought great pride to the Bank but also inspire it to further adhere to such principles of good corporate governance.

Corporate Governance Policy

The Board of Directors has designated the Corporate Governance and Social and Environmental Responsibility Committee to set forth action plan and measures, ensuring that the CG Policy is complied. In addition to assess performance outcome and to review such policy regularly as well as to update the guidelines in consonance with domestic and international practices gearing towards global standards. The Bank’s policy and guidelines was written since 2002 in accordance with the Stock Exchange of Thailand’s corporate governance practices. It comprises seven principles as follows: 1. Creation of long term value added: create sustainable value added. 2. Accountability: responsible for one’s commitment, action and decision. 3. Responsibility: perform assigned duties with utmost competence. 4. Promotion of best practices: provide services with good corporate governance and moral ethics. 5. Equitable treatment: give equitable and fair treatment to all stakeholders. 6. Transparency: show transparency in business operation. 7. Social and environmental awareness: aware of social and environmental responsibility issues.

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The above seven CG principles have been communicated to staffs at all levels through respective media. They are also well blended within the tasks that all business units must carry out to ensure that the Bank has managed its business in accordance with corporate governance framework. All the Directors are fully aware of their duties to conduct business for the Bank’s optimum benefit, oversee public disclosure of information while ensuring operational transparency, giving fair and equitable treatment to stakeholders, and adhering to social and environmental responsibility. All staff members perform their duties to the best of their ability and as what good citizens should do. Furthermore, the Bank has initiated projects to boost the education of Thai youth, to support local heritage, develop local communities and strengthen the economy continuously for the benefits of society (details can be seen at: www. ktb.co.th).

Corporate Governance Principles set by the Stock Exchange of Thailand

The Bank has fully complied with the principles of good corporate governance in line with sufficiency economy philosophy and all the five categories set forth by the Stock Exchange of Thailand. The five categories are:

1. Shareholders’ Rights

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1.1 Policy and Shareholders’ Rights Protection The Bank attaches importance to protection of shareholders’ rights and promotion of exercising such rights. The basic legal rights comprise the right to buy, sell or transfer securities held, the right to receive dividend, the right to take part in decision-making of the Bank’s material issues such as approval of key activities affecting business direction, amendment to the Memorandum and the Articles of Association, the right to vote for the appointment of auditor and fixing of auditor fee, the right to propose agenda in the shareholders meeting, the right

to vote for the election of director (details are shown on page 78) and the right to attend the shareholders meeting. Besides these basic rights, the Bank has established best practices to its shareholders. Included are shareholders’ right to receive news and information on operating performance, performance analysis, credit ratings from respective institutions, research work and social activities through the easy access of the Bank’s website. Additionally, the Bank organized shareholders’ visit to Krung Thai Bank Training Center at Khao Yai, Nakhon Ratchasima Province which is an energy saving building receiving national and ASEAN awards. 1.2 Shareholders Meeting The Bank gives great importance to the Ordinary General Meeting held once a year within four months after the end of the accounting period. In this regard, the Bank has fully observed the principles of CG and the prescribed legal previsions allowing shareholders to propose the agenda prior to the Annual Ordinary General Meeting. All relevant information is posted on the Bank website: www.ktb.co.th/Investor Relations/Shareholders/Invitation to the Shareholders Meeting about 30 days before the meeting date. In addition, the Bank has designated Thailand Securities Depository Co., Ltd. as Registrar, to send out notices of meeting, detailed agenda and attachments to shareholders in advance to assist them before casting their votes on each agenda. In case of doubt, shareholders can still submit queries to the Directors prior to the meeting via the website or mail directly to the Board of Directors. The Chairman of the Meeting will inform the shareholders of the rules of the meeting and the procedures of voting, allowing fair opportunities to present their opinions and inquire about any Bank’s matter. Chairman of the Board of Directors, President and all the relevant chairmen of the respective committees will attend to explain the operating


performance and management policies and to answer any queries raised. The Bank held the Annual Ordinary General Meeting on April 25, 2008 attended by all the Directors and 12 Group Executives including CFO. Representatives from related organizations and institutions also attended as observers such as the Office of the Auditor General Thailand and the Office of the Securities and Exchange Commission of Thailand. The Bank invited two shareholders to witness the vote counting of each agenda. The Chairman of the Meeting gave equitable opportunities and time to all shareholders in exercising their rights to check the Bank’s operation, raise questions, or make recommendations. Vote counting was conducted in an open, transparent and instant manner. One share was counted as one vote and a majority made the decision except for special resolution where at least three-fourths of the total votes are needed. Minutes of the meeting were recorded and the votes on each agenda were separated into favoring, against and abstentions and disclosed to shareholders on the website: www.ktb.co.th/ Investor Relations/Shareholders /Minutes of the Meeting within 30 days after the meeting date. 2. Equitable Treatment to Shareholders 2.1 Treatment of Minority Shareholders The Bank provides equitable and fair treatment to all shareholders whether they are institutional investors, foreign investors or minority, enabling them to enjoy equitable treatment in exercising their rights. In addition, the Bank allows them to nominate appropriate person to be elected as Director. In 2008, four directors have completed their terms of office. Hence, during October 1 - December 31, 2008 the Bank requested minority shareholders and other groups of shareholders to submit in names of nominees with related qualifications. However, no eligible person was nominated (details are shown at www.ktb.co.th/Investor Relations/ Shareholders /Minutes of the Meeting).

2.2 Attendance of General Meeting by Shareholder’s Proxy When shareholders cannot attend the general meeting, they can assign proxies and vote on their behalves. Proxy form and the proposed three Independent Directors were attached with the notice of meeting. Shareholders or proxies are urged to use voting ballots on every agenda item. At the 2008 Annual Ordinary General Meeting, 915 shareholders and 584 proxies attended totaling 1,499 shareholders, accounting for 74.85 percent or 8,372,413,322 shares, constituting a quorum in accordance with the Bank’s Articles of Association. 2.3 Preventive Measures for Misuse of InsideInformation by Directors and Executives To eliminate conflict of interest and oversee that inside information is not misused for personal interest or that of others; the Bank has clearly stipulated respective measures written in the Code of Business Ethics, as summarized below: Measures for Overseeing Usage of Inside Information 1) Each Director, executive officer and employee must refrain from buying, selling, transferring or accepting transfer of securities whereby prices still undisclosed to the public or Stock Exchange, and such person has come to know it via his/her position or status enabling him/her to know the facts for his/her own interest or others whether by own action or disclosure to others to act. 2) The President, Group Executive and Department Manager or equivalent up in the Financial Management Group have to report their holding of securities issued by the Bank and those of spouse and child not coming of age to the Office of Securities and Exchange Commission of Thailand and report such holding as well as changes of shareholding to the Board of Directors regularly every month. 3) Responsible business unit must specify durations for limiting the trading of securities issued by the Bank and inform

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the rules and procedures on prevention of misusing inside information to the Directors, employees and related persons for acknowledgement through various Bank channels on regular basis. For transparency and verifiable, the Bank has shown information on Bank Securities Holdings by Directors and Top Executives and information of Directorship of Directors and Executives in the Bank, subsidiaries, associated companies and related companies on page 81-83 2.4 Practices for Related-Party Transactions For prevention of conflict of interest that may arise from conducting related-party transactions, the Bank has prescribed that market price shall be used in conducting transactions of all types. If market price is not available, the Bank stipulated that fair price is used in conducting such transaction, except transaction under requirement prescribed otherwise by the regulator the Bank will adhere to the practices under such requirement. 2.4.1 Necessity and Justifications of Related-Party Transactions Inter-party or related-party transactions conducted in 2008 were normal business transaction or normal business support transactions of the Bank. Such transactions are conducted under the same general trading conditions as those done with outsiders. Moreover, such conducts of interparty or related-party transactions were necessary for business operation and/ or supporting business operation with justifications of conducting for optimum interest of the Bank and its shareholders. The Bank’s Audit Committee had already considered inter-party transactions between the Bank or subsidiaries and related persons or persons who might have conflict of interest with the Bank or subsidiaries during the past period up to present, and was of the opinion that such transactions were conducted in accordance with general nature of business.

In addition, the Bank received and paid remunerations at market prices or fair prices, and also complied with the requirements of the regulators concerned with such transactions while relevant information was disclosed accurately and completely. 2.4.2 Measures for Related-Party Transactions Approval The Bank gives importance to prevention of conflict of interest from conducting inter-party or related transactions. In approving such transactions, the Bank has carefully considered the issues with integrity, good faith, justification and independence within moral ethical framework while adhering to the Code of Business Ethics and good corporate governance principles of the Bank. The Bank has assigned the Compliance Department to oversee and re-check the approval procedures of such transaction to be in compliance with the requirements prescribed by the regulators in addition to complying with the Bank procedures. As for any related-party transactions or related transactions prescribed by the regulators or by the Bank procedures requiring that such transaction must be approved by the Board of Directors, the Bank has prescribed the best practices of the Directors in relation to approval of relatedparty transactions or related transactions so as to prevent conflict of interest. Details are summarized as follows: 1) Each Director is required to disclose information on transactions that might bear conflict of interest, related-party transactions or related transactions as prescribed in the requirements of the Office of Securities and Exchange Commission of Thailand and the Stock Exchange of Thailand. 2) Director having conflict of interest is prohibited from approving such transaction. In conducting the related-party transaction, the Audit Committee shall participate and give opinion under the principles of good corporate governance and the requirements prescribed by the


Stock Exchange of Thailand. 3) Lending or investing in business in which the Director has interest must be unanimously approved by the Board of Directors without attendance of such Director. To prevent conflict of interest, pricing and terms and conditions must be determined in accordance with the Bank’s normal trading and with the same treatment given to general clients. 2.4.3 Policy on Conducting Future Related-Party Transactions In general business operation, if the Bank realizes that conducting relatedparty transactions in the future will benefit the Bank and its shareholders, the possibility will be that the Bank or subsidiaries will do so in compliance with the regulators’ requirements and the Bank’s measures for approval of related-party transactions as earlier described. Moreover, in conducting relatedparty transactions or related transactions in the future, the Bank will adhere to the same practices as those of conducting transactions with general clients on trading terms and conditions that are not different from those of general business or business of the same type. Remuneration paid or received from such transactions shall be in accordance with market price or fair price. Relevant information concerning related-party transactions or related transactions must be disclosed to the public in an accurate and complete manner in accordance with the regulatory requirements and criteria for considering justifications of related-party transactions as well as opinions of the Board of Directors and the Audit Committee. Information on related-party transactions conducted by Directors and top executives is shown in the Notes to the Financial Statements No. 3.21 Related-Party Transactions.

3. Consideration for Stakeholders

3.1 Treatment of Stakeholders The Bank recognized the rights and roles of various groups of stakeholders,

internally or externally, and has included it as an integral part in the Code of Conduct disclosed through respective media, such as the Bank intranet and website. It is also published as manuals distributed to all business units for strict compliance which could enable the Bank to have a sustainable growth. The practice guidelines are summarized below: Shareholders The Bank is determined to conduct business with prudence and transparency, making profits grow continuously and steadily, boosting its competitiveness and enhance value to the shareholders in the long run. Customers It is the Bank’s determination to serve all customers willingly and eagerly and with equality and fairness. All staffs are ready to assist customers with their problems, finding them appropriate solutions and keeping the confidentiality of their information except when it is stipulated by law or with customer’s written consent. Creditors The Bank honors the terms and conditions of borrowings made with respective creditors such as depositors, debenture holders and other creditors so as to retain its reputation and credibility. Trading Partners The Bank required its employees to strictly adhere to the Bank’s optimum interest regardless of self-interest or interest of related kin. Employees must provide accurate and complete information that will not impede the buyers’ or sellers’ decisions. Importantly, employees should avoid accepting gifts or rewards from buyers or sellers as well as attending private functions hosted by them so as to avoid any accusations or render special assistance in return on later occasion. Business Alliances The Bank is firmly determined to comply with the agreements made with its business partners and to provide assistance for mutual business benefits. Competitors The Bank has no policy to falsify or

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distort competitors’ facts. At the same time, the Bank avoids making deals or discussion with employees of other agencies or financial institutions on the issues concerning geographical locations, marketing, customer segmentation, interest rates, fees and commissions including products, services or business plans that may have negative impact on the Bank’s business competition. Social and Environmental Responsibility Relating to corporate social and environmental responsibility (CSER), the Bank focuses on creating intellectual capital in four dimensions: education, society and environment, art and culture and sports. CSER implementation has been under four principles namely 1) continuous operation 2) inter-project linking 3) Bank-wide staff participation and 4) networking of governmental and private organizations concerned. Employees The Bank is well aware that human resources are valuable to its progress and success. Hence, the Bank attaches importance to employees’ salary and benefits, a key factor in retaining competent staffs. Such benefits are based on individual’s performance, i.e. individual knowledge, work performance and the Bank’s operating performance comparing with business group of the same level. Moreover, the Bank provides opportunities to employees at all levels a clear and fair career advancement. Employees’ problems are taken into considerations for enhancing their welfare with the hope that better life quality will help boost working efficiency. During 2008 many improvements were done such as allowing employees to obtain housing loan whereby the property is joint ownership, increasing resident doctors in the Bank’s Medical Department and granting travel allowance to employees that work on weekends in 7-day branches. Additionally, the Bank attaches significance to enhance employees’ competency through self-learning courses that have been made more appropriate and

in line with the work in respective business groups. Diverse training courses have been set up continuously covering basic courses for employees at all levels and courses for specific positions such as Cross selling Presentation, KTB Product & Sale Champion and Cash Management. Also included were human resources development plans for highly competent staff in preparation for becoming future executives such as branch manager level up, KTB Talent Group, receivers of Bank scholarships, Management Trainee for Credit Analysis and Management Trainee, and granting of scholarships at postgraduate level. Besides, the Bank has given the importance to occupational safety and working condition through providing safe and favorable working ambiance and environment with security measures as prescribed by laws and stipulated by the Bank itself. Fire drills are held regularly every year while all business units and branches nationwide are required to prepare their emergency plans as practice guidelines for safety and for protecting the Bank’s property. Particularly in 2008 where severe political conflicts prevailed and insurgencies in the deep South still persisted, the Bank constantly monitored the situation and kept exploring the best measures for employees safety. Government Sector The Bank supported government’s operations and complied with the regulator’s requirements and policies in conjunction with promotion of collaboration in respective activities of governmental agencies so as to build national stability and growth. 3.2 Stakeholders’ Participation The Bank provides stakeholders with opportunities to participate in various activities through their own rights such as shareholders’ rights to express opinions independently in the Annual Ordinary General Meeting or propose agenda items or nominate appropriate persons for Directors. Other activities included merit-making on the anniversary of


Bank’s Foundation day, activities in honor of His Majesty the King’s Birthday and Songkran Day activities. Furthermore, the Bank fully supported stakeholders, as well as executives, employees, subsidiaries, customers, students, teachers, instructors and interested public, to participate in respective corporate social and environmental responsibility (CSER) activities of the Bank such as - Krung Thai Dream School project through giving financial support to respective schools across the country for development of IT and science studies. - Krung Thai Young Enterprise Awards project through competition of students’ business plans for supplementing their skills and paving the way for future careers. - KTB Business Ethics Initiative project encouraging students nationwide to compete in implementing business schemes with ethical conduct under sufficiency economy philosophy. - KTB Lecture Series project providing knowledge to customers, employees and interested public through discussions on topics of interest including economics, finance, innovation, art and culture. 3.3 Whistle Blowing & Complaints It is the Bank’s policy to enable stakeholders such as customers and general public to lodge their complaints directly to the Bank or express opinions through various channels as follows: - Call Center or Krung Thai Phone 1551 - http://www.ktb.co.th or http://www.contactcenter.ktb.co.th - E-mail: call@contactcenter.ktb.co.th - Fax: +662 255-9391 -3 - Customer Satisfaction questionnaire under Service Quality Assurance project - Corporate Secretary, Krung Thai Bank Pcl. Office of the Board of Directors & Shareholders 8th Floor, Nana Nua Bldg. 35 Sukhumvit Rd., Klong Toey Nua Subdistrict, Wattana District, Bangkok 10110

Complaints will be compiled and reported to the Audit Committee every month Bank employees are able to lodge complaints or opinions directly to the Board of Directors and the Management via e-mail in the intranet system. 4. Disclosure of Information and Transparency 4.1 Disclosure of Information as prescribed in Listed Company Requirements The Bank oversees that key information, financial and performance related data are disclosed accurately, completely, transparently, comprehensively and timely as prescribed in the requirements of the Office of Securities and Exchange Commission of Thailand and those of the Stock Exchange of Thailand. Apart from annual disclosure (Form 56-1) and the Annual Report (Form 56-2), most of the information is posted on the Bank’s website in Thai and English with regular updates, thus helping shareholders, customers and interested persons to access the information with ease, equality and reliability. Key information disclosed by the Bank included performance of the Directors over the year, Directors’ training records, roles of the Boards and sub-committees, number of meetings called, number of attendance of each Director and opinions from performing their duty as well as remuneration policy and remunerations of Directors and top executives that reflect their roles and responsibilities, shareholding structure, business operation and targets, operating performance, business ethics and corporate governance and social and environmental responsibility policy. 4.2 Disclosure of Information under Official Information Act, B.E.2540 (1997) As a state enterprise under the Ministry of Finance and a state agency under the Official Information Act, B.E.2540 (1997), the Bank has disclosed information to the general public in compliance with the Act completely and continuously for the people’s benefit. Implementation of this matter is summarized below:

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4.2.1 Information Dissemination through the IT System The Bank set a Quick Link from the website www.ktb.co.th to webpage eProcurement to provide interested public with news and information on procurement. In the webpage, all the information on procurements with individuals and external agencies from February 2003 onwards is depicted. In 2008, the Bank still publicized procurement notices on this website including price inquiry, bidding, cancellations, announcements of winners and auction. In addition to viewing information on procurement, interested persons are able to offer sale of goods or services through such system after having registered and complied with terms and conditions as stipulated by the Bank. 4.2.2 Disclosure of Bank and Customers’ Information to Requesting Agencies and Outsiders Government agencies and private enterprises are able to request for verification of information under the following terms and conditions: 1) Agencies with legal authority to request information, documentary evidences for verification or requesting Bank employees to testify in respective courts include court of law, Legal Execution Department, Revenue Department, Special Investigation Department, Royal Thai Police, Office of the Consumer Protection Board, Social Security Office, Office of the Securities and Exchange Commission of Thailand, Office of the National Counter Corruption Commission (NCCC), Anti-Money Laundering Office (AMLO), Office of the Narcotics Control Board, Office of the Auditor General Thailand, Ministry of Finance Inspector-General, the Office of the Ombudsman Inspector-General and the Bank of Thailand. Such agencies could request information and documentary evidences concerning application for account opening, transaction records of the account, deposit and withdrawal information and deposit account balances. 2) As for government agencies, private bodies and general public with no

legal authority of information verification most of which request personal information verification, the Bank is unable to disclose requested information. As stipulated in the Official Information Act, B.E. 2540 (1997), Section 24 government agencies are unable to disclose personal information under their supervision to other government agencies or others without prior written consent from the owner of such information. 4.3 Performance of the Board of Directors and Respective Committees 4.3.1 Name, Biography, Responsibility and Term of Office of Directors on Board Brief biography of the Directors and Executive officers on board is shown on pages 25-35, scope of authority and list of members on various committees is shown in Shareholding and Management Structure on pages 69-77 and appropriateness of the Board of Directors is shown on page 118. 4.3.2 Remunerations for the Board of Directors and Executive Officers The Bank structures its policy on remunerations fairly and reasonably with the reviewing of the Nominating and Remuneration Committee. The appropriateness and the consonance of the Directors’ responsibilities and financial standing of the Bank comparable to those of the same level of business are taken into consideration and must be in accordance with the resolution passed by the shareholders meeting. Remunerations are classified into four parts as follows: 1) Remuneration in capacity as Director at the rate of Baht 50,000 per month. 2) Ex-officio remuneration: (1) Chairman of the Board of Directors at the rate of Baht 130,000 per month. (2) Vice Chairman at the rate of Baht 30,000 per month. (3) Chairman of the Board of Executive Directors, Chairman of the Audit Committee, Chairman of the Nominating and Remuneration Committee and Chairman of the Corporate Governance and Social and Environmental Responsibility at the rate of


Baht 30,000 per month. 3) Meeting honorarium paid in accordance with number of attendance at the rate of Baht 30,000 per meeting. 4) Gratuity payment to Directors is paid on the following conditions: (1) the Bank makes a profit from the business and (2) the Bank pays dividend to shareholders. At the 15th Annual Ordinary General Meeting on April 25, 2008, the following remunerations were approved for the Board of Directors comprising remunerations for attending the Board meetings in 2008 and gratuity for Directors in 2007.

Remunerations for the Board of Directors in 2008 In 2008 the Bank paid remunerations in cash to the Board of Directors, ex-officio remuneration and meeting honorarium totaling Baht 28,072,666.67 broken down into: 1) Remuneration for the Board of Directors a total of Baht 17,581,666.67. 2) Remuneration for the Board of Executive Directors Baht 6,300,000, the Audit Committee Baht 1,281,000, the Nominating and Remuneration Committee Baht 1,260,000 and the Corporate Governance and Social and Environmental Responsibility Committee Baht 1,650,000 totaling Baht 10,491,000 with details are as follows:

Baht Name of Director

Board of Directors

Remuneration in Cash Corporate Nominating and Governance Board of Audit Social and Remuneration and Executive Environmental Committee Committee* Responsibility Directors Committee

1. Mr. Suparut Kawatkul 2,790,000.00 2. Dr. Chaiyawat Wibulswasdi 1,710,000.00 1,920,000.00 3. Mr. Aswin Kongsiri 1,290,000.00 1,380,000.00 4. Mr. Santi Vilassakdanont 1,260,000.00 300,000.00 690,000.00 5. Mr. Suri Buakhom 1,350,000.00 300,000.00 330,000.00 6. Mr. Pachara Yutidhammadamrong 1,290,000.00 506,000.00 7. Mr. Sima Simananta 1,320,000.00 660,000.00 330,000.00 8. Dr. Jamlong Atikul 1,350,000.00 1,560,000.00 1,320,000.00 330,000.00 9. Mr. Visut Montrivat 10. Mr. Dusit Nontanakorn 1,290,000.00 210,000.00 120,000.00 920,000.00 180,000.00 11. Dr. Pichit Likitkijsomboon 12. Mr. Apisak Tantivorawong 1,320,000.00 1,440,000.00 Director resigned during the year 1.Ms. Tanya Sirivedhin 371,666.67 235,000.00 Total remuneration according to 1) 17,581,666.67 Total remuneration according to 2) 6,300,000.00 1,281,000.00 1,260,000.00 1,650,000.00 Grand total according to 2) 10,491,000.00 Grand total 1) and 2) 28,072,666.67 Note: * Ex-officio remuneration of the Nominating and Remuneration Committee has not been reimbursed one more time which will be done in 2009.

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Gratuity for Directors in 2007 The Board of Directors allocated a total of Baht 16,449,999.97 as gratuity for Directors in 2007 as follows:

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Baht

Name of 1. Mr. Suparut 2. Dr. Chaiyawat 3. Mr. Aswin 4. Mr. Santi 5. Mr. Suri 6. Mr. Pachara 7. Mr. Sima 8. Dr. Jamlong 9. Mr. Visut 10. Mr. Dusit 11. Mr. Apisak 12. Ms. Tanya 13. Dr. Uttama Total

Director Kawatkul Wibulswasdi Kongsiri Vilassakdanont Buakhom Yutidhammadamrong Simananta Atikul Montrivat Nontanakorn Tantivorawong Sirivedhin Savanayana

As for executives who have power to manage the bank, namely President, Group Executives and Sector Executives, totaling 52 persons, during 2008, the Bank paid a total of Baht 231,336,887.00. Such remunerations classified as salary, business unit allowance, special incentives and provident fund (only to Sector Executives). 4.3.3 Performance of the Board of Directors The SOE Award as distinctive state enterprise from the State Enterprise Policy Office and the Award on Corporate Governance Report of Thai Listed Companies Five-Star from the Thai Institute of Directors Association (IOD) as well as survey results and CSR ratings of over 700 Asian Companies listed on stock exchanges in Hong Kong, Malaysia, Singapore and Thailand which showed that Krung Thai Bank was ranked 41 st, the best of the five Thai financial institutions passing the assessment, have reflected the full dedication and

Gratuity 1,824,876.74 1,622,112.66 1,419,348.57 1,419,348.57 1,216,584.49 1,216,584.49 1,419,348.57 1,419,348.57 1,216,584.49 584,404.97 1,419,348.57 1,419,348.57 252,760.71 16,449,999.97

devotion of the Board of Directors. Not only that executives and staff members have strongly collaborated in performing the mission set forth especially in creating corporate governance excellence thus enabling the Bank to enjoy steady and sustainable growth. Details of the performance of each board or committee are shown in the report of the Corporate Governance and Social and Environmental Responsibility Committee page 105, report of the Nominating and Remuneration Committee page 106 and report of the Audit Committee page 121. 4.4 Quality of Financial Statements The Board of Directors attaches the importance to and takes responsibility for the consolidated financial statements of the Bank and subsidiaries including financial information in the Annual Report. Such financial statements are prepared in accordance with the accounting standards and generally accepted accounting principles


through the use of appropriate accounting policy with prudence, accuracy and completeness so as to reflect the real operating performance of the Bank. Operating performance and key information are disclosed transparently and adequately through continuous and timely reports to the Stock Exchange of Thailand for the benefit of shareholders and general investors. Apart from this, the Board has appointed the Audit Committee comprising independent directors with expertise and experience in this field to oversee and review the reliability and accuracy of financial statements as well as the adequacy and appropriateness of the internal control systems thus ensuring that the Bank’s financial statement are reliable.

Type of Call One-on-One Meeting & Conference Call Analyst Meeting Roadshow Total

Contact with Financial Institutions & Investor Relations Department Telephone : +662 208 3668 - 9 Fax. : +662 256 8800 E-mail : ir@ktb.co.th Address : Krung Thai Bank Pcl 7th Floor, Nana Nua Bldg. 35 Sukhumvit Rd., Klong Toey Nua Subdistrict Wattana District, Bangkok 10110 Website : http://www.ktb.co.th (select “Investor Relations”)

Type of Communications Press Release Press Conference Press Interview Total

4.5 Investor Relations The Financial Institutions & Investor Relations Department has been assigned to take the responsibility of providing and disseminating information and activities of the Bank for the benefits of all concerned such as investors of all types, stock analysts, fund managers both local and foreign as well as government agencies concerned on equal and fair basis through diverse organized activities. During 2008, the Bank’s executives and investor relations officers met with respective analysts and investors on various occasions and provided them with useful information as follows:

Number of Call 99 4 - 103

Moreover, the Bank has provided the press and media with a Press Room on the 2nd Floor, Nana Nua Building equipped with computer and accessories for convenience of the mass media in publicizing the Bank’s news and activities. The Marketing and Corporate Communications Department is responsible for coordination with the press for interviews with Bank executives and other public relations task. For 2008 details as follows:

Number of Time 184 19 59 262

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5. Responsibility of the Board of Directors

Ann ual Report 2008 Krung Thai Bank Pcl.

5.1 Independence from the Management The Board of Directors assumes responsibility for performing its duty and is truly independent from the Management for the optimum benefits of the Bank and shareholders. There exists clear segregation of duty and responsibility between the Board of Directors and the Management. In this respect, the Board of Directors will formulate policies and oversee that work systems proceed lawfully and ethically under the respective policies. Moreover, for proper check-and-balance, the Chairman of the Board of Directors, the Chairman of the Board of Executive Directors and the President are all different persons. 5.2 Appropriateness of the Board of Directors The number of Directors is in accordance with the Articles of Association, Article 19 which stipulates that “There shall be no less than 7 directors and no more than 15 directors as determined by the general meeting from time to time and no less than half of the total number of directors must reside in the Kingdom”. The total number of directors remains at 12 in accordance with the resolution of the Annual Ordinary General Meeting in 2007 with term of office under the charter of each committee. Article 22 has prescribed that one-third of the directors must retire at each annual general meeting. If the number cannot be divided exactly into onethird, such number must be closest to onethird. Unless otherwise agreed among themselves, the directors to retire during the first and the second times shall be drawn by lots and subsequently the director that has been longest in the office shall retire. A retiring director is eligible for re-election. In 2008, four Directors had to leave, the Bank thus included the election of directors to replace

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the retiring ones on the agenda of the 15th Annual Ordinary General Meeting on April 25, 2008 at which the Board of Directors approved the nomination of Directors as submitted by the Nominating and Remuneration Committee. The General Meeting resolved by majority votes to elect the existing three Directors to take up their office for another term and appointed one new Director to replace the retiring Director who did not wish to be re-nominated. All the 12 Directors have diverse qualifications with respect to skills, experience and specialization beneficial to the Bank (details are shown in Brief Biography of the Board of Directors and Executives page 25-35) including full devotion to their performance. Besides, the Independent Directors with qualifications as defined by the Bank with details on page 74-76, comprise as many as 7 Directors, more than the requirement of at least one-third of the Directors but not less than 3 as prescribed by the Office of the Securities and Exchange Commission of Thailand.

5.3 Transparency in Nominating Directors

In screening and nominating the Directors, the Bank has clearly and transparently prescribed the criteria and conditions as disclosed in “Nominating Directors and Executives” on page 77-80 . 5.4 Efficiency of the Board of

Directors

5.4.1 Formulating Policies and Overseeing Management The Board of Directors has performed its duty honestly and prudently safeguarding the shareholders’ interest particularly in giving its consent on the vision, mission, strategy and approving key issues relating to operating direction and policy, as well as business plan and annual budget. In so doing, the Board has adopted principles of


logic and justification with sound analyses of business condition and social and environmental factors. In the last quarter of each year, the Board calls a meeting to review the Bank’s policies and targets before delegating to the Management to formulate into efficient operating strategy together with the business units and branches nationwide so all will move towards a unified target. Moreover, the Board of Directors oversees the performance of the Management that it is in accordance with the key performance indicators (KPIs) determined at the beginning of the year. Operating performance is monitored on a monthly and quarterly basis so as to know the status at every stage. If the operating performance falls short of the target, the Board will conduct an analysis to find the root causes for further solutions. At year-end, the Board will compare the Management’s performance with the KPIs set under the Performance Agreement (PA). In addition, the Board controls and verifies the Management work to ensure transparency and compliance with the Bank’s code of conduct effective since 1998, with update and revision to suit the changing working environment. The Board also required a preparation of the Bank’s code of conduct as stipulated in the constitution of the Royal Kingdom of Thailand B.E. 2550 (2007), Article 279 and in accordance with the core value as recommended by the Ombudsman, Office of the Ombudsman. Such code will serve as ethical standards and guidelines for regulatory compliance of the Management and Bank employees at all levels since they are state officers as well. Concerning directorship of the President and top executives in other companies, the Bank has formulated clear policy as to type of directorship and number of companies in which they are entitled to hold the post, and such directorship holding must be first approved by the Board of Directors. Apart from this, the Bank has

established practices on holding posts in other companies in accordance with the Standard Qualitications for State Enterprise Board Members and Staff Act, the Financial Institutions Business Act, the Securities and Exchange Act and other relevant laws. For example, directors, are entitled to hold the post of Chairman, Executive Director or authorized signatory director in no more than three other business sectors. The Bank disclosed information on directorship in other companies of each Director on page 82-83. 5.4.2 Relevant Committees The Board of Directors has appointed respective committees to help study and scrutinize the task as deemed necessary to ensure the Board’s greater efficiency and effectiveness in performing its duty as described in “Shareholding and Management Structure” page 76-77. 5.4.3 Board of Directors Meeting The Bank sets schedules for the Board meeting regularly in advance throughout the year. In 2008, the meetings were scheduled for the first and third Thursdays of each month. Special Board sessions may be called as deemed appropriate. In this regard, the Bank would send meeting notice in advance to each Director directly and via the Bank’s intranet to enable the Directors to manage their time for attending the Board meetings. For each meeting, the Secretary to the Board of Directors will send invitation with agenda and attachments to all Directors no less than seven days prior to the meeting date and will record written minutes of each meeting. The Board of Directors attaches significance to presentation of agenda assigning the Management to clearly specify criteria and steps of agenda presentation into various groups. Such agenda item groups include Chairman’s statement for information, adoption of previous meeting’s minutes, on-going issues, policies, credit, debt restructuring, investment, property trading and procurement, human resources, issues for

119


Ann ual Report 2008 Krung Thai Bank Pcl.

information and other businesses. The Board also assigns respective committees related to each particular agenda item to scrutinize information, giving opinions and recommendations prior to submission to the Chairman for approval of inclusion in the agenda for prudence through risk management in all aspects. Besides, the Board has policy to allow the Independent Directors to call meetings among themselves without the Management’s attendance to discuss various issues of interest concerning management and result of the meeting will be reported to the President. During 2008, three meetings of Independent Directors were called. Details of attendance of committees’ meetings are shown in “Shareholding and Management Structures” page 80. 5.4.4 Self-Assessment of Individual Performance The Bank requires the Board of Directors to conduct self-assessment twice a year so as to reflect operational efficiency under principles of good corporate governance, details of which are shown in “Shareholding and Management Structures” page 79-80.

120

5.4.5 Development of Directors and Executives The Bank urges Directors and executives to undergo training to enhance their knowledge on a continuous and regular basis. Details are shown in “Brief Biography of Board of Directors and Executive Officers” page 25-35. Moreover, upon changing Director, the Bank organizes orientation to present key information for the newly appointed Director. In 2008, such program was arranged for Dr. Pichit Likitkijsomboon with details in “Directors Orientation” page 78-79. 5.5 Corporate Secretary It is the Bank’s policy to appoint the Secretary to the Board of Directors and the Corporate Secretary to be in compliance with the Securities and Exchange Act (No 4), B.E. 2551 (2008) and principles of good corporate governance of the Bank. Core duties and responsibilities are detailed in “Shareholding and Management Structures” page 80-81. Besides, the Bank insists that the Corporate Secretary is trained in a specifically organized course entitled Company Secretary Program (CSP) by the Thai Institute of Directors Association (IOD) to enable him/her to perform the duty more efficiently.


Report of the Audit Committee The Audit Committee comprises three Independent Directors, each of whom has a three-year term of office. One year refers to the period from the Ordinary General Meeting of the year in which the Director is appointed to the next Ordinary General Meeting. During 2008, the Audit Committee called 11 meetings to consider issues within its scope of responsibility as well as performing other tasks delegated by the Board of Directors. The Audit Committee reported the outcome of each meeting to the Board of Directors, details of which are summarized as follows: • Reviewed the monthly operating performance, the quarterly, half-yearly and annual financial statements with the external auditor and Management of the Accounting Department, to ensure that the accounting system and the financial reports were prepared in accordance with generally accepted accounting principles and that the disclosures of information were adequate, complete and reliable. • Reviewed transactions between the Bank and subsidiaries including connected-party transactions or transactions that might lead to conflict of interest, so as to ensure that they were in accordance with normal business practices, that information disclosures were adequate and transparent, and that there were no transactions with significant negative impact on the Bank. • Reviewed risk management processes, internal audit reports and internal control assessments, and exchanged views with Senior Managements. Monitored the internal control system and control self-assessment in accordance with the Office of the Auditor General of Thailand’s regulation governing Internal Control Standards, B.E. 2544 (2001) as to ensure that the Bank’s internal control system was appropriate and adequate. • Reviewed regularly with the Management to ensure that the Bank complies with legal provisions and requirements of regulators such as the Office of the Auditor General of Thailand, the Bank of Thailand and the Bank’s operating procedures and regulations. • Consulted with Senior Management concerning crucial management issues that might adversely affect the Bank. • Recommended the external auditor and its remuneration to the Board of Directors for approval at the shareholders’ meeting. • Approved the new charter of the Internal Audit Group, acknowledged the appointment of the Internal Audit Group’s Senior Management, the audit plan and annual budget, as well as the annual review plan of Bank’s loans and contingency obligations ensuring that objectives and scope of audit covered major risk exposures in each business unit and at activity level. The Audit Committee performed its duty with prudence and independence. All the opinions expressed were straightforward, transparent and verifiable, and in accordance with good corporate governance. In this regard, the Audit Committee is of the opinion that the Bank’s financial statements and disclosure of information are complete and reliable, consistent with generally accepted accounting principles. Overall risk management and internal control systems have been implemented effectively and appropriately. Internal audits have been independently conducted in compliance with internal audit standards covering all high-risk processes. Moreover, there are adequate system of control to ensure compliance with applicable laws and regulations, consistent with the current business environment.

(Mr. Pachara Yutidhammadamrong) Chairman of the Audit Committee January 22, 2009

121


The Board of Directors’ Responsibility for Financial Reports

Ann ual Report 2008 Krung Thai Bank Pcl.

The Board of Directors attaches importance to and takes responsibility for the consolidated financial statements of Krung Thai Bank and its subsidiaries, as well as all the financial information appeared in the annual report. Such financial statements have been prepared in accordance with the generally accepted accounting principles and standards using appropriate accounting policy with care, accuracy and completeness to reflect the true operating performance of the Bank. In this connection, the Bank has reported to the Stock Exchange of Thailand continuously for the benefit of the shareholders and general investors. The Board of Directors has appointed the Audit Committee consisting entirely of Independent Directors to oversee and review the reliability and accuracy of the financial reports, including the internal control system which has to be adequate and appropriate to ensure that the Bank’s financial statements are truly reliable.

(Mr. Suparut Kawatkul) Chairman of the Board of Directors

122

(Mr. Apisak Tantivorawong) President


Report of the Independent Certified Public Accountants

To the Shareholders of Krung Thai Bank Public Company Limited

The Office of the Auditor General has audited the accompanying consolidated and the Bank’s Balance Sheet as at December 31, 2008 and 2007, and the related consolidated and the Bank’s Statements of Income, Changes in Shareholders’ Equity, and Cash Flows for the years then ended of Krung Thai Bank Public Company Limited and its subsidiaries and of the Krung Thai Bank Public Company Limited, respectively. These financial statements are the responsibility of the Bank’s management as to their correctness and completeness of the presentation. The responsibility of the Office of the Auditor General is to express an opinion on these financial statements based on its audits. The Office of the Auditor General conducted the audits in accordance with generally accepted auditing standards. Those standards require that the Office of the Auditor General plan and perform the audit to obtain reasonable assurance as to whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. The Office of the Auditor General believes that the audits provide a reasonable basis for the opinion. In the opinion of the Office of the Auditor General, the consolidated and the Bank’s financial statements referred to above present fairly, in all material respects, the financial position of Krung Thai Bank Public Company Limited and its subsidiaries and of the Krung Thai Bank Public Company Limited as at December 31, 2008 and 2007, and the results of its operations, the Changes in Shareholders’ Equity, and the Cash Flows for the years then ended of Krung Thai Bank Public Company Limited and its subsidiaries in accordance with generally accepted accounting principles. Without qualifying opinion, we draw attention to Note to the financial statements No.3.32 regarding loans under execution of the Attorney General.

JARUVAN MAINTAKA

(Khunying Jaruvan Maintaka) Auditor General

WIBULPHEN HITAPHAN (Ms. Wibulphen Hitaphan)

Office of the Auditor General February 19, 2009

Senior Audit Specialist Level 9

123


KRUNG THAI BANK PUBLIC COMPANY LIMITED AND SUBSIDIARIES

BALANCE SHEETS

AS AT DECEMBER 31, 2008 AND 2007 (Baht)

Ann ual Report 2008 Krung Thai Bank Pcl.

NOTE

CONSOLIDATED FINANCIAL STATEMENTS THE BANK’S FINANCIAL STATEMENTS 2007 2008 2007 2008

ASSETS CASH 34,519,836,413 21,456,426,555 34,518,986,606 21,455,775,912 INTERBANK AND MONEY MARKET ITEMS 3.2 DOMESTIC ITEMS INTEREST BEARING 69,561,415,775 49,828,311,439 69,487,487,403 49,802,351,641 NON-INTEREST BEARING 5,889,233,564 4,029,473,302 5,873,474,005 4,024,143,110 FOREIGN ITEMS INTEREST BEARING 16,640,218,210 20,898,986,198 16,640,218,210 20,898,986,198 NON-INTEREST BEARING 931,655,070 1,251,523,353 931,655,070 1,251,523,353 TOTAL INTERBANK AND MONEY MARKET ITEMS, NET 93,022,522,619 76,008,294,292 92,932,834,688 75,977,004,302 SECURITIES PURCHASED UNDER RESALE AGREEMENTS 3.3 - 600,000,000 - 600,000,000 INVESTMENTS 2.4 3.4 CURRENT INVESTMENTS, NET 45,404,900,264 21,250,859,084 45,404,900,264 21,131,726,050 LONG-TERM INVESTMENTS, NET 59,917,737,328 83,532,573,669 59,917,737,308 83,532,573,649 INVESTMENTS IN SUBSIDIARIES AND ASSOCIATED COMPANIES, NET 6,188,237,865 5,340,847,000 5,705,771,104 6,337,386,871 TOTAL INVESTMENTS, NET 111,510,875,457 110,124,279,753 111,028,408,676 111,001,686,570 LOANS AND ACCRUED INTEREST RECEIVABLE 2.5 3.5 LOANS 1,042,497,939,138 954,571,215,127 1,046,085,832,380 958,083,977,003 ACCRUED INTEREST RECEIVABLE 4,835,461,554 5,156,234,120 4,838,786,175 5,160,504,964 TOTAL LOANS AND ACCRUED INTEREST RECEIVABLE 1,047,333,400,692 959,727,449,247 1,050,924,618,555 963,244,481,967 LESS ALLOWANCE FOR DOUBTFUL ACCOUNTS 2.6 3.6 (35,075,264,155) (35,574,005,942) (34,889,472,894) (35,527,786,794) LESS REVALUATION ALLOWANCE FOR DEBT RESTRUCTURING 2.7 3.7 (509,621,319) (1,393,638,695) (509,621,319) (1,393,638,695) TOTAL LOANS AND ACCRUED INTEREST RECEIVABLE, NET 1,011,748,515,218 922,759,804,610 1,015,525,524,342 926,323,056,478 PROPERTIES FORECLOSED, NET 2.9 3.8 37,579,787,915 34,717,802,523 37,551,818,098 34,712,283,494 CUSTOMERS’ LIABILITIES UNDER ACCEPTANCES 5,249,248,610 7,402,418,280 5,249,248,610 7,402,418,280 PREMISES AND EQUIPMENT, NET 2.8 3.9 22,554,872,756 21,742,315,245 19,181,917,898 19,120,745,703 OTHER DEBTORS - SUKHUMVIT ASSET MANAGEMENT CO., LTD. 32,572,588 32,572,588 32,572,588 32,572,588 NET INTANGIBLE ASSETS 2.10 3,297,658,307 2,984,175,828 1,147,378,572 771,850,103 OTHER ASSETS 3.10 10,859,866,435 14,893,953,320 10,015,313,515 13,932,759,746 TOTAL ASSETS 1,330,375,756,318 1,212,722,042,994 1,327,184,003,593 1,211,330,153,176 NOTES TO THE FINANCIAL STATEMENTS ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.

124


KRUNG THAI BANK PUBLIC COMPANY LIMITED AND SUBSIDIARIES BALANCE SHEETS (CONTINUED) AS AT DECEMBER 31, 2008 AND 2007

(Baht)

NOTE

CONSOLIDATED FINANCIAL STATEMENTS THE BANK’S FINANCIAL STATEMENTS 2008

2007

2008

2007

LIABILITIES AND SHAREHOLDERS’ EQUITY DEPOSITS 2.16 3.11 DEPOSITS IN BAHT 1,041,434,412,305 991,648,220,910 1,041,750,426,588 993,075,059,873 DEPOSITS IN FOREIGN CURRENCIES 21,781,477,221 9,022,704,500 21,781,477,221 9,022,704,500 TOTAL DEPOSITS 1,063,215,889,526 1,000,670,925,410 1,063,531,903,809 1,002,097,764,373 INTERBANK AND MONEY MARKET ITEMS 3.12 DOMESTIC ITEMS INTEREST BEARING 29,353,949,814 33,453,114,260 29,373,536,753 33,482,959,528 NON-INTEREST BEARING 2,599,133,037 1,586,351,671 2,599,133,037 1,586,351,671 FOREIGN ITEMS INTEREST BEARING 4,269,608,349 4,242,698,226 4,269,608,349 4,242,698,226 NON-INTEREST BEARING 223,898,723 318,924,244 223,898,723 318,924,244 TOTAL INTERBANK AND MONEY MARKET ITEMS 36,446,589,923 39,601,088,401 36,466,176,862 39,630,933,669 LIABILITIES PAYABLE ON DEMAND 3,004,235,951 3,390,256,420 3,004,235,951 3,390,256,420 BORROWINGS 3.13 SHORT-TERM BORROWINGS 48,918,234,648 14,560,979,211 48,918,234,648 14,560,979,211 LONG-TERM BORROWINGS 51,308,025,000 35,820,806,000 51,308,025,000 35,820,806,000 TOTAL BORROWINGS 100,226,259,648 50,381,785,211 100,226,259,648 50,381,785,211 BANK’S LIABILITIES UNDER ACCEPTANCES 5,249,248,610 7,402,418,280 5,249,248,610 7,402,418,280 PROVISIONS, CONTINGENT LIABILITIES 2.20 3.14 2,712,923,220 2,715,805,461 2,712,923,220 2,715,805,461 ACCRUED INTEREST PAYABLE 4,398,006,970 4,952,262,340 4,398,071,063 4,952,262,340 OTHER CREDITORS - THAI ASSET MANAGEMENT CO., LTD. 24,488,269 25,417,185 24,488,269 25,417,185 OTHER LIABILITIES 3.15 11,469,984,141 7,921,653,195 10,479,450,188 7,032,432,254 TOTAL LIABILITIES 1,226,747,626,258 1,117,061,611,903 1,226,092,757,620 1,117,629,075,193 SHAREHOLDERS’ EQUITY SHARE CAPITAL 3.16 AUTHORIZED SHARE CAPITAL PREFERRED SHARE CAPITAL 5,500,000 @ 5.15 Baht 28,325,000 28,325,000 28,325,000 28,325,000 ORDINARY SHARE CAPITAL 11,191,412,250 @ 5.15 Baht 57,635,773,087 57,635,773,087 57,635,773,087 57,635,773,087 ISSUED AND PAID-UP SHARE CAPITAL PREFERRED SHARE CAPITAL 5,500,000 @ 5.15 Baht 28,325,000 28,325,000 28,325,000 28,325,000 ORDINARY SHARE CAPITAL 11,179,749,000 @ 5.15 Baht 57,575,707,350 57,575,707,350 57,575,707,350 57,575,707,350 NOTES TO THE FINANCIAL STATEMENTS ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.

125


KRUNG THAI BANK PUBLIC COMPANY LIMITED AND SUBSIDIARIES BALANCE SHEETS (CONTINUED) AS AT DECEMBER 31, 2008 AND 2007

(Baht)

A nnual Report 2008 Krung Thai Bank Pcl.

THE BANK’S FINANCIAL STATEMENTS NOTE CONSOLIDATED FINANCIAL STATEMENTS 2007 2008 2008 2007

LIABILITIES AND SHAREHOLDERS’ EQUITY (CONTINUED) PREMIUM ON ORDINARY SHARE CAPITAL 1,207,650 1,207,650 1,207,650 1,207,650 APPRAISAL SURPLUS ON ASSETS REVALUATION 5,973,154,085 5,973,154,085 5,971,499,705 5,971,499,705 REVALUATION SURPLUS (DEFICIT) (563,790,060) 383,838,457 (1,463,583,582) (157,133,892) ON INVESTMENTS 3.4.6 RETAINED EARNINGS APPROPRIATED LEGAL RESERVE 3.17 3,421,464,163 2,811,464,163 3,421,464,163 2,811,464,163 UNAPPROPRIATED 37,192,061,147 28,886,731,740 35,556,625,687 27,470,008,007 MINORITY INTERESTS 725 2,646 - - TOTAL SHAREHOLDERS’ EQUITY 103,628,130,060 95,660,431,091 101,091,245,973 93,701,077,983 TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY 1,330,375,756,318 1,212,722,042,994 1,327,184,003,593 1,211,330,153,176

OFF - BALANCE SHEET ITEMS - 3.19 CONTINGENCIES AVAL TO BILLS AND GUARANTEES OF LOANS 5,263,108,459 6,128,436,223 5,263,108,459 6,128,436,223 LIABILITIES UNDER UNMATURED 88,286,768 127,108,278 88,286,768 127,108,278 IMPORT BILLS LETTERS OF CREDIT 20,004,706,228 16,104,628,052 20,004,706,228 16,104,628,052 OTHER CONTINGENCIES 511,815,953,180 320,599,338,415 511,815,953,180 320,599,338,415 NOTES TO THE FINANCIAL STATEMENTS ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.

SUPARUT KAWATKUL (Mr. Suparut Kawatkul) Chairman of the Board of Directors

126

APISAK TANTIVORAWONG (Mr. Apisak Tantivorawong) President


KRUNG THAI BANK PUBLIC COMPANY LIMITED AND SUBSIDIARIES

STATEMENTS OF INCOME

FOR THE YEARS - ENDED DECEMBER 31, 2008 AND 2007

(Baht)

NOTE

CONSOLIDATED FINANCIAL STATEMENTS THE BANK’S FINANCIAL STATEMENTS 2008

2007

2008

2007

INTEREST AND DIVIDEND INCOME 2.2 LOANS 56,520,456,003 54,052,569,780 56,220,912,550 54,217,762,421 INTERBANK AND 6,196,871,056 4,134,157,524 6,019,268,376 MONEY MARKET ITEMS 4,138,706,463 INVESTMENTS 4,790,042,337 5,927,822,884 5,158,382,314 6,175,627,879 TOTAL INTEREST AND DIVIDEND INCOME 65,449,204,803 66,177,263,720 65,513,452,388 66,412,658,676 INTEREST EXPENSE 2.3 DEPOSITS 15,558,950,299 18,478,646,125 15,560,740,794 18,480,656,750 INTERBANK AND 474,639,879 834,331,156 475,026,503 833,260,817 MONEY MARKET ITEMS SHORT-TERM BORROWINGS 1,064,045,751 861,911,884 1,064,045,751 861,911,884 LONG-TERM BORROWINGS 2,535,740,292 1,964,060,660 2,535,740,292 1,964,060,660 TOTAL INTEREST EXPENSE 19,633,376,221 22,138,949,825 19,635,553,340 22,139,890,111 NET INTEREST AND DIVIDEND INCOME 45,815,828,582 44,038,313,895 45,877,899,048 44,272,768,565 BAD DEBTS AND DOUBTFUL ACCOUNTS 10,906,139,543 19,575,194,511 10,700,000,000 19,500,000,000 NET INTEREST AND DIVIDEND INCOME AFTER BAD DEBTS AND DOUBTFUL ACCOUNTS 34,909,689,039 24,463,119,384 35,177,899,048 24,772,768,565 NON - INTEREST INCOME NET GAIN (LOSS) ON INVESTMENTS 3.4.7 (959,294,298) 1,180,096,757 (716,884,985) 1,186,799,854 SHARE OF GAIN FROM INVESTMENTS 726,350,413 452,988,475 - - ON EQUITY METHOD FEES AND SERVICE INCOME ACCEPTANCES, AVAL AND GUARANTEES 1,111,603,968 1,128,545,726 797,533,215 765,866,026 OTHERS 6,821,908,771 6,003,408,748 6,866,513,629 6,004,024,682 EXCHANGE GAIN 1,152,363,950 672,078,673 1,152,363,950 672,078,673 REVERSAL OF LOSS ON IMPAIRMENT OF PROPERTIES FORECLOSED 159,554,685 247,342,396 175,097,099 247,342,396 REVERSAL OF LOSS ON IMPAIRMENT - 17,993,598 - 17,993,598 OF LAND REVERSAL OF LOSS ON IMPAIRMENT 2,732,116 - 2,732,116 - OF OTHER ASSET 1,325,870,724 1,502,750,615 1,144,556,583 OTHER INCOME 2,143,020,182 TOTAL NON - INTEREST INCOME 11,158,239,787 11,028,325,097 9,780,105,639 10,038,661,812

NOTES TO THE FINANCIAL STATEMENTS ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.

127


KRUNG THAI BANK PUBLIC COMPANY LIMITED AND SUBSIDIARIES STATEMENTS OF INCOME (CONTINUED) FOR THE YEARS - ENDED DECEMBER 31, 2008 AND 2007

(Baht)

Ann ual Report 2008 Krung Thai Bank Pcl.

NOTE

CONSOLIDATED FINANCIAL STATEMENTS THE BANK’S FINANCIAL STATEMENTS 2008

2007

2008

2007

NON - INTEREST EXPENSES PERSONNEL EXPENSES 13,583,942,777 12,738,728,964 12,547,927,085 11,780,011,960 PREMISES AND EQUIPMENT EXPENSES 5,313,327,606 4,954,381,168 3,625,257,218 3,298,501,052 TAXES AND DUTIES 2,495,429,160 2,482,709,724 2,494,299,372 2,480,976,212 FEES AND SERVICE EXPENSES 586,395,436 445,481,045 500,873,686 363,329,526 DIRECTORS’ REMUNERATION 61,229,282 70,514,754 44,522,666 56,562,325 CONTRIBUTION TO THE FINANCIAL INSTITUTIONS DEVELOPMENT FUND AND DEPOSIT PROTECTION AGENCY 4,154,586,679 4,025,717,357 4,154,586,679 4,025,717,357 LOSS ON IMPAIRMENT OF OTHER ASSET 198,953,747 34,400,823 198,953,747 34,400,823 OTHER EXPENSES 3,937,163,619 3,263,553,197 5,938,542,104 5,659,349,621 TOTAL NON - INTEREST EXPENSE 30,331,028,306 28,015,487,032 29,504,962,557 27,698,848,876 INCOME BEFORE INCOME TAX 15,736,900,520 7,475,957,449 15,453,042,130 7,112,581,501 INCOME TAX EXPENSE 2.17 3,465,146,646 1,069,026,700 3,400,000,000 1,000,000,000 NET INCOME 12,271,753,874 6,406,930,749 12,053,042,130 6,112,581,501 PROFIT SHARING BANK’S SHAREHOLDER 12,271,753,857 6,406,930,764 12,053,042,130 6,112,581,501 MINORITY INTEREST 17 (15) - - 12,271,753,874 6,406,930,749 12,053,042,130 6,112,581,501 BASIC EARNINGS PER SHARE 2.18 1.10 0.57 1.08 0.55 DILUTED EARNINGS PER SHARE 2.18 1.10 0.57 1.08 0.55

NOTES TO THE FINANCIAL STATEMENTS ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.

SUPARUT KAWATKUL (Mr. Suparut Kawatkul) Chairman of the Board of Directors

128

APISAK TANTIVORAWONG (Mr. Apisak Tantivorawong) President


57,604,032,350 1,207,650 5,976,648,087 (1,849,803,032) - - (3,494,002) - - - - 2,233,641,489 - - (3,494,002) 2,233,641,489

2,501,464,163 - - -

28,495,127,716 - - -

NOTES TO THE FINANCIAL STATEMENTS ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.

ADJUSTMENT B/F RETAINED EARNINGS OF SUBSIDIARIES AND ASSOCIATED - - - BALANCE AFTER ADJUSTMENT 57,604,032,350 1,207,650 5,973,154,085 REVALUATION DEFICIT ON INVESTMENTS - - - UN-RECOGNIZED ITEMS IN INCOME STATEMENTS - - - DIVIDENDS PAYABLE - - - NET INCOME 3.18 - - - ENDING BALANCE AS AT DECEMBER 31, 2008 57,604,032,350 1,207,650 5,973,154,085

- 383,838,457 (947,628,517) (947,628,517) - - (563,790,060)

- 2,811,464,163 - - - 610,000,000 3,421,464,163

TOTAL

(Baht)

- (1,938) (1,938) 28,886,731,740 708 95,660,429,153 - - (947,628,517) - - (947,628,517) (3,356,424,450) - (3,356,424,450) 11,661,753,857 17 12,271,753,874 37,192,061,147 725 103,628,130,060

95,660,431,091

(93) (5,705,326,740) 6,406,930,749 95,660,431,091

2,754 92,728,679,688 - (3,494,002) - 2,233,641,489 - 2,230,147,487

- - - - - - (93) - - - - (5,705,326,740) - NET INCOME - - - - 310,000,000 6,096,930,764 (15) ENDING BALANCE AS AT DECEMBER 31, 2007 57,604,032,350 1,207,650 5,973,154,085 383,838,457 2,811,464,163 28,886,731,740 2,646

BEGINNING BALANCE AS AT JANUARY 1, 2008 57,604,032,350 1,207,650 5,973,154,085 383,838,457 2,811,464,163 28,886,731,740 2,646

DECREASED OF MINORITY INTERESTS IN CLOSED SUBSIDIARIES DIVIDENDS PAID 3.18

BEGINNING BALANCE AS AT JANUARY 1, 2007 REVALUATION SURPLUS ON LAND REVALUATION SURPLUS ON INVESTMENTS UN-RECOGNIZED ITEMS IN INCOME STATEMENTS

RETAINED EARNINGS REVALUATION MINORITY SURPLUS (DEFICIT) APPROPRIATED SHAREHOLDERS ON INVESTMENTS LEGAL RESERVE UNAPPROPRIATED

CONSOLIDATED FINANCIAL STATEMENTS

ISSUED AND PREMIUM ON APPRAISAL NOTE PAID-UP SHARE SURPLUS SHARE CAPITAL CAPITAL

FOR THE YEARS - ENDED DECEMBER 31, 2008 AND 2007

STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY

KRUNG THAI BANK PUBLIC COMPANY LIMITED AND SUBSIDIARIES

129


Ann ual Report 2008 Krung Thai Bank Pcl.

57,604,032,350 1,207,650 - - - - - - 57,604,032,350 1,207,650

BEGINNING BALANCE AS AT JANUARY 1, 2008 REVALUATION SURPLUS ON INVESTMENTS UN-RECOGNIZED ITEMS IN INCOME STATEMENTS DIVIDENDS PAYABLE NET INCOME 3.18 ENDING BALANCE AS AT DECEMBER 31, 2008

(2,224,879,718) - 2,067,745,826 2,067,745,826 - - (157,133,892)

NOTES TO THE FINANCIAL STATEMENTS ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.

2,811,464,163 - - - 610,000,000 3,421,464,163

2,501,464,163 - - - - 310,000,000 2,811,464,163

27,470,008,007 - - (3,356,424,450) 11,443,042,130 35,556,625,687

27,372,753,246 - - - (5,705,326,740) 5,802,581,501 27,470,008,007

RETAINED EARNINGS REVALUATION SURPLUS (DEFICIT) APPROPRIATED UNAPPROPRIATED ON INVESTMENTS LEGAL RESERVE

5,971,499,705 (157,133,892) - (1,306,449,690) - (1,306,449,690) - - - - 5,971,499,705 (1,463,583,582)

57,604,032,350 1,207,650 5,976,648,087 - - (5,148,382) - - - - - (5,148,382) - - - - - - 57,604,032,350 1,207,650 5,971,499,705

(CONTINUED)

THE BANK’S FINANCIAL STATEMENTS APPRAISAL SURPLUS

BEGINNING BALANCE AS AT JANUARY 1, 2007 REVALUATION SURPLUS ON LAND REVALUATION SURPLUS ON INVESTMENTS UN-RECOGNIZED ITEMS IN INCOME STATEMENTS DIVIDENDS PAID 3.18 NET INCOME ENDING BALANCE AS AT DECEMBER 31, 2007

AND PREMIUM ON NOTE ISSUED SHARE PAID-UP SHARE CAPITAL CAPITAL

FOR THE YEARS - ENDED DECEMBER 31, 2008 AND 2007

STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY

KRUNG THAI BANK PUBLIC COMPANY LIMITED AND SUBSIDIARIES

130 93,701,077,983 (1,306,449,690) (1,306,449,690) (3,356,424,450) 12,053,042,130 101,091,245,973

91,231,225,778 (5,148,382) 2,067,745,826 2,062,597,444 (5,705,326,740) 6,112,581,501 93,701,077,983

TOTAL

(Baht)


KRUNG THAI BANK PUBLIC COMPANY LIMITED AND SUBSIDIARIES

CASH FLOW STATEMENT

FOR THE YEARS - ENDED DECEMBER 31, 2008 AND 2007

(Baht)

CONSOLIDATED FINANCIAL STATEMENTS THE BANK’S FINANCIAL STATEMENTS 2007 2008 2007 2008 CASH FLOWS FROM OPERATING ACTIVITIES INCOME BEFORE INCOME TAX ADJUSTMENT TO RECONCILE NET INCOME BEFORE INCOME TAX TO NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES DEPRECIATION AND AMORTIZATION BAD DEBT AND DOUBTFUL ACCOUNTS SHARE OF GAIN FROM INVESTMENTS ON EQUITY METHOD DIVIDEND RECEIVED FROM ASSOCIATED COMPANIES GAIN ON DISPOSAL OF ASSETS GAIN ON LIQUIDATION OF INVESTMENTS IN SUBSIDIARY COMPANY GAIN ON DISPOSAL OF INVESTMENTS LOSS ON SHARE WRITE-DOWN OF COMPANY INVESTED - GENERAL INVESTMENTS LOSS (GAIN) ON RECLASSIFICATION OF INVESTMENTS LOSS ON REVALUATION OF INVESTMENTS REVERSED ON IMPAIRMENT OF PROPERTIES FORECLOSED LOSS (REVERSED) ON IMPAIRMENT OF INVESTMENTS REVERSED ON IMPAIRMENT OF LAND REVERSED ON IMPAIRMENT OF OTHER ASSETS LOSS ON IMPAIRMENT OF OTHER ASSETS DISCOUNT AMORTIZATION ON INVESTMENTS LOSS ON REVALUATION OF FOREIGN CURRENCIES DECREASE (INCREASE) IN ACCRUED OTHER INCOME INCREASE (DECREASE) IN ACCRUED OTHER EXPENSES

NET INTEREST AND DIVIDEND INCOME CASH RECEIVED FROM INTEREST

AND DIVIDEND INCOME CASH RECEIVED FROM TAX REBATE CASH PAID ON INTEREST EXPENSE CASH PAID ON INCOME TAX OPERATING INCOME BEFORE CHANGES IN OPERATING ASSETS AND LIABILITIES (INCREASE) DECREASE IN OPERATING ASSETS INTERBANK AND MONEY MARKET ITEMS SECURITIES PURCHASED UNDER RESALE AGREEMENTS NET INVESTMENT IN SECURITIES FOR TRADING NET LOANS NET PROPERTIES FORECLOSED NET OTHER ASSETS

15,736,900,520 7,475,957,449 15,453,042,130 7,112,581,501 2,454,760,887 2,014,364,070 1,255,261,745 1,072,701,923 10,906,139,543 19,575,194,511 10,700,000,000 19,500,000,000 (726,350,413) (452,988,475) - - 243,889,995 196,804,996 - - (8,647,593) (4,376,628) (2,171,814) (1,813,631) (234,456) - (478,001) - (1,954,625,299) (797,431,025) (1,954,625,299) (797,431,025) 172,414,694 25,153,935 172,414,694 25,153,935 183,293,040 (18,063,882) 183,293,040 (18,063,882) 2,669,438,875 19,725,230 2,669,438,875 19,725,230 (159,554,685) (247,342,396) (175,097,099) (247,342,396) 7,181,283 (55,179,434) (235,228,030) (61,882,532) - (17,993,598) - (17,993,598) (2,732,116) - (2,732,116) - 198,953,747 34,400,823 198,953,747 34,400,823 (352,045,320) (458,624,525) (350,208,020) (456,949,527) 1,036,621,589 1,862,064,526 1,036,234,963 1,862,064,526 47,872,275 (113,166,234) 47,872,275 (113,166,234) 564,224,741 (102,648,542) 564,224,741 (102,648,542) 31,017,501,307 28,935,850,801 29,560,195,831 27,809,336,571 (45,815,828,582) (44,038,313,895) (45,877,899,048) (44,272,768,565) 66,241,871,695 66,083,578,893 66,307,065,503 66,314,703,006 2,553,575,236 - 2,396,604,203 - (20,187,631,590) (22,262,006,061) (20,189,744,617) (22,262,006,061) (4,064,709,772) (332,061,222) (3,918,284,435) (186,562,844) 29,744,778,294 28,387,048,516 28,277,937,437 27,402,702,107 (16,914,411,265) 10,163,404,309 (16,856,013,325) 10,143,577,396 600,000,000 20,600,000,000 600,000,000 20,600,000,000 (7,415,926,166) 7,950,057,512 (7,415,926,166) 7,950,057,512 (106,505,065,094) (62,058,634,480) (106,513,629,031) (61,947,437,591) 3,564,600,172 7,787,990,641 3,602,593,375 7,792,017,307 (373,047,565) (1,091,739,960) (332,330,561) (1,019,449,249)

NOTES TO THE FINANCIAL STATEMENTS ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.

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KRUNG THAI BANK PUBLIC COMPANY LIMITED AND SUBSIDIARIES CASH FLOW STATEMENT (CONTINUED) FOR THE YEARS - ENDED DECEMBER 31, 2008 AND 2007

(Baht)

Ann ual Report 2008 Krung Thai Bank Pcl.

CONSOLIDATED FINANCIAL STATEMENTS THE BANK’S FINANCIAL STATEMENTS 2007 2008 2008 2007 CASH FLOWS FROM OPERATING ACTIVITIES (CONTINUED) INCREASE (DECREASE) IN OPERATING LIABILITIES DEPOSITS 62,544,964,116 INTERBANK AND MONEY MARKET ITEMS (3,154,498,479) LIABILITY PAYABLE ON DEMAND (386,020,469) SHORT-TERM BORROWINGS 28,357,255,437 OTHER LIABILITIES 3,361,122,811 NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES (6,576,248,208) CASH FLOWS FROM INVESTMENT ACTIVITIES PURCHASE OF AVAILABLE FOR SALE SECURITIES (26,772,606,613) CASH RECEIVED FROM DISPOSAL OF AVAILABLE FOR SALE SECURITIES 22,814,975,445 PURCHASE OF HELD TO MATURITY DEBT SECURITIES (7,988,294,040) CASH RECEIVED FROM DISPOSAL OF HELD TO MATURITY DEBT SECURITIES 13,075,769,220 PURCHASE OF GENERAL INVESTMENTS (60,000,000) CASH RECEIVED FROM DISPOSAL OF GENERAL INVESTMENTS 4,213,133,955 PURCHASE OF INVESTMENTS IN SUBSIDIARY & ASSOCIATED COMPANIES (6,896,720) CASH RECEIVED FROM LIQUIDATION OF INVESTMENTS IN SUBSIDIARY COMPANY 1,021,901 PURCHASE OF INTANGIBLE ASSETS (730,432,093) PURCHASE OF LAND, PREMISES AND EQUIPMENT (2,797,341,984) CASH RECEIVED FROM DISPOSAL OF LAND, PREMISES AND EQUIPMENT 18,353,445 NET CASH PROVIDED BY (USED IN) INVESTMENT ACTIVITIES 1,767,682,516 CASH FLOWS FROM FINANCING ACTIVITIES CASH RECEIVED FROM LONG TERM BORROWINGS 21,228,400,000 CASH PAID ON BORROWINGS - DIVIDEND PAID-ORDINARY SHARE (3,353,924,700) DIVIDEND PAID-PREFERRED SHARE (2,499,750) NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES 17,871,975,550 NET INCREASE IN CASH AND CASH EQUIVALENTS 13,063,409,858 BEGINING BALANCE OF CASH AND CASH EQUIVALENTS 21,456,426,555 ENDING BALANCE OF CASH AND CASH EQUIVALENTS 34,519,836,413

34,234,367,578 (8,933,272,811) 931,685,619 (26,991,444,567) 598,034,793 11,577,497,150

61,434,139,435 33,816,940,999 (3,164,756,807) (8,929,496,940) (386,020,469) 931,685,619 28,357,255,437 (26,941,444,567) 3,195,954,910 184,806,648 (9,200,795,765) 9,983,959,241

(39,152,778,378) 31,057,772,354 (9,590,292,135) 16,862,295,072 (334,709,600) 161,422,430 (252,102,200) - (148,578,889) (2,213,347,434) 18,893,939 (3,591,424,841)

(26,772,606,613) 22,814,975,445 (7,214,264,375) 12,180,769,220 (60,000,000) 4,213,133,955 (6,898,820) 881,401,901 (462,839,685) (1,183,915,606) 2,275,487 4,392,030,909

(39,152,778,378) 31,057,772,354 (9,472,005,803) 16,787,295,062 (334,709,600) 161,422,430 (252,102,300) - (144,499,312) (661,080,076) 1,947,518 (2,008,738,105)

552,000,000 (10,797,298) (5,701,671,990) (3,654,750) (5,164,124,038) 2,821,948,271 18,634,478,284 21,456,426,555

21,228,400,000 - (3,353,924,700) (2,499,750) 17,871,975,550 13,063,210,694 21,455,775,912 34,518,986,606

552,000,000 - (5,701,671,990) (3,654,750) (5,153,326,740) 2,821,894,396 18,633,881,516 21,455,775,912

NOTES TO THE FINANCIAL STATEMENTS ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.

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KRUNG THAI BANK PUBLIC COMPANY LIMITED AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007 1. BASIS OF PRESENTATION OF FINANCIAL STATEMENTS The Bank is a public limited company registered in the Kingdom of Thailand with its head office

located at 35 Sukhumvit Road, Klongtoey Nua, Wattana, Bangkok, Thailand. It engages in commercial banking business and conducts its business through a nationwide branch network and in certain major centres of the world. Total employees as at December 31, 2008 and 2007 were 16,689 and 16,110, respectively.

1.1 Basis of Presentation of Consolidated Financial Statements and the Bank’s Financial Statements

The consolidated financial statements and the Bank’s financial statements are presented in accordance with the Notification issued by the Bank of Thailand No. SOR NOR SOR. 70/B.E. 2551 (2008) dated August 3, 2008 regarding Prescription on the Preparation and Announcement of the Financial Statements of Commercial Banks and Holding Company as the Parent Company of the Business in the Financial Group including related BOT’s Notification and also in accordance with the Stock Exchange of Thailand (SET)’s regulations, dated January 22, 2001, regarding the Preparation and Submission of Financial Statements and Report on Financial Status and Operation of Listed Companies, B.E. 2544 (2001). Moreover, they are prepared in conformity with generally accepted accounting principles, under Accounting Act B.E. 2543 (2000). Consolidated Financial Statements The consolidated financial statements comprise the accounts of the Bank and those of its subsidiaries where the Bank controls and holds more than 50 percent of paid-up shares capital (after eliminating material inter-company transactions and balances). The 6 consolidated subsidiaries are Krung Thai Legal Services Co., Ltd., Krung Thai General Business Services

Co., Ltd., Krung Thai Asset Management Pcl., Krung Thai Computer Services Co., Ltd., Krung Thai Property Development Co., Ltd. and KTB Leasing Co., Ltd. Except for that of Krung Thai Property Development Co., Ltd. due to business dissolution and the registration with the Ministry of Commerce and Revenue Department was held on September 11, 2008 and September 15, 2008, respectively. N.C. Associates Co., Ltd. was not included in the Bank’s consolidated financial statements due to business dissolution. As such, the registration upon the dissolution with the Ministry of Commerce and Revenue Department was held on December 28, 2005. Liquidation has been done in 2008. Percentages of shareholdings and investments in subsidiaries and associated companies are shown in Note 3.4.4 Investments in subsidiaries and associated companies, shown in the consolidated financial statements, are accounted fo by the equity method. The Bank’s Financial Statements Investments in subsidiaries and associated companies, shown in the Bank’s financial statements, are accounted for by the cost method. The financial statements for the years ended December 31, 2008 and 2007 also included the accounts of domestic and overseas branches, after eliminating material inter-branch transactions and balances. 1.2 Reclassification of Accounts Certain accounts in the financial statements for the year ended December 31, 2007 have been reclassified to conform to the presentation in the financial statements for the year ended December 31, 2008.

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2. SIGNIFICANT ACCOUNTING POLICIES

Ann ual Report 2008 Krung Thai Bank Pcl.

2.1 Cash and Cash Equivalents Cash and cash equivalents represent cash in hand and cash on collection. 2.2 Recognition of Interest Income Interest income is recognized on an accrual basis using the applicable effective interest rate, except for interest on loans classified as delinquent over 3 months. In accordance with the Bank of Thailand’s regulations, interest income on delinquent loans over 3 months from the due date only recognized as an income from January 1, 2000 had been reversed from the statements of income and recognized on a cash received basis, instead. The recognition of income generated from rental contract of a certain subsidiary company including: - those income from hire-purchasing and from financial lease recognized by using applicable effective rate as time to maturity date, interest on delinquent lease over 4 consecutive periods will be reversed from income statements whereas over 3 consecutive period for consumer product debtor will be reversed and recognized only on a cash received basis - those income from operational contract recognized as to the relevant period of payment. 2.3 Recognition of Interest Expense Interest expense on deposits and borrowings is recognized on an accrual basis. 2.4 Investments in Securities 2.4.1 Basis for Classification of Investments The Bank classifies its marketable debt and/or equity securities as trading securities and/or as available-for-sale securities. Non - marketable equity securities are classified as general investments. Securities held for less than 1 year are presented as current investments, while those exceeding 1 year and those held to maturity, are presented as long-term investments. Trading securities are classified as current investments. 2.4.2 Basis for Valuation of Investments Investments in marketable debt and equity securities classified as trading securities are stated at fair value. Unrealised gains or losses arising from their revaluation are credited or charged directly to the statements of income. Investments in marketable debt or equity securities classified as available-for-sale securities are stated at fair value. Unrealised gains or losses arising from their revaluation are shown as a separate component in shareholders’ equity and realised in the statements of income upon disposal. Investments in debt securities classified as held to maturity are carried at the amortized cost. Premiums or discounts arising on acquisition are amortized or accreted at month-end over the period to maturity by using straight line method which the effect is not material from those using the effective interest yield method. Investments in non-marketable equity securities are classified as general investments and stated at cost, net of valuation allowance for impairment. Losses on impairment are charged to the statements of income. Investments in marketable investment units classified as trading and available-for-sale are stated at fair value whereas investments in non-marketable investment units are stated at net value of financial asset. Investments in foreign asset-backed debt securities classified as trading current investments are stated at their fair value. Investments in subsidiaries and associates shown in the Bank’s financial statements are accounted for by using the cost method net of an allowance for impairment.

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Investments in subsidiaries and associates shown in Consolidated and its subsidiaries financial statements are accounted for by using the equity method based on unaudited/unreviewed financial statements of associated companies. The cost of investments on disposal is calculated by using the weighted average method. Dividend income from investments is recognized as income when declared (except for those of associated/subsidiaries company in consolidated financial statements recognized on equity method). 2.5 Loans Loans represent the outstanding principal amounts, except for Bank overdrafts which include accrued interest receivable in the drawn amounts. Unearned discounts are presented as a net deduction from the loans. 2.6 Allowance for Doubtful Accounts The Bank’s allowance for bad debts and doubtful accounts are set up in compliance with the Bank of Thailand’s Guidelines on Provisioning according to the BOT’s Notification number THOR POR TOR. SOR NOR SOR. 31/B.E. 2551 (2008) dated August 3, 2008 regarding Guidelines on Assets Classification and Provisioning of Financial Institutions and the BOT has also dispatched Policy Guidelines on valuation or appraisal for collateral and immovable properties foreclosed acquired through debt repayment enforced since August 4, 2008. The new Notification and Policy Guidelines as such have been collected all relative Guidelines regarding provisioning from which the essense remain similar to those on the previous accounting period as summarized to the followings: 1. The Bank has set aside provision for impaired-debtor upto 100 percent for the difference between the book value of loan and the present value of expected cash flows received from the debtor or the present value of expected cash flows from the sale of collateral as to the practice stipulated by the BOT. 2. For collaterals that are immovable properties, leasehold and machineries are required to calculate the present value of expected cash flows from sale [e.g. the present value of collaterals as immovable for debtors who are in the process of litigation is approximately 62.03 percent of the appraisal value whereas those for debtors whose collaterals are sold by public auction is approximately 66.38 percent of the appraisal value]. Other types of collateral are calculated by using the valuation rate specified by the BOT. 3. Collateral valuation has been conducted according to the regulation stipulated by the BOT in association with types of collateral, valuation methodology, valuation frequency and values of collateral that can be deductible before provisioning as followed: - As for pass and special mention categories, the underlying collaterals are required to revalue on a 3-year basis except for those every credit line of Housing loans and other loans apart from Housing loans with credit line or book value of loans not exceeding Baht 5.00 million. - As for sub-standard, doubtful and doubtful of loss, the valuation of collateral is conducted by using the method specified by the BOT, i.e, all types of immovable properties and machineries are required to revalue on a 3-year basis as a minimum, whereas near-cash collaterals such as marketable securities and non-traded securities, are required to revalue on every end-of-accounting period basis. Further, the Bank has also considered provisioning on a qualitative basis, based on pay back ability of debtors in due course. The Bank gradually set aside the allowance for doubtful accounts on a monthly basis of Baht 500.00 and 300.00 million, respectively for accounting period 2008 and 2007. Apart from this, the additional provisioning has been appropriately pursued by the Management in each accounting period. As such, the Bank’s total provisioning has been set up increasingly in accounting period of year 2008 and 2007 by Baht 4,700.00 and 15,900.00 million, respectively. (see Note 3.6)

135


Ann ual Report 2008 Krung Thai Bank Pcl.

Bad debts written off and bad debts recovered are either deducted from, or, added to the allowance for doubtful accounts whichever the case. Any debtor classified as doubtful of loss and considered as uncollectible would be written off by the value of its underlying provisioning as prescribed by the Bank’s write-off policy and also in line with that of the BOT. 2.7 Determination of losses on Troubled Debt Restructuring (TDR) Losses arising on debt restructuring were determined as to the followings: 2.7.1 Where the Bank accepts relaxation of the repayment conditions without reducing principal and accrued interest prior to trouble debt restructuring, the present value of expected cash flow received was discounted by using the interest rate under the conditions specified in the contract. In cases where the lower of such rate than financial cost rate, the financial cost rate will be used instead. Where the lower of present value computed than the carrying value (the principal amount plus interest receivable included in the outstanding balance of restructured debt), an allowance for losses arising on debt restructuring were totally recognized and taken to income statement for the relevant period. The component of financial costs encompasses the cost of deposits taking and the weighted average loans, including the Bank’s contributions to the Financial Institutions Development Fund and expenses incurred to maintain liquidity. 2.7.2 Where the Bank accepts assets transferred, financial instruments, or debt-equity conversion for repayment, total account receivables would be entirely written off. Losses arising were charged to Statements of Income instantly upon the receipt of transfer by taking into account the original allowance for doubtful of loss provided. Hence, the value of assets transferred shall be recorded not higher than book value of the debt plus accrued interest receivable entitled by the Bank. Preliminary apply the practice through No. 2.7.2 where the restructuring of loan involves in asset/financial instruments transferred or debt-equity conversion for partial repayment and through No. 2.7.1 for the residual debt balance where the Bank accepts relaxation of the repayment conditions.

2.8 Property, Premises and Equipment

Property, premises and equipment are stated at cost, net of accumulated depreciation and allowance for asset impairment. Land will be revalued on a 3-5 year basis. A deficit on revaluation of land is recognized as a loss on impairment in the statements of income. A surplus on revaluation of land is double-entered to land account and appraisal surplus on assets revaluation account and shown in the Shareholders’ Equity. Property related to subsidiaries is stated at cost value. Depreciation is calculated on the straight-line basis over their estimated useful lives of the assets at the rate of 5 percent per annum for premises and 20 percent per annum for equipment. Equipment with an acquisition cost not exceeding Baht 3,000.00 is charged directly to expense in the period of acquisition. 2.9 Properties Foreclosed Properties foreclosed are immovable and movable properties which are stated at lower of cost or market value. Losses on impairment are recognized as non-interest expense in the statements of income. Gains or losses on sale are recognized as other income or non-interest expense in the statement of income upon disposal. 2.10 Intangible Assets Intangible Assets are stated at cost less accumulated amortization and allowance for impairment. Amortization in each accounting period is recognized and charged to the income

136


statements and calculated on a straight-line basis over the estimated useful lives of the assets, as followed: Leasehold rights Over the lease periods or within 10 years where there is no

substantiated lease agreement Software licenses 10 years 2.11 Asset Impairment The Bank conducts the review on a case by case basis of an impairment upon end-ofperiod outstanding balances of assets when there is an indication that the carrying value of those assets is higher than the expected recoverable amounts. As such, losses on impairment will be realized in the Income Statements. The reversal of losses on impairment will be recorded only when there is an indication that such impairment no longer exists or shown at a declining balance, if any, and credited to Other Income. 2.12 Translation of Foreign Currencies Assets and liabilities denominated in foreign currencies are translated into Thai Baht at the rates of exchange prevailing on transaction dates, whereas translation of assets and liabilities balances into Thai Baht uses reference rates of exchange announced by the Bank of Thailand at month-end. Foreign exchange gains or losses arising on translation are dealt with through the profit and loss account in the relevant period. Risk management in relation to foreign currency assets and liabilities is performed under the Bank of Thailand’s supervision. Net individual foreign currency position is maintained on a daily basis as long or short not exceeding 15 percent of capital fund or USD 5.0 million whichever the higher, whereas all foreign currency position can be maintained on a daily basis as long or short not exceeding 20 percent of capital fund or USD 10.0 million whichever the higher. Reserve for FX unusual volatility is provided to moderate the impact of losses expected in subsequent periods.

2.13 Derivatives

The accounting treatments for financial derivative transactions in response to their purposes are as follows: 1. For trading purposes, transactions are carried at their fair value. Gains or losses arising from changes of fair value are recognized in income statements along with assets and liabilities in balance sheet. 2. For hedging purposes, financial derivative transactions are measured in the same manner consistent with the measurement of the hedging items.

2.14 Embedded Derivatives

Accounting for Embedded Derivative namely Credit Derivative Transaction and Structured Deposit/Note in line with the IAS 39 is treated by way of the followings: 1. Embedded Derivative must be separated from the host contract when able to determine reliably and classified as ‘Not closely related’ and measured at fair value through profit and loss whereas the measurement of host contract is accounted for under the applicable Accounting Standards. Conversely if the entity is unable to determine reliably, the fair value is measured by the entire contract and classified as held for trading measured at fair value through profit and loss. 2. Embedded Derivative must not be separated from the host contract when determined as ‘Closely related’ and classified under the applicable Accounting Standards to the host contract.

2.15 Provident Fund and Retirement

The Bank established a Provident Fund under the Provident Fund Act B.E. 2530 (1987) and entered to the registered fund approved by the Ministry of Finance on June 25, 1992.

137


Permanent employees of the Bank are entitled to apply for membership according to the Fund’s regulations. Employees can opt out to contribute to the Fund at the rate of either 3 percent, 6 percent, or 10 percent of basic salary while the Bank’s supplemental contribution is at 10 percent of the employees’ basic salary. Employees whose working tenure totals ten years or more are entitled to special remuneration as prescribed by the Bank which is charged to expenses in the relevant period. 2.16 Unclaimed Balances Unclaimed balances which remain dormant for more than 10 years are taken to income at the accounting period-end.

2.17 Income Tax

Ann ual Report 2008 Krung Thai Bank Pcl.

The Bank’s income tax expenses are recorded based on tax paid and tax accrued for the year. 2.18 Basic Earnings/(Loss) per Share Basic Earnings/(Loss) per share are calculated by dividing the net income/(loss),

in associated with ordinary shares, by the weighted average number of ordinary shares outstanding. Diluted Earnings/(Loss) per Share Diluted Earnings/(Loss) per share are calculated by dividing the net income after deducting noncumulative preferred dividend declared during the period by the weighted-average number of ordinary share outstanding. 2.19 Accounting Estimates In compliance with generally accepted accounting principles, the Bank is required to make estimates and assumptions in the financial statements that affect the reported amounts of income, expense, assets and liabilities and the disclosure of contingent assets and liabilities. Actual results could differ from those estimates. 2.20 Provisions, Contingent Liabilities The Bank of Thailand has issued the Notification No. SOR NOR SOR. 31/B.E. 2551 (2008) dated August 3, 2008 regarding Guidelines on Assets Classification and Provisioning of Financial Statements prescribing the provisioning regulations in associated with the off-balance sheet obligation underlying significant impacts that may arise from the misuse of the off-balance sheet items in conformity with Accounting Standard 53 regarding Provisions, Contingent Liabilities and Contingent Assets, the Bank is required to set aside the provisions for off-balance sheet items satisfying the following criteria: 1. Off-balance sheet obligation classified as substandard, doubtful, doubtful of loss and loss 2. Off-balance sheet obligation whichby the Bank should recognized provisions under liabilities shown in Balance Sheet according to item 14 in Thai Accounting Standard No. 53 when satisfying the following criteria: 2.1 A present obligation resulting from past events that may be a legal or a constructive obligation. 2.2 It is possibly certain that there will be a future outflow of resources embodying economic benefit to settle such obligation, and 2.3 A reliable estimate of obligation can be made. 3. Off-balance sheet obligation engage in high credit risk such as guarantee of loan, aval to bill or irrevocable obligation whereby the Credit Conversion Factor stipulated by the BOT in calculating Capital Fund to be maintained is equal to 1.0.

138


3. SUPPLEMENTARY INFORMATION

3.1 Disclosure of Cash Flow Information Significant non-cash items for the years ended December 31, 2008 and 2007 set out as the table below:

(Million Baht) Consolidated Financial Statements The Bank’s Financial Statements December 31, 2008 December 31, 2007 December 31, 2008 December 31, 2007

Increased (Decreased) Revaluation Surplus on Investments in Shareholders’ Equity (947.63) 2,233.64 (1,306.45) 2,067.75 Increased (Decreased) Appraisal Surplus on Properties - (3.49) - (5.15) Changes from Long-term Investments to Current Investments 7,055.95 2,550.06 7,055.95 2,550.06 Investments increased from Loan Payment 5.04 - 5.04 - Properties Foreclosed increased from Loan Payment 6,312.34 8,105.31 6,312.34 8,105.31 Transferred of Properties Foreclosed to Properties, Premises and Equipment 67.86 4.60 67.86 4.60 Transferred of Properties, Premises and Equipment to Properties Foreclosed 22.55 47.96 22.55 47.96

3.2 Interbank and Money Market Items

(Million Baht) Consolidated Financial Statements

December 31, 2008 Demand Time Total

December 31, 2007 Demand Time Total

3.2.1 Domestic Items Bank of Thailand and Financial Institutions Development Fund 5,826.83 7,557.00 13,383.83 3,973.98 11,500.00 15,473.98 Commercial banks 145.44 873.59 1,019.03 90.17 - 90.17 Other banks 0.05 16,265.60 16,265.65 0.05 122.00 122.05 Finance Co., Finance & Securities Co., Securities Co.,and Credit Fonciers Co. - 207.51 207.51 - 760.00 760.00 Other financial institutions 146.11 44,709.38 44,855.49 99.79 37,618.67 37,718.46 Total Domestic Items 6,118.43 69,613.08 75,731.51 4,163.99 50,000.67 54,164.66 Add Accrued interest receivable - 104.88 104.88 - 44.19 44.19 Less Allowance for doubtful accounts - (385.74) (385.74) - (351.07) (351.07) Total 6,118.43 69,332.22 75,450.65 4,163.99 49,693.79 53,857.78 3.2.2 Foreign Items US Dollar 1,104.18 13,082.94 14,187.12 838.07 19,558.21 20,396.28 Japanese Yen 142.09 - 142.09 349.94 - 349.94 Other currencies 846.72 2,254.77 3,101.49 593.11 709.81 1,302.92 Total Foreign Items 2,092.99 15,337.71 17,430.70 1,781.12 20,268.02 22,049.14 Add Accrued interest receivable - 145.36 145.36 - 106.24 106.24 Less Allowance for doubtful accounts - (4.19) (4.19) - (4.87) (4.87) Total 2,092.99 15,478.88 17,571.87 1,781.12 20,369.39 22,150.51 Total Domestic and Foreign Items 8,211.42 84,811.10 93,022.52 5,945.11 70,063.18 76,008.29

139


(Million Baht) The Bank’s Financial Statements December 31, 2008 Demand Time Total

December 31, 2007 Demand Time Total

Ann ual Report 2008 Krung Thai Bank Pcl.

3.2.1 Domestic Items Bank of Thailand and Financial Institutions Development Fund 5,826.83 7,557.00 13,383.83 3,973.98 11,500.00 15,473.98 Commercial banks 55.75 873.59 929.34 58.88 - 58.88 Other banks 0.05 16,265.60 16,265.65 0.05 122.00 122.05 Finance Co., Finance & Securities Co., Securities Co., and Credit Fonciers Co. - 207.51 207.51 - 760.00 760.00 Other financial institutions 146.11 44,709.38 44,855.49 99.79 37,618.67 37,718.46 Total Domestic Items 6,028.74 69,613.08 75,641.82 4,132.70 50,000.67 54,133.37 Add Accrued interest receivable - 104.88 104.88 - 44.19 44.19 Less Allowance for doubtful accounts - (385.74) (385.74) - (351.07) (351.07) Total 6,028.74 69,332.22 75,360.96 4,132.70 49,693.79 53,826.49 3.2.2 Foreign Items US Dollar 1,104.18 13,082.94 14,187.12 838.07 19,558.21 20,396.28 Japanese Yen 142.09 - 142.09 349.94 - 349.94 Other currencies 846.72 2,254.77 3,101.49 593.11 709.81 1,302.92 Total Foreign Items 2,092.99 15,337.71 17,430.70 1,781.12 20,268.02 22,049.14 Add Accrued interest receivable - 145.36 145.36 - 106.24 106.24 Less Allowance for doubtful accounts - (4.19) (4.19) - (4.87) (4.87) Total 2,092.99 15,478.88 17,571.87 1,781.12 20,369.39 22,150.51 Total Domestic and Foreign Items 8,121.73 84,811.10 92,932.83 5,913.82 70,063.18 75,977.00

3.3 Securities Purchased under Resale Agreements (Million Baht) Consolidated and the Bank’s Financial Statements December 31, 2008

Government & BOT Bonds Total

140

- -

December 31, 2007

600.00 600.00


3.4 Investments (Million Baht) Consolidated Financial Statements December 31, 2007 December 31, 2008 Cost / Unrealized Unrealized Amortized Cost Gains Losses

Fair Value

Cost / Unrealized Unrealized Losses Amortized Cost Gains

Fair Value

3.4.1 Current Investments Trading Securities Government & state enterprise securities 13,527.03 87.02 (0.05) 13,614.00 4,636.12 4.02 (0.09) 4,640.05 Private enterprise debt securities 7.12 0.01 - 7.13 9.50 - (0.04) 9.46 Foreign debt securities 8,984.60 - (5,757.92) 3,226.68 - - - Domestic marketable equity securities - - - - 63.80 0.87 (3.58) 61.09 Total 22,518.75 87.03 (5,757.97) 16,847.81 4,709.42 4.89 (3.71) 4,710.60 Add (Less) Allowance for revaluation (5,763.85) - - - 1.18 - - - Total 16,754.90 16,847.81 4,710.60 4,710.60 Available-for-Sale Securities Government & state enterprise securities 20,598.54 75.69 - 20,674.23 2,814.51 19.94 (0.22) 2,834.23 Private enterprise debt securities 147.60 12.04 - 159.64 2,625.00 - (98.63) 2,526.37 Foreign debt securities 73.49 - (0.72) 72.77 102.27 - - 102.27 Total 20,819.63 87.73 (0.72) 20,906.64 5,541.78 19.94 (98.85) 5,462.87 Add (Less) Allowance for revaluation 87.73 - - - (78.91) - - - Less Allowance for impairment (0.72) - - - - - - - Total 20,906.64 20,906.64 5,462.87 5,462.87 Held-to-Maturity Debt Securities Government & state enterprise securities 7,408.23 120.30 (71.55) 7,456.98 10,555.61 33.60 - 10,589.21 Private enterprise debt securities 35.71 - (35.71) - 521.78 0.70 - 522.48 Foreign debt securities 335.13 - - 335.13 - - - - Total 7,779.07 120.30 (107.26) 7,792.11 11,077.39 34.30 - 11,111.69 Less Allowance for impairment (35.71) - - - - - - - Total 7,743.36 7,792.11 11,077.39 11,111.69 Total Current Investments - net 45,404.90 45,546.56 21,250.86 21,285.16

141


(Million Baht) Consolidated Financial Statements December 31, 2007 December 31, 2008 Cost / Unrealized Unrealized Amortized Cost Gains Losses

Cost / Unrealized Unrealized Fair Value Amortized Cost Gains Losses

Fair Value

Ann ual Report 2008 Krung Thai Bank Pcl.

3.4.2 Long-Term Investments Available-for-Sale Securities Government & state enterprise securities 2,780.36 285.07 - 3,065.43 17,738.28 1.37 (122.76) 17,616.89 Private enterprise debt securities 4,052.00 141.56 (6.45) 4,187.11 1.96 0.31 - 2.27 Foreign debt securities 114.23 - (1.66) 112.57 165.41 0.65 (2.19) 163.87 Domestic marketable equity securities 1,570.03 535.33 (439.41) 1,665.95 1,593.71 1,131.66 (11.61) 2,713.76 Others - VAYUPAKSA MUTUAL FUND 1 29,412.96 - (2,068.29) 27,344.67 29,411.16 - (1,039.24) 28,371.92 Total 37,929.58 961.96 (2,515.81) 36,375.73 48,910.52 1,133.99 (1,175.80) 48,868.71 Less Allowance for revaluation (1,551.32) - - - (39.04) - - - Less Allowance for impairment (2.53) - - - (2.77) - - - Total 36,375.73 36,375.73 48,868.71 48,868.71 Held-to-Maturity Debt Securities Government & state enterprise securities 18,030.22 212.90 - 18,243.12 19,510.53 13.75 (24.23) 19,500.05 Private enterprise debt securities 301.36 - (1.36) 300.00 480.50 8.95 (2.52) 486.93 Foreign debt securities 3,494.37 - - 3,494.37 10,512.54 - - 10,512.54 Total 21,825.95 212.90 (1.36) 22,037.49 30,503.57 22.70 (26.75) 30,499.52 Less Allowance for impairment (1.36) - - - (2.52) - - - Total 21,824.59 22,037.49 30,501.05 30,499.52 General Investments Domestic non- marketable equity securities 3,035.86 - (1,384.03) 1,651.83 5,513.03 - (1,412.26) 4,100.77 Foreign non- marketable equity securities 96.52 - (30.93) 65.59 92.97 - (30.93) 62.04 Total 3,132.38 - (1,414.96) 1,717.42 5,606.00 - (1,443.19) 4,162.81 Less Allowance for impairment (1,414.96) - - - (1,443.19) - - - Total 1,717.42 1,717.42 4,162.81 4,162.81 Total Long-Term Investments - net 59,917.74 60,130.64 83,532.57 83,531.04

142


(Million Baht)

Within 1 year

Consolidated Financial Statements December 31, 2007 December 31, 2008 Maturity Maturity Total Over 1 to 5 Over 1 to 5 years

Over 5 years

Within 1 year

years

Over 5 years

Total

3.4.3 Maturity Schedule of Debt Securities Available-for- Sale Securities Government & state enterprise securities 20,598.54 300.00 2,480.36 23,378.90 2,814.51 17,737.30 0.98 20,552.79 Private enterprise debt securities 147.60 1,247.00 2,805.00 4,199.60 2,625.00 1.96 - 2,626.96 Foreign debt securities 73.49 5.06 109.17 187.72 102.27 78.55 86.86 267.68 Total 20,819.63 1,552.06 5,394.53 27,766.22 5,541.78 17,817.81 87.84 23,447.43 Add (Less) Allowance for revaluation 87.73 37.65 382.33 507.71 (78.91) (120.84) (0.08) (199.83) Less Allowance for impairment (0.72) (1.47) - (2.19) - (1.71) - (1.71) Total 20,906.64 1,588.24 5,776.86 28,271.74 5,462.87 17,695.26 87.76 23,245.89 Held-to-Maturity Debt Securities Government & state enterprise securities 7,408.23 16,464.65 1,565.57 25,438.45 10,555.61 14,407.54 5,102.99 30,066.14 Private enterprise debt securities 35.71 300.00 1.36 337.07 521.78 480.50 - 1,002.28 Foreign debt securities 335.13 3,494.37 - 3,829.50 - 5,116.80 5,395.74 10,512.54 Total 7,779.07 20,259.02 1,566.93 29,605.02 11,077.39 20,004.84 10,498.73 41,580.96 Less Allowance for impairment (35.71) - (1.36) (37.07) - (2.52) - (2.52) Total 7,743.36 20,259.02 1,565.57 29,567.95 11,077.39 20,002.32 10,498.73 41,578.44 Total Debt Securities 28,650.00 21,847.26 7,342.43 57,839.69 16,540.26 37,697.58 10,586.49 64,824.33

143


(Million Baht) The Bank’s Financial Statements December 31, 2007 December 31, 2008 Cost / Unrealized Unrealized Fair Value Cost / Unrealized Unrealized Fair Value Amortize Cost Gains Amortized Cost Gains Losses Losses

Ann ual Report 2008 Krung Thai Bank Pcl.

3.4.1 Current Investments Trading Securities Government & state enterprise securities 13,527.03 87.02 (0.05) 13,614.00 4,636.12 4.02 (0.09) 4,640.05 Private enterprise debt securities 7.12 0.01 - 7.13 9.50 - (0.04) 9.46 Foreign debt securities 8,984.60 - (5,757.92) 3,226.68 - - - - Domestic marketable equity securities - - - - 63.80 0.87 (3.58) 61.09 Total 22,518.75 87.03 (5,757.97) 16,847.81 4,709.42 4.89 (3.71) 4,710.60 Add (Less) Allowance for revaluation (5,763.85) - - - 1.18 - - - Total 16,754.90 16,847.81 4,710.60 4,710.60 Available-for-sale Securities Government & state enterprise securities 20,598.54 75.69 - 20,674.23 2,814.51 19.94 (0.22) 2,834.23 Private enterprise debt securities 147.60 12.04 - 159.64 2,625.00 - (98.63) 2,526.37 Foreign debt securities 73.49 - (0.72) 72.77 102.27 - - 102.27 Total 20,819.63 87.73 (0.72) 20,906.64 5,541.78 19.94 (98.85) 5,462.87 Add (Less) Allowance for revaluation 87.73 - - - (78.91) - - - Less Allowance for impairment (0.72) - - - - - - - Total 20,906.64 20,906.64 5,462.87 5,462.87 Held-to-Maturity Debt Securities Government & state enterprise securities 7,408.23 120.30 (71.55) 7,456.98 10,436.47 33.60 - 10,470.07 Private enterprise debt securities 35.71 - (35.71) - 521.78 0.70 - 522.48 Foreign debt securities 335.13 - - 335.13 - - - - Total 7,779.07 120.30 (107.26) 7,792.11 10,958.25 34.30 - 10,992.55 Less Allowance for impairment (35.71) - - - - - - - Total 7,743.36 7,792.11 10,958.25 10,992.55 Total Current Investments - net 45,404.90 45,546.56 21,131.72 21,166.02

144


(Million Baht) The Bank’s Financial Statements December 31, 2007 December 31, 2008 Cost / Unrealized Unrealized Fair Value Cost / Unrealized Unrealized Fair Value Amortize Cost Gains Amortized Cost Gains Losses Losses

3.4.2 Long-Term Investments Available-for-sale Securities Government & state enterprise securities 2,780.36 285.07 - 3,065.43 17,738.28 1.37 (122.76) 17,616.89 Private enterprise 4,052.00 141.56 (6.45) 4,187.11 1.96 0.31 - 2.27 debt securities Foreign debt securities 114.23 - (1.66) 112.57 165.41 0.65 (2.19) 163.87 Domestic marketable equity securities 1,570.03 535.33 (439.41) 1,665.95 1,593.71 1,131.66 (11.61) 2,713.76 Others - VAYUPAKSA - (2,068.29) 27,344.67 29,411.16 - (1,039.24) 28,371.92 MUTUAL FUND 1 29,412.96 37,929.58 961.96 (2,515.81) 36,375.73 48,910.52 1,133.99 (1,175.80) 48,868.71 Total Less Allowance for (1,551.32) - - - (39.04) - - - revaluation Less Allowance (2.53) - - - (2.77) - - - for impairment 36,375.73 36,375.73 48,868.71 48,868.71 Total Held-to-Maturity Debt Securities Government & state enterprise securities 18,030.22 212.90 - 18,243.12 19,510.53 13.75 (24.23) 19,500.05 Private enterprise 301.36 - (1.36) 300.00 480.50 8.95 (2.52) 486.93 debt securities Foreign debt securities 3,494.37 - - 3,494.37 10,512.54 - - 10,512.54 21,825.95 212.90 (1.36) 22,037.49 30,503.57 22.70 (26.75) 30,499.52 Total Less Allowance (1.36) - - - (2.52) - - - for impairment 21,824.59 22,037.49 30,501.05 30,499.52 Total General Investments Domestic non- marketable equity 3,035.86 - (1,384.03) 1,651.83 5,513.03 - (1,412.26) 4,100.77 securities Foreign non- marketable equity 96.52 - (30.93) 65.59 92.97 - (30.93) 62.04 securities 3,132.38 - (1,414.96) 1,717.42 5,606.00 - (1,443.19) 4,162.81 Total Less Allowance - - - (1,443.19) - - - for impairment (1,414.96) 1,717.42 1,717.42 4,162.81 4,162.81 Total Total Long-Term Investments - net 59,917.74 60,130.64 83,532.57 83,531.04

Shown in the Consolidated and the Bank’s financial statement as at December 31, 2008 and 2007, the Bank’s long-term investments in Government and State Enterprise debt securities heldto-maturity included promissory notes issued by the Thai Asset Management Corporation (TAMC) in exchange for the transfer of the Bank’s impaired assets amounting to Baht 12,030.22 million and Baht 13,109.89 million, respectively. (see Note 3.29)

145


Ann ual Report 2008 Krung Thai Bank Pcl.

Conversion type of Investments In 2008, according to the BOT’s Notification No. SOR NOR SOR. 9/B.E. 2551 (2008), dispatched on August 3, 2008 Re : the Permission granted to Commercial Banks to invest in Collateralized Debt Obligations - CDOs, stipulated the Bank to perform satisfying the international accounting standards, hence, from accounting period commencing in or after January 1, 2008. On January 31, 2008, the Bank has reclassified type of investments in asset-backed foreign debt securities from long-term investments, held-to-maturity foreign debt securities to current investments in trading foreign debt securities. The related cost price was Bath 6,922.68 million and its fair value stated at Baht 3,778.14 million. The different of Baht 3,144.54 was an allowance for revaluation transferred from an allowance for doubtful accounts amounting to Baht 3,000.00 million (see Note 3.6) and booked as losses arising from such conversion of Baht 144.54 million. As at December 31, 2008, current investments in trading foreign debt securities of Baht 8,984.60 million entirely represented the asset-backed debt securities. When booked at their fair value of Baht 3,226.68 million, the different amounting to Baht 5,757.92 million would represent an allowance for revaluation transferred the Baht 3,000.00 million from allowance for doubtful accounts as to Note 3.6, the residual amount of Baht 2,757.92 million were charged to expense in this period. Besides, the Bank has provided for in full the allowance for revaluation against CDO with its fair value at Baht 92.91 million, as to the following:

(Million Baht)

Cost Value Fair Value Collateralized Debt Obligations (CDO) Credit Linked Notes (CLN) First to Default Credit Linked Notes (FTDN)

5,584.57 2,446.06 953.97 8,984.60

92.91 2,257.47 876.30 3,226.68

Allowance Allowance for (Increase) Book Value Revaluation (5,491.66) (92.91) - (188.59) - 2,257.47 (77.67) - 876.30 (5,757.92) (92.91) 3,133.77

For the years ended December 31, 2008 and 2007, the Bank has shifted short term availablefor-sale investments to long term available-for-sale investments. Its cost value stated at Baht 2,995.00 and Baht 1,202.09 million whereas its fair value stated at the Baht 3,085.53 and 1,053.83 million and the Baht 90.53 and (147.49) million as the allowance for revaluation, respectively and the Baht 0.77 million was stated as the allowance for impairment for 2007.

146


(Million Baht)

Within 1 year

The Bank’s Financial Statements December 31, 2007 December 31, 2008 Maturity Maturity Total Over 1 to 5 Over 1 to 5 years

Over 5 years

Within 1 year

years

Over 5 years

Total

3.4.2 Maturity Schedule of Debt Securities

Available-for- Sale Securities Government & state enterprise securities 20,598.54 300.00 2,480.36 23,378.90 2,814.51 17,737.30 0.98 20,552.79 Private enterprise 147.60 1,247.00 2,805.00 4,199.60 2,625.00 1.96 - 2,626.96 debt securities Foreign debt securities 73.49 5.06 109.17 187.72 102.27 78.55 86.86 267.68 Total 20,819.63 1,552.06 5,394.53 27,766.22 5,541.78 17,817.81 87.84 23,447.43 Add (Less) Allowance 87.73 37.65 382.33 507.71 (78.91) (120.84) (0.08) (199.83) for revaluation Add (Less) Allowance (0.72) (1.47) - (2.19) - (1.71) - (1.71) for impairment Total 20,906.64 1,588.24 5,776.86 28,271.74 5,462.87 17,695.26 87.76 23,245.89 Held-to-Maturity Debt Securities Government & state enterprise securities 7,408.23 16,464.65 1,565.57 25,438.45 10,436.47 14,407.54 5,102.99 29,947.00 Private enterprise 35.71 300.00 1.36 337.07 521.78 480.50 - 1,002.28 debt securities Foreign debt securities 335.13 3,494.37 - 3,829.50 - 5,116.80 5,395.74 10,512.54 Total 7,779.07 20,259.02 1,566.93 29,605.02 10,958.25 20,004.84 10,498.73 41,461.82 Less Allowance (35.71) - (1.36) (37.07) - (2.52) - (2.52) for impairment Total 7,743.36 20,259.02 1,565.57 29,567.95 10,958.25 20,002.32 10,498.73 41,459.30 Total Debt Securities 28,650.00 21,847.26 7,342.43 57,839.69 16,421.12 37,697.58 10,586.49 64,705.19

147


3.4.4 Investments in Subsidiaries and Associated Companies Name of Company

(Million Baht)

Consolidated Financial Statements Type of December 31, 2008 Shares Percentage of Type of Business (Preferred/ Investments Investments Ordinary Shareholding (Preferred/ (Cost Method) (Equity Method) Dividend Shares) Ordinary Shares)

Associated Companies Krungthai-Axa Life Insurance Co., Ltd. Life Insurance Ordinary 50.00 593.57 1,382.46 - Krungthai Card Pcl. Credit Card Business Ordinary 47.92 1,966.90 2,955.75 147.00 Krungthai Panich Insurance Co., Ltd. Non-Life & Ordinary 45.00 971.30 1,361.02 84.15 Life Insurance Krungthai Charoensri Co., Ltd. Hire Purchase Ordinary 35.00 35.00 - - Krung Thai IBJ Leasing Co., Ltd. Hire Purchase Ordinary 49.00 87.38 300.43 12.74 KTB Securities Co., Ltd. Securities Trades Ordinary 50.00 432.00 188.58 - Total 4,086.15 6,188.24 243.89 Total Investments in Associated Companies - net 4,086.15 6,188.24 243.89 Ann ual Report 2008 Krung Thai Bank Pcl.

(Million Baht)

Name of Company

Consolidated Financial Statements Type of December 31, 2007 Shares Type of Business (Preferred/ Percentage of Investments Investments Ordinary Shareholding (Preferred/ (Cost Method) (Equity Method) Dividend Shares) Ordinary Shares)

Subsidiaries NC Associates Co., Ltd. Rubber Wood Agent Ordinary 54.39 0.54 0.79 - Total 0.54 0.79 - Associated Companies Krungthai-Axa Life Insurance Co., Ltd. Life Insurance Ordinary 50.00 593.57 479.28 - Krungthai Card Pcl. Credit Card Business Ordinary 47.60 1,960.00 2,830.49 122.50 Krungthai Panich Insurance Co., Ltd. Non-Life & Ordinary 45.00 971.30 1,513.57 64.75 Life Insurance Krungthai Charoensri Co., Ltd. Hire Purchase Ordinary 35.00 35.00 - - Krung Thai IBJ Leasing Co., Ltd. Hire Purchase Ordinary 49.00 87.38 261.90 9.55 KTB Securities Co., Ltd. Securities Trades Ordinary 50.00 432.00 254.82 - Total 4,079.25 5,340.06 196.80 Total Investments in Associated Companies - net 4,079.79 5,340.85 196.80

NC Associates Co., Ltd. was not included in the Bank’s consolidated financial statements due to business dissolution. In Q1-2008, the Baht 1.02 million of cash received from liquidation was rendered to the Bank with the Baht 0.48 million as gain on related investments. (see Note 1.1) Investments in Associated Companies accounted for under the equity method, were reported through their unaudited/unreviewed financial statements. The Bank’s investments in Krungthai Charoensri Co., Ltd., accounted for under the equity method, were reported at nil value when losses exceeded the carrying amounts of investments as at December 31, 2008 and 2007. The company has discontinued its operation and entered into disposing its entire business.

148


3.4.4 Investments in Subsidiaries and Associated Companies (continued) (Million Baht)

Name of Company

The Bank’s Financial Statements Type of Shares December 31, 2008 Type of Business (Preferred/ Percentage of Ordinary Shareholding Investments (Preferred/ (Cost Method) Dividend Shares) Ordinary Shares)

Subsidiaries Krung Thai Legal Services Co., Ltd. Legal Services Ordinary 100.00 30.00 12.00 Krung Thai General Business Services Co., Ltd. General Services Ordinary 100.00 140.00 19.95 Krung Thai Asset Management Pcl. Asset Management Ordinary 100.00 210.90 60.00 Krung Thai Computer Services Co., Ltd. IT Services Ordinary 100.00 1,300.00 32.50 Krung Thai Property Development Real Estate Co., Ltd. Development Ordinary 100.00 266.79 - KTB Leasing Co., Ltd. Hire Purchase Ordinary 100.00 100.00 - Total 2,047.69 124.45 Less Allowance for Impairment * (101.60) - Total 1,946.09 124.45 Associated Companies Krungthai - Axa Life Insurance Co., Ltd. Life Insurance Ordinary 50.00 593.57 - Krungthai Card Pcl. Credit Card Business Ordinary 47.92 1,966.90 147.00 Krungthai Panich Insurance Co., Ltd. Non-Life & Ordinary 45.00 971.30 84.15 Life Insurance Krungthai Charoensri Co., Ltd. Hire Purchase Ordinary 35.00 35.00 - Krung Thai IBJ Leasing Co., Ltd. Hire Purchase Ordinary 49.00 87.38 12.74 KTB Securities Co., Ltd. Securities Trades Ordinary 50.00 432.00 - Total 4,086.15 243.89 Less Allowance for Impairment * (326.47) - Total 3,759.68 243.89 Total Investments in Subsidiaries and Associated Companies - net 5,705.77 368.34

149


3.4.4 Investments in Subsidiaries and Associated Companies (continued) (Million Baht)

Name of Company

The Bank’s Financial Statements Type of Shares December 31, 2007 (Preferred/ Percentage of Type of Business Ordinary Shareholding Investments (Preferred/ (Cost Method) Dividend Shares) Ordinary Shares)

Ann ual Report 2008 Krung Thai Bank Pcl.

Subsidiaries Krung Thai Legal Services Co., Ltd. Legal Services Ordinary 100.00 30.00 21.00 Krung Thai General Business General Services Ordinary 100.00 140.00 - Services Co., Ltd. Krung Thai Asset Management Pcl. Asset Management Ordinary 100.00 210.90 30.00 Krung Thai Computer Services Co., Ltd. IT Services Ordinary 100.00 1,300.00 - Krung Thai Property Development Real Estate Co., Ltd. Development Ordinary 100.00 1,147.18 - KTB Leasing Co., Ltd. Hire Purchase Ordinary 100.00 100.00 - NC Associates Co., Ltd. Rubber Wood Agent Ordinary 54.39 0.54 - Total 2,928.62 51.00 Less Allowance for Impairment * (101.33) - Total 2,827.29 51.00 Associated Companies Krungthai - Axa Life Insurance Co., Ltd. Life Insurance Ordinary 50.00 593.57 - Krungthai Card Pcl. Credit Card Business Ordinary 47.60 1,960.00 122.50 Krungthai Panich Insurance Co., Ltd. Non-Life & Ordinary 45.00 971.30 64.75 Life Insurance Krungthai Charoensri Co., Ltd. Hire Purchase Ordinary 35.00 35.00 - Krung Thai IBJ Leasing Co., Ltd. Hire Purchase Ordinary 49.00 87.38 9.55 KTB Securities Co., Ltd. Securities Trades Ordinary 50.00 432.00 - Total 4,079.25 196.80 Less Allowance for Impairment * (569.15) - Total 3,510.10 196.80 Total Investments in Subsidiaries and Associated Companies - net 6,337.39 247.80

* Allowance for Impairment of investments in Subsidiaries and Associated Companies arising when cost value is greater than carrying value. The Bank has increased the investments amounting to Baht 252.10 million in Krungthai Panich Insurance Co., Ltd. on March 22, 2007.

150


3.4.5 Financial Position and Operations of Associated Companies

(Million Baht)

Consolidated Financial Statements December 31, 2007 December 31, 2008 “Audited” “Unaudited”

Name of Company

Shareholders’ Total Assets Total Liabilities Shareholders’ Equity Total Assets Total Liabilities Equity

Krung Thai IBJ Leasing Co., Ltd. 4,009.41 KTB Securities Co., Ltd. 752.18 Krungthai Panich Insurance Co., Ltd. 4,267.62 Krungthai - Axa Life Insurance Co., Ltd. 17,979.70 Krungthai Card Pcl. 51,898.94 78,907.85

3,396.29 613.12 375.03 377.15 1,243.13 3,024.49 15,214.79 2,764.91 45,733.73 6,165.21 65,962.97 12,944.88

3,610.48 3,076.02 534.46 1,417.78 908.13 509.65 4,492.17 1,137.43 3,354.74 10,268.05 9,309.48 958.57 45,918.86 39,967.33 5,951.53 65,707.34 54,398.39 11,308.95

(Million Baht)

Consolidated Financial Statements December 31, 2008 December 31, 2007 “Audited” “Unaudited”

Name of Company

Profit Total Income Net(Loss)

Krung Thai IBJ Leasing Co., Ltd. KTB Securities Co., Ltd. Krungthai Panich Insurance Co., Ltd. Krungthai - Axa Life Insurance Co., Ltd. Krungthai Card Pcl.

Profit Total Income Net(Loss)

363.10 104.66 304.06 88.12 235.25 (131.17) 177.63 (75.44) 1,459.67 358.50 1,451.08 341.59 9,427.56 656.95 5,913.79 345.81 12,029.09 520.40 10,701.28 520.97 23,514.67 1,509.34 18,547.84 1,221.05

3.4.6 Revaluation Surplus (Deficit) on Investments

(Million Baht)

Consolidated Financial Statements The Bank’s Financial Statements December 31, 2008 December 31, 2007 December 31, 2008 December 31, 2007

Balance brought forward Changes for the period Balance carried forward

383.84 (947.63) (563.79)

(1,849.80) 2,233.64 383.84

(157.13) (1,306.45) (1,463.58)

(2,224.88) 2,067.75 (157.13)

In addition, the Bank has acquired the investments in other securities classified by industrial sector whichby the Bank holds equal to or more than 10 percent of the shareholdings stated at their fair value as follows :

(Million Baht)

Consolidated Financial Statements The Bank’s Financial Statements December 31, 2008 December 31, 2007 December 31, 2008 December 31, 2007

Manufacturing Banking and Financial Public Utilities and Services Total

1.00 109.88 685.01 795.89

51.00 240.58 978.60 1,270.18

1.00 109.88 685.01 795.89

51.00 240.58 978.60 1,270.18

151


As at December 31, 2008 and 2007, the Bank’s investments in foreign debt securities which were affected by adverse foreign exchange rate movements, resulting in an increase of Baht 353.06 million and a decline of Baht 230.55 million in value, respectively. 3.4.7 Gain (Loss) on net Investments shown in Statements of Income for the years ended December 31, 2008 and 2007 comprise the followings:

(Million Baht)

Consolidated Financial Statements December 31, 2007 December 31, 2008 Gain/Reversed Unrealized Gain

Loss

Gain/Reversed Unrealized Gain

Ann ual Report 2008 Krung Thai Bank Pcl.

Realized Gain (Loss) on disposal of Trading Securities 200.49 (82.56) Realized Gain (Loss) on disposal of Available-for- Sale Current Investments 47.39 - Realized Gain (Loss) on disposal of Available-for- Sale Long-term Investments 59.86 - Realized Gain (Loss) on disposal of Long-term General Investments 1,848.99 (1.14) Gain (Loss) on Revaluation of Marketable Trading Securities - (2,719.53) Gain (Loss) on Reclassification of Investments - (183.29) Gain (Loss) on Revaluation of Investments 50.09 - Impairment Loss on Investments - (7.18) Loss on Share write-down of Company invested- General Investments - (172.41) Total 2,206.82 (3,166.11) Non-Interest Income - Gain (Loss) on Investments, net (959.29)

Loss

381.23

(26.93)

167.35

(0.24)

575.51 - 54.90 (0.08) - (19.73) 18.06 - - - 55.18 - - (25.15) 1,252.23 (72.13) 1,180.10

(Million Baht)

The Bank’s Financial Statements December 31, 2007 December 31, 2008 Gain/Reversed Unrealized Gain

Loss

Gain/Reversed Unrealized Gain

Realized Gain (Loss) on disposal of Trading Securities 200.49 (82.56) 381.23 Realized Gain (Loss) on disposal of Available-for- Sale Current Investments 47.39 - 167.35 Realized Gain (Loss) on disposal of Available-for- Sale Long-term Investments 59.86 - 575.51 Realized Gain (Loss) on disposal of Long-term General Investments 1,848.99 (1.14) 54.90 Gain (Loss) on Revaluation of Marketable Trading Securities - (2,719.53) - Gain (Loss) on Reclassification of Investments - (183.29) 18.06 Gain (Loss) on Revaluation of Investments 50.09 - - Impairment Gain (Loss) on Investments 235.23 - 61.88 Loss on Share write-down of Company invested- General Investments - (172.41) - Total 2,442.05 (3,158.93) 1,258.93 Non-Interest Income - Gain (Loss) on Investments, net (716.88) 1,186.80

152

Loss

(26.93) (0.24) - (0.08) (19.73) - - - (25.15) (72.13)


3.4.8 Investments in listed companies whose financial position and operations fall under SET’s delisted criteria as of December 31, 2008 were as follows:

(Million Baht)

Cost Value

Equity Securities Prasit Pattana Pcl. Manager Media Group Pcl. Debt Securities Manager Media Group Pcl.

Fair Value

Allowance for Impairment

0.77 - 0.77 0.29 - 0.29 35.71 - 35.71

3.5 Loans and Accrued Interest Receivable (Million Baht) Consolidated Financial Statements The Bank’s Financial Statements December 31, 2008 December 31, 2007 December 31, 2008 December 31, 2007

Loans 1,044,609.26 955,948.88 1,046,146.23 958,125.56 Accrued interest receivable 4,835.46 5,156.23 4,838.79 5,160.50 Less Unearned discounts (2,111.32) (1,377.66) (60.40) (41.58) Total Loans and Accrued Interest Receivable 1,047,333.40 959,727.45 1,050,924.62 963,244.48

3.5.1 Classified by Type of Loans

(Million Baht)

Consolidated Financial Statements The Bank’s Financial Statements December 31, 2008 December 31, 2007 December 31, 2008 December 31, 2007

Overdrafts Fixed loans Bills receivable Hire Purchase Receivable Financial Lease Receivable Others Total Add Accrued interest receivable Less Allowance for doubtful accounts Allowance for TDR revaluation Total Less Unearned discounts Total

123,832.61 608,540.31 295,890.20 12,338.47 1,422.02 2,585.65 1,044,609.26 4,835.46 (35,075.26) (509.62) 1,013,859.84 (2,111.32) 1,011,748.52

110,362.66 123,832.61 110,362.66 560,303.98 617,553.46 565,464.97 273,638.19 302,251.20 278,869.19 7,047.57 - - 1,167.74 - - 3,428.74 2,508.96 3,428.74 955,948.88 1,046,146.23 958,125.56 5,156.23 4,838.79 5,160.50 (35,574.01) (34,889.47) (35,527.79) (1,393.64) (509.62) (1,393.64) 924,137.46 1,015,585.93 926,364.63 (1,377.66) (60.40) (41.58) 922,759.80 1,015,525.53 926,323.05

As at December 31, 2008 and 2007, the Bank’s other loans of Baht 2,508.96 million and Baht 3,428.74 million had included Baht 2,163.97 million and Baht 2,829.21 million, respectively, of debts resulting from the Bank’s liabilities under acceptances or guarantees.

153


3.5.2 Classified by Remaining Maturity (Million Baht) Consolidated Financial Statements The Bank’s Financial Statements December 31, 2008 December 31, 2007 December 31, 2008 December 31, 2007

Within 1 year Over 1 year Total Add Accrued interest receivable Total Less Unearned discounts Total

362,690.35 681,918.91 1,044,609.26 4,835.46 1,049,444.72 (2,111.32) 1,047,333.40

404,408.96 365,624.58 551,539.92 680,521.65 955,948.88 1,046,146.23 5,156.23 4,838.79 961,105.11 1,050,985.02 (1,377.66) (60.40) 959,727.45 1,050,924.62

3.5.3 Classified by Currency and Customer’s Residence

407,460.95 550,664.61 958,125.56 5,160.50 963,286.06 (41.58) 963,244.48

(Million Baht)

Ann ual Report 2008 Krung Thai Bank Pcl.

Consolidated Financial Statements December 31, 2007 December 31, 2008 Domestic

Overseas

Total

Domestic

Overseas

Thai Baht 1,001,543.86 43.83 1,001,587.69 917,702.63 52.22 US Dollar 35,103.56 5,634.74 40,738.30 31,669.83 5,162.01 Other currencies 2,010.18 273.09 2,283.27 1,103.29 258.90 Total 1,038,657.60 5,951.66 1,044,609.26 950,475.75 5,473.13 Add Accrued interest receivable 4,788.47 46.99 4,835.46 5,097.01 59.22 Total 1,043,446.07 5,998.65 1,049,444.72 955,572.76 5,532.35 Less Unearned discounts (2,111.32) Total 1,047,333.40

Total

917,754.85 36,831.84 1,362.19 955,948.88 5,156.23 961,105.11 (1,377.66) 959,727.45

(Million Baht)

The Bank’s Financial Statements December 31, 2007 December 31, 2008 Domestic

Overseas

Total

Domestic

Overseas

Thai Baht 1,003,080.83 43.83 1,003,124.66 919,879.31 52.22 US Dollar 35,103.56 5,634.74 40,738.30 31,669.83 5,162.01 Other currencies 2,010.18 273.09 2,283.27 1,103.29 258.90 Total 1,040,194.57 5,951.66 1,046,146.23 952,652.43 5,473.13 Add Accrued interest receivable 4,791.80 46.99 4,838.79 5,101.28 59.22 Total 1,044,986.37 5,998.65 1,050,985.02 957,753.71 5,532.35 Less Unearned discounts (60.40) Total 1,050,924.62

154

Total

919,931.53 36,831.84 1,362.19 958,125.56 5,160.50 963,286.06 (41.58) 963,244.48


3.5.4 Classified by Business Types and Loan Classification (Million Baht) Consolidated Financial Statements December 31, 2008 Pass

Special Mention Substandard

Doubtful

Doubtful of Loss

Total

Agriculture and mining 25,871.96 557.96 101.67 544.17 1,452.28 28,528.04 Manufacturing and commercial 301,577.07 11,560.30 2,450.33 9,947.29 29,455.21 354,990.20 Real estate and construction 112,907.30 2,435.50 1,081.78 6,161.67 18,864.95 141,451.20 Public utilities and services 218,268.67 6,462.08 313.61 5,106.00 5,580.16 235,730.52 Housing loans 147,928.83 1,794.73 643.06 847.92 1,136.93 152,351.47 Others 128,592.61 1,168.63 228.16 347.09 1,221.34 131,557.83 Total 935,146.44 23,979.20 4,818.61 22,954.14 57,710.87 1,044,609.26 Add Accrued interest receivable 4,209.00 152.86 1.23 211.36 261.01 4,835.46 Total 939,355.44 24,132.06 4,819.84 23,165.50 57,971.88 1,049,444.72 Less Unearned discounts (2,111.32) Total 1,047,333.40

(Million Baht) Consolidated Financial Statements December 31, 2007 Pass

Special Mention Substandard

Doubtful

Doubtful of Loss

Agriculture and mining 26,567.61 1,726.43 301.60 479.92 1,480.08 Manufacturing and commercial 271,810.57 9,711.50 2,245.30 13,349.95 33,744.45 Real estate and construction 113,629.84 2,152.35 749.77 8,899.30 21,336.03 Public utilities and services 156,152.11 1,189.27 315.02 4,708.55 3,584.84 Housing loans 122,580.18 1,196.61 335.74 375.01 1,927.55 Others 152,017.10 1,114.49 276.12 221.95 1,769.64 Total 842,757.41 17,090.65 4,223.55 28,034.68 63,842.59 Add Accrued interest receivable 4,274.11 159.91 2.41 312.14 407.66 Total 847,031.52 17,250.56 4,225.96 28,346.82 64,250.25 Less Unearned discounts Total

Total

30,555.64 330,861.77 146,767.29 165,949.79 126,415.09 155,399.30 955,948.88 5,156.23 961,105.11 (1,377.66) 959,727.45

155


3.5.4 Classified by Business Types and Loan Classification (continued) (Million Baht) The Bank’s Financial Statements December 31, 2008 Pass

Special Mention Substandard

Doubtful

Doubtful of Loss

Total

Ann ual Report 2008 Krung Thai Bank Pcl.

Agriculture and mining 25,600.63 544.18 101.67 544.17 1,452.28 28,242.93 Manufacturing and commercial 300,583.07 11,545.18 2,450.33 9,947.29 29,455.21 353,981.08 Real estate and construction 113,904.41 2,402.80 1,078.76 6,161.67 18,864.95 142,412.59 Public utilities and services 216,676.73 6,429.05 307.02 5,106.00 5,580.16 234,098.96 Housing loans 147,928.83 1,794.73 643.06 847.92 1,136.93 152,351.47 Others 133,102.28 446.01 85.29 248.70 1,176.92 135,059.20 Total 937,795.95 23,161.95 4,666.13 22,855.75 57,666.45 1,046,146.23 Add Accrued interest receivable 4,212.33 152.86 1.23 211.36 261.01 4,838.79 Total 942,008.28 23,314.81 4,667.36 23,067.11 57,927.46 1,050,985.02 Less Unearned discounts (60.40) Total 1,050,924.62

(Million Baht) The Bank’s Financial Statements December 31, 2007 Pass

Special Mention Substandard

Doubtful

Doubtful of Loss

Agriculture and mining 26,448.95 1,725.78 301.03 479.92 1,480.08 Manufacturing and commercial 271,165.28 9,709.10 2,245.30 13,349.95 33,744.45 Real estate and construction 117,281.31 2,120.47 742.86 8,899.30 21,336.03 Public utilities and services 160,826.52 1,181.28 315.02 4,708.55 3,584.84 Housing loans 122,580.18 1,196.61 335.74 375.01 1,927.55 Others 146,995.12 811.15 266.59 221.95 1,769.64 Total 845,297.36 16,744.39 4,206.54 28,034.68 63,842.59 Add Accrued interest receivable 4,278.38 159.91 2.41 312.14 407.66 Total 849,575.74 16,904.30 4,208.95 28,346.82 64,250.25 Less Unearned discounts Total

156

Total

30,435.76 330,214.08 150,379.97 170,616.21 126,415.09 150,064.45 958,125.56 5,160.50 963,286.06 (41.58) 963,244.48


3.5.5 Classified by Loan Classification

(Million Baht)

The Bank’s Financial Statements December 31, 2008 Debt Loans and Accrued Interest Net of Receivable Collateral (1)

Allowance Rate (%)

Pass ** 864,204.24 388,330.12 1 Special Mention ** 18,818.58 3,238.79 2 Substandard 4,667.36 777.37 100 Doubtful 23,067.11 4,850.46 100 Doubtful of Loss 57,899.61 7,305.09 100 Total 968,656.90 404,501.83 Allowance for doubtful accounts for total loans under BOT regulations Less Allowance for doubtful accounts for inter-bank and money market items Allowance for doubtful accounts for loans under BOT regulations Allowance for doubtful accounts provided as at December 31, 2008 (see Note 3.6) Excess allowance for doubtful accounts over and above the BOT minimum requirement

Minimum Allowance Required as to BOT’s Regulations

4,313.72 3,584.26 777.37 5,993.69 19,705.75 34,374.79 34,374.79 (389.94) 33,984.85 34,889.47 904.62

Consolidated Financial Statements has shown loans and accrued interest receivable as at December 31, 2008 totaling to Bath 965,069.00 million and an allowance for doubtful accounts required for loans amounting to Baht 34,169.93 million (having provided Baht 35,075.26 million) which included loans and allowance for doubtful accounts of subsidiaries amounting to Baht 12,125.29 million and Baht 185.79 million, respectively.

(Million Baht)

The Bank’s Financial Statements December 31, 2007 Debt Loans and Accrued Interest Net of Collateral 1 Receivable

Allowance Rate (%)

Pass ** 760,789.32 334,562.60 1 Special Mention ** 15,378.83 2,958.99 2 Substandard 4,126.31 1,649.13 100 Doubtful 28,346.82 4,751.25 100 Doubtful of Loss 64,172.09 14,604.57 100 Total 872,813.37 358,526.54 Allowance for doubtful accounts for total loans under BOT regulations Less Allowance for doubtful accounts for inter-bank and money market items Allowance for doubtful accounts for loans under BOT regulations Allowance for doubtful accounts provided as at December 31, 2007 (see Note 3.6) Excess allowance for doubtful accounts over and above the BOT minimum requirement

Minimum Allowance Required as to BOT’s Regulations

3,887.29 132.72 1,649.13 6,780.81 20,133.33 32,583.28 32,583.28 (355.93) 32,227.35 35,527.79 3,300.44

Consolidated Financial Statements as at December 31, 2007 has shown loans and accrued interest receivable totaling to Baht 869,296.34 million and an allowance for doubtful accounts required for loans amounting to Baht 32,273.57 million (having provided Baht 35,574.01 million) which included loans and allowance for doubtful account of subsidiaries amounting to Baht 7,110.40 million and Baht 46.22 million, respectively. ** Accrued interest receivable were not included in Pass and Special Mention Categories. 1 Debts net of collateral represent those after deducting the present value of expected cash flows from debtors or from the sale of collateral.

157


Ann ual Report 2008 Krung Thai Bank Pcl.

As at December 31, 2008 and 2007, the Bank’s classified loans and accrued interest receivable included inter-bank and money market items were Baht 1,116,798.34 million and Baht 1,009,427.93 million, respectively. Such loans, when net of exempt classified debts as at December 31, 2008 and 2007 thus comprised loans guaranteed by MOF of Baht 143,790.55 million and Baht 135,159.41 million and restructuring loans on which a loss was recognized of Baht 4,350.89 million and Baht 1,455.15 million, respectively. Thus, the residual amount of loans and accrued interest receivable of Baht 968,656.90 million and Baht 872,813.37 million, respectively, were required to provide for as prescribed by the Bank of Thailand’s loan classification guidelines. As at December 31, 2008 and 2007, the Bank’s allowance for doubtful accounts for loans in the Bank’s financial statements totaling Baht 34,889.47 million and Baht 35,527.79 million, which were in excess over the BOT minimum requirement by Baht 904.62 million and Baht 3,300.44 million, respectively. 3.5.6 Non-Performing Loans (NPLs) As at December 31, 2008 and 2007, the Bank’s non-performing loans according to the BOT’s guideline comprised loans classified as substandard, doubtful, doubtful of loss and loss which ceased to be recognized, amounting to Baht 85,188.34 million and Baht 96,083.81 million or 7.63 percent and 9.53 percent of the Bank’s loan portfolio (including loans to banks and money market as financial institutions), respectively. Loans ceasing to be recognized in line with the Bank of Thailand’s definition comprised loans classified according to BOT’s classification guideline as substandard, doubtful, doubtful of loss and loss. For the years ended December 31, 2008 and 2007, impaired-assets were written off both principal and accrued interest receivable amounting to Baht 13,719.56 million and Baht 23,239.40 million, respectively. 3.5.7 Loans to Closed Financial Institutions As at December 31, 2008, the Bank’s loans outstanding and accrued interest receivable to 4 debtors, whose businesses were officially ordered discontinuing and considered as impairedassets, were Baht 68.07 million which fully provided as to the BOT’s requirement. 3.5.8 Loans to Potential Delisted Companies As at December 31, 2008 and 2007, the Bank’s loans extended to 5 potential delisted companies were Baht 446.83 million and Baht 1,618.87 million including accrued interest receivable amounting to Baht 0.01million and Baht 0.01 million, respectively, bringing up the total to Baht 446.84 million and Baht 1,618.88 million. They were provided for Baht 118.83 million and Baht 142.27 million, respectively, as an allowance for doubtful accounts in accordance with the Bank of Thailand’s regulations for debt classification and an allowance for TDR revaluation. 3.5.9 Troubled Debt Restructuring The original value of the 5,591 and 5,661 cases of troubled debts restructured for the years ended December 31, 2008 and 2007 were Baht 41,404.29 and 18,338.38 million. Those related interest and principal repayments were Baht 6,022.87 and 7,170.58 million, whereas lending extended increased by Baht 6,420.15 and 2,114.85 million and losses resulted from restructuring were Baht 517.77 and 215.76 million, respectively.

158


Troubled Debt Restructuring for the year ended December 31, 2008 was set out as follows:

(Million Baht)

The Bank’s Financial Statements Troubled Debt Restructuring Approaches

Asset transferred Debt-equity swap Loan terms modification Combination of restructuring

Book Value of Debt as to Type of Assets Fair Value Original term Transferred 35 2,360.53 Land & Premises 2,019.90

No. of Cases

- 1,124 4,432 5,591

- 9,557.53 29,486.23 41,404.29

As at December 31, 2008 the Bank has outstanding restructured loans for 24,598 cases amounting to Baht 72,713.41 million, of which 480 cases amounting to Baht 6,073.03 million, have been monitored under the new contractual agreements. As at December 31, 2008, the original value of 5,695 cases of restructured loans shown in Consolidated Financial Statements was Baht 41,467.39 million. Troubled Debt Restructuring for the year ended December 31, 2007 was set out as follows:

(Million Baht)

The Bank’s Financial Statements Troubled Debt Restructuring Approaches

Asset transferred Debt-equity swap Loan terms modification Combination of restructuring

Book Value of Debt as to Type of Assets Fair Value Original term Transferred 15 135.13 Land & Premises 127.21

No. of Cases

- 1,108 4,538 5,661

- 4,787.95 13,415.30 18,338.38

159


3.6 Allowance for Doubtful Accounts (Million Baht) The Bank’s Financial Statements December 31, 2008 Pass

Special Mention

Substandard

Doubtful

Allowance Doubtful of in excess of BOT’s Loss Guideline

Total

Ann ual Report 2008 Krung Thai Bank Pcl.

Opening balance 3,531.50 132.58 1,649.13 6,780.81 20,133.33 3,300.44 35,527.79 Increased (Decreased) allowance for doubtful accounts 392.43 3,451.53 (871.76) (787.12) 10,910.74 (2,395.82) 10,700.00 Allowance for doubtful accounts transferred from TDR revaluation - - - - 884.02 - 884.02 Bad debt recovered - - - - 3,889.52 - 3,889.52 Bad debts written off - - - - (13,719.56) - (13,719.56) Others - - - - (29.15) - (29.15) Total 3,923.93 3,584.11 777.37 5,993.69 22,068.90 904.62 37,252.62 Allowance for doubtful accounts transferred from SAM (net) - - - - 647.28 - 647.28 Allowance for doubtful accounts transferred to TAMC (net) - - - - (13.98) - (13.98) Transfer of impairment allowance from potential losses arising on debt transferred to TAMC - - - - 3.55 - 3.55 Allowance for doubtful accounts transferred to allowance for impairment - CDO - - - - (3,000.00) - (3,000.00) Closing Balance 3,923.93 3,584.11 777.37 5,993.69 19,705.75 904.62 34,889.47

The Baht 35,075.26 million of an allowance for doubtful accounts shown in the Bank’s consolidated financial statements as at December 31, 2008 included those of its subsidiaries amounting to Baht 185.79 million.

160


3.6 Allowance for Doubtful Accounts (continued)

For the year ended December 31, 2008, the Bank has set aside monthly provisioning of Baht 500.00 million totaling to Baht 6,000.00 million and set more of Baht 4,700.00 million bringing up the grand total to Baht 10,700.00 million.

(Million Baht) The Bank’s Financial Statements December 31, 2007 Pass

Special Mention

Substandard

Doubtful

Allowance Doubtful of in excess of BOT’s Loss Guideline

Total

Opening balance 2,725.20 25.62 1,318.31 10,665.09 18,640.00 4,926.46 38,300.68 Increased (Decreased) allowance for doubtful accounts 806.30 106.96 330.82 (3,884.28) 23,766.22 (1,626.02) 19,500.00 Allowance for doubtful accounts transferred to TDR revaluation - - - - (175.48) - (175.48) Bad debt recovered - - - - 1,084.03 - 1,084.03 Bad debts written off - - - - (23,239.40) - (23,239.40) Others - - - - 87.33 - 87.33 Total 3,531.50 132.58 1,649.13 6,780.81 20,162.70 3,300.44 35,557.16 Allowance for doubtful accounts transferred from SAM (net) - - - - 13.68 - 13.68 Allowance for doubtful accounts transferred to TAMC (net) - - - - (53.02) - (53.02) Transfer of impairment allowance from potential losses arising on debt transferred to TAMC - - - - 9.97 - 9.97 Closing Balance 3,531.50 132.58 1,649.13 6,780.81 20,133.33 3,300.44 35,527.79

The Baht 35,574.01 million of an allowance for doubtful accounts in the Bank’s consolidated financial statements as at December 31, 2007 included those of its subsidiaries amounting to Baht 46.22 million. For the year 2007, the Bank has set aside monthly provisioning of Baht 300.00 million totaling to Baht 3,520.43 million and Baht 15,900.00 million more bringing the total to Baht 19,420.43 million. With the inclusion of those of oversea branches, which stated a net increase of Baht 79.57 million, the Bank has to provide a total of Baht 19,500.00 million.

161


3.7 Revaluation Allowance for Debt Restructuring (Million Baht) Consolidated and the Bank’s Financial Statements December 31, 2008

Opening balance Transfer from (to) allowance for doubtful accounts Closing balance

December 31, 2007

1,393.64 (884.02) 509.62

1,218.16 175.48 1,393.64

The revaluation allowance for troubled debt restructuring (TDR) was transferred from

allowance for doubtful accounts for restructured debtors, and vice versa when the debtors failed to comply with the TDR new agreement. The allowance for revaluation on TDR has not been amortized and recognized as income upon receipt of debt repayment but transferred to an allowance for doubtful accounts instead as the restructured debts may again become non-performing due to economic instability.

Ann ual Report 2008 Krung Thai Bank Pcl.

3.8 Properties Foreclosed, net Type of Properties Foreclosed

(Million Baht)

The Bank’s Financial Statements December 31, 2008 Opening Balance

Additions

Disposals

Closing Balance

Acquired from debt settlement Immovable assets 37,725.62 8,381.27 7,392.74 38,714.15 Movable assets 19.37 - - 19.37 Total 37,744.99 8,381.27 7,392.74 38,733.52 Others (closed branches) 291.61 22.55 91.82 222.34 Properties foreclosed in transit 1,686.54 5,478.10 3,750.87 3,413.77 Total 39,723.14 13,881.92 11,235.43 42,369.63 Less Allowance for impairment (5,010.86) - (193.05) (4,817.81) Properties Foreclosed, net 34,712.28 13,881.92 11,042.38 37,551.82

The Baht 37,579.79 million of Properties foreclosed shown in the Bank’s consolidated

financial statements as at December 31, 2008 included those movable assets forclosed of its subsidiaries amounting to Baht 27.97 million (balance brought forward Baht 7.68 million, an increase of Baht 193.16 million, sold out Baht 155.17 million, thus, balance carried forward of Baht 45.67 million less an allowance for impairment of Baht 17.70 million).

(Million Baht)

Type of Properties Foreclosed

162

The Bank’s Financial Statements December 31, 2007 Opening Balance

Additions

Disposals

Closing Balance

Acquired from debt settlement Immovable assets 35,488.23 11,819.25 9,581.86 37,725.62 Movable assets 19.37 - - 19.37 Total 35,507.60 11,819.25 9,581.86 37,744.99 Others (closed branches) 438.11 47.96 194.46 291.61 Properties foreclosed in transit 3,420.83 9,939.47 11,673.76 1,686.54 Total 39,366.54 21,806.68 21,450.08 39,723.14 Less Allowance for impairment (5,258.20) - (247.34) (5,010.86) Properties Foreclosed, net 34,108.34 21,806.68 21,202.74 34,712.28


The Baht 34,717.80 million of Properties foreclosed shown in the Bank’s consolidated financial statements as at December 31, 2007 included those movable assets of its subsidiaries amounting to Baht 5.52 million (balance brought forward Baht 1.50 million, an increase of Baht 47.20 million, sold out Baht 41.02 million, thus, balance carried forward of Baht 7.68 million less an allowance for impairment of Baht 2.16 million). The reversal or increase of impairment loss has caused a decline of the allowance for properties foreclosed impairment amounting to Baht 193.05 and 247.34 million, respectively as at December 31, 2008 and 2007. The Bank generated the Baht 1,127.53 million and the Baht 796.02 million of net profit on sale of properties foreclosed for the year ended December 31, 2008 and 2007, respectively.

3.9 Properties, Premises and Equipment

Properties, premises and equipment as at December 31, 2008 and 2007 were as follows: Consolidated Financial Statements December 31, 2008 Cost

(Million Baht)

Accumulated Depreciation

Allowance Properties, Premises for and Opening Additions Disposals Closing Opening Additions Disposals Closing Impairment Equipment Balance Balance Balance Balance

Land Historical cost 5,849.38 55.57 Add. Revaluation 5,971.50 - Premises 9,993.57 67.22 Equipment 10,775.18 3,502.80 Others 55.13 41.43 Total 32,644.76 3,667.02

22.55 5,882.40 - - - - 56.54 5,825.86 - 5,971.50 - - - - - 5,971.50 25.19 10,035.60 4,645.62 461.52 20.51 5,086.63 - 4,948.97 867.29 13,410.69 6,105.28 1,576.26 95.84 7,585.70 113.00 5,711.99 - 96.56 - - - - - 96.56 915.03 35,396.75 10,750.90 2,037.78 116.35 12,672.33 169.54 22,554.88 Consolidated Financial Statements December 31, 2007

(Million Baht)

Cost

Accumulated Depreciation Allowance Properties, Premises for Closing Closing and Opening Additions Disposals Opening Additions Disposals Impairment Equipment Balance Balance Balance Balance

Land Historical cost 5,872.56 13.68 36.86 5,849.38 - - - - 38.55 5,810.83 Add. Revaluation 5,976.65 - 5.15 5,971.50 - - - - - 5,971.50 Premises 9,673.00 339.24 18.67 9,993.57 4,173.72 479.41 7.51 4,645.62 - 5,347.95 Equipment 9,297.54 1,532.53 54.89 10,775.18 4,968.53 1,190.76 54.01 6,105.28 113.00 4,556.90 Others 96.77 - 41.64 55.13 - - - - - 55.13 Total 30,916.52 1,885.45 157.21 32,644.76 9,142.25 1,670.17 61.52 10,750.90 151.55 21,742.31

163


3.9 Properties, Premises and Equipment (continued)

The Bank’s Financial Statements December 31, 2008

(Million Baht)

Cost

Accumulated Depreciation Allowance Properties, Premises for Closing Closing and Opening Additions Disposals Opening Additions Disposals Impairment Equipment Balance Balance Balance Balance

Land Historical cost 6,070.34 55.57 22.55 6,103.36 - - - - 56.54 6,046.82 Add. Revaluation 5,971.50 - - 5,971.50 - - - - - 5,971.50 Premises 9,578.47 49.33 25.19 9,602.61 4,518.69 427.19 20.51 4,925.37 - 4,677.24 Equipment 6,279.78 1,129.91 77.32 7,332.37 4,164.16 740.76 75.43 4,829.49 113.00 2,389.88 Others 55.05 41.43 - 96.48 - - - - - 96.48 Total 27,955.14 1,276.24 125.06 29,106.32 8,682.85 1,167.95 95.94 9,754.86 169.54 19,181.92 Ann ual Report 2008 Krung Thai Bank Pcl.

The Bank’s Financial Statements December 31, 2007

(Million Baht)

Cost

Accumulated Depreciation Allowance Properties, Premises for Closing Closing and Opening Additions Disposals Opening Additions Disposals Impairment Equipment Balance Balance Balance Balance

Land Historical cost 6,096.57 10.63 36.86 6,070.34 - - - - 38.55 6,031.79 Add. Revaluation 5,976.65 - 5.15 5,971.50 - - - - - 5,971.50 Premises 9,346.79 250.35 18.67 9,578.47 4,072.91 453.29 7.51 4,518.69 - 5,059.78 Equipment 5,891.90 442.77 54.89 6,279.78 3,598.79 619.41 54.04 4,164.16 113.00 2,002.62 Others 92.29 - 37.24 55.05 - - - - - 55.05 Total 27,404.20 703.75 152.81 27,955.14 7,671.70 1,072.70 61.55 8,682.85 151.55 19,120.74

The allowance for impairment of land as at December 31, 2008 and 2007 was set out as follows: (Million Baht) December 31, 2008

Begining Balance Add Additional Allowance Less Reversed to income Ending Balance

164

38.55 17.99 - 56.54

December 31, 2007

56.54 - (17.99) 38.55


3.10 Other assets (Million Baht) Consolidated Financial Statements The Bank’s Financial Statements December 31, 2008 December 31, 2007 December 31, 2008 December 31, 2007

Accrued interest receivable and dividend income 1,151.32 Prepaid expense 524.20 Advances & Prepayment 17.91 Inter-office Account 150.77 Account receivable - Dhipyasin Co., Ltd. (formerly Sayam Bank Ltd.) (see Note 3.27.1) 335.00 Differences from Derivative Revaluation 4,324.80 Account Receivable - Revenue Department 428.35 Sundry debtors and assets 3,927.52 Total 10,859.87

1,770.26 404.10 41.77 - 335.00 4,308.76 2,820.91 5,213.15 14,893.95

1,150.34 358.70 16.29 150.77

1,769.93 295.74 40.98 -

335.00 335.00 4,324.80 4,308.76 130.57 2,478.58 3,548.84 4,703.77 10,015.31 13,932.76

Included in “Accrued Interest Receivable and Dividend Income” as at December 31, 2008 and 2007 were Baht 181.74 million and Baht 306.00 million, respectively representing accrued interest receivable on government and state enterprise bonds. Included in “Sundry Debtors and Assets” as at December 31, 2008 and 2007 were the differences between debts transferred to BBC Asset Management Co., Ltd. and a promissory note received amounting to Baht 139.57 million, which was included in the balances notified to the FIDF on August 15, 2002. (see Note 3.27.2)

3.11 Deposits 3.11.1 Classified by Product

(Million Baht) Consolidated Financial Statements The Bank’s Financial Statements December 31, 2008 December 31, 2007 December 31, 2008 December 31, 2007

Demand deposits 61,408.43 75,129.89 61,438.42 76,017.09 Savings deposits 532,079.06 489,338.54 532,354.11 489,877.23 Time deposits - Less than 6 months 196,652.81 196,386.12 196,663.78 196,387.06 - 6 months - less than 1 year 83,862.93 63,937.74 83,862.93 63,937.74 - 1 year and over 189,212.66 175,878.64 189,212.66 175,878.64 Total 1,063,215.89 1,000,670.93 1,063,531.90 1,002,097.76

165


3.11.2 Classified by Remaining Maturity (Million Baht) Consolidated Financial Statements The Bank’s Financial Statements December 31, 2008 December 31, 2007 December 31, 2008 December 31, 2007

Within 1 year Over 1 year Total

1,033,157.12 940,039.84 1,033,473.13 941,466.67 30,058.77 60,631.09 30,058.77 60,631.09 1,063,215.89 1,000,670.93 1,063,531.90 1,002,097.76

3.11.3 Classified by Currency and Residence of Depositors (Million Baht) Consolidated Financial Statements December 31, 2007 December 31, 2008

Domestic Ann ual Report 2008 Krung Thai Bank Pcl.

Thai Baht US Dollar Other currencies Total

1,041,409.38 19,555.10 1,344.33 1,062,308.81

Overseas

Total

Domestic

25.03 1,041,434.41 991,631.67 849.47 20,404.57 7,087.26 32.58 1,376.91 826.88 907.08 1,063,215.89 999,545.81

Overseas

Total

16.56 991,648.23 1,079.44 8,166.70 29.12 856.00 1,125.12 1,000,670.93

(Million Baht)

The Bank’s Financial Statements December 31, 2007 December 31, 2008 Domestic

Thai Baht US Dollar Other currencies Total

1,041,725.39 19,555.10 1,344.33 1,062,624.82

Overseas

Total

Domestic

25.03 1,041,750.42 993,058.50 849.47 20,404.57 7,087.26 32.58 1,376.91 826.88 907.08 1,063,531.90 1,000,972.64

3.12 Interbank and Money Market Items

Overseas

Total

16.56 993,075.06 1,079.44 8,166.70 29.12 856.00 1,125.12 1,002,097.76

(Million Baht)

Consolidated Financial Statements December 31, 2007 December 31, 2008 Demand

166

Time

Total

Demand

Time

Total

3.12.1 Domestic items Bank of Thailand and Financial Institutions Development Fund 29.34 4,826.08 4,855.42 8.85 14,361.85 14,370.70 Commercial banks 14,111.55 0.01 14,111.56 1,384.09 5,783.16 7,167.25 Other banks 337.05 - 337.05 466.18 - 466.18 Finance Co., Finance & Securities Co., Securities Co., and Credit Foncier Co. 2,119.36 5.97 2,125.33 1,347.05 265.96 1,613.01 Other financial institutions 9,644.24 879.48 10,523.72 10,424.89 997.44 11,422.33 Total Domestic Items 26,241.54 5,711.54 31,953.08 13,631.06 21,408.41 35,039.47


3.12 Interbank and Money Market Items (continued) (Million Baht)

Consolidated Financial Statements December 31, 2007 December 31, 2008 Demand

Time

Total

Demand

Time

Total

3.12.2 Foreign items US Dollar 72.35 4,046.49 4,118.84 34.80 4,058.83 4,093.63 Japanese Yen - 220.96 220.96 - 181.72 181.72 Other currencies 153.71 - 153.71 286.27 - 286.27 Total Foreign Items 226.06 4,267.45 4,493.51 321.07 4,240.55 4,561.62 Total Domestic & Foreign Items 26,467.60 9,978.99 36,446.59 13,952.13 25,648.96 39,601.09

(Million Baht)

The Bank’s Financial Statements December 31, 2007 December 31, 2008 Demand

Time

Total

Demand

Time

Total

3.12.1 Domestic items Bank of Thailand and Financial Institutions Development Fund 29.34 4,826.08 4,855.42 8.85 14,361.85 14,370.70 Commercial banks 14,111.55 0.01 14,111.56 1,384.09 5,783.16 7,167.25 Other banks 337.05 - 337.05 466.18 - 466.18 Finance Co., Finance & Securities Co., Securities Co., and Credit Foncier Co. 2,138.62 6.30 2,144.92 1,376.57 266.28 1,642.85 Other financial institutions 9,644.24 879.48 10,523.72 10,424.89 997.44 11,422.33 Total Domestic Items 26,260.80 5,711.87 31,972.67 13,660.58 21,408.73 35,069.31 3.12.2 Foreign items US Dollar 72.35 4,046.49 4,118.84 34.80 4,058.83 4,093.63 Japanese Yen - 220.96 220.96 - 181.72 181.72 Other currencies 153.71 - 153.71 286.27 - 286.27 Total Foreign Items 226.06 4,267.45 4,493.51 321.07 4,240.55 4,561.62 Total Domestic & Foreign Items 26,486.86 9,979.32 36,466.18 13,981.65 25,649.28 39,630.93

Mostly disclosed in Bank of Thailand and Financial Institutions Development Fund as at December 31, 2008 and 2007 were the Baht 4,824.54 million and the Baht 14,361.83 million, respectively, of low-interest loans as debt relief extended to affected poultry farm from avian flu, tsunami victims and SMEs.

167


3.13 Borrowings Borrowings classified by types of securities and sources of fund were as follows:

(Million Baht)

Type of Borrowings

Consolidated Financial Statements December 31, 2007 December 31, 2008 Domestic

Overseas

Total

Domestic

Overseas

Total

Ann ual Report 2008 Krung Thai Bank Pcl.

Short - term Borrowings - From Ministry of Finance 1.17 - 1.17 1.17 - 1.17 - KTB Debenture No. 1/2006 6,000.00 - 6,000.00 - - - - Short-term B/E 42,917.06 - 42,917.06 14,559.81 - 14,559.81 Total Short-Term Borrowings 48,918.23 - 48,918.23 14,560.98 - 14,560.98 Long - term Borrowings - KTB Subordinated notes No. 1/2004 10,000.00 - 10,000.00 10,000.00 - 10,000.00 No. 1/2005 10,400.00 - 10,400.00 10,400.00 - 10,400.00 No. 1/2008 7,508.40 - 7,508.40 - - - - KTB Debenture No. 1/2006 - - - 6,000.00 - 6,000.00 - Perpetual Hybrid Tier 1 Securities 1,440.00 7,687.63 9,127.63 1,440.00 7,428.81 8,868.81 - Principal Protected Index Linked P/N 122.00 - 122.00 122.00 - 122.00 - Long-term B/E 14,150.00 - 14,150.00 430.00 - 430.00 Total Long-Term Borrowings 43,620.40 7,687.63 51,308.03 28,392.00 7,428.81 35,820.81 Total Borrowings 92,538.63 7,687.63 100,226.26 42,952.98 7,428.81 50,381.79

168


3.13 Borrowings (continued) (Million Baht) The Bank’s Financial Statements December 31, 2007 Type of Borrowings December 31, 2008 Domestic

Overseas

Total

Domestic

Overseas

Total

Short - term Borrowings - From Ministry of Finance 1.17 - 1.17 1.17 - 1.17 - KTB Debenture No. 1/2006 6,000.00 - 6,000.00 - - - - Short-term B/E 42,917.06 - 42,917.06 14,559.81 - 14,559.81 Total Short-Term Borrowings 48,918.23 - 48,918.23 14,560.98 - 14,560.98 Long - term Borrowings - KTB Subordinated notes No. 1/2004 10,000.00 - 10,000.00 10,000.00 - 10,000.00 No. 1/2005 10,400.00 - 10,400.00 10,400.00 - 10,400.00 No. 1/2008 7,508.40 - 7,508.40 - - - - KTB Debenture No. 1/2006 - - - 6,000.00 - 6,000.00 - Perpetual Hybrid Tier 1 Securities 1,440.00 7,687.63 9,127.63 1,440.00 7,428.81 8,868.81 - Principal Protected Index Linked P/N 122.00 - 122.00 122.00 - 122.00 - Long-term B/E 14,150.00 - 14,150.00 430.00 - 430.00 Total Long-Term Borrowings 43,620.40 7,687.63 51,308.03 28,392.00 7,428.81 35,820.81 Total Borrowings 92,538.63 7,687.63 100,226.26 42,952.98 7,428.81 50,381.79

Short-term borrowings Short-term borrowings from the Ministry of Finance (MOF) was subsequently refinanced as an assistance to the affected parties in the event of Thailand Tantalum rioting in Phuket. The maturity fall due in 1998. The Bank had filed a bankruptcy proceedings against the guarantor as the debtor entered a default on payment. Such proceedings was resolved. It has been during the proceeds distribution process paid to MOF under Bankruptcy Act. The Baht 6,000.00 million represented the first issuance of debentures on March 16, 2006 with the maturity fall due on March 16, 2009. Such debentures characterized as unsubordinated in name certificates and unsecured without bondholder representative. The maturity was 3 years, having a face value of Baht 1,000.00 each, redeemable when fall due at a fixed coupon of 5.34 percent p.a. The interest will be paid semiannually on March 16 and September 16, annually, over the time to maturity. The first payment has fall on September 16, 2006 whereas the final payment of interest will be on March 16, 2009. As at December 31, 2008 and 2007, the Bank has offered Bill of Exchange underlying borrowings from public amounting to Baht 42,917.06 million and Baht 14,559.81 million, respectively with the maturity due in 1-12 mths. The coupon rate is 2.75-3.70 percent per annum and the interest paid when due. Long-term borrowings Subordinated Notes represented the unsecured notes with holder certificates and

169


Ann ual Report 2008 Krung Thai Bank Pcl.

non-convertible holding by shareholder representative. The maturity was 10 years from the issued dated, having a face value of Baht 1,000.00. The Bank is eligible to redeem ahead of their maturity when due in 5 years or on the interest-paid date after 5 years from the issued date at the face value. The unsecured notes comprise the followings: 1. Subordinated Notes No. 1/2004 of Baht 10,000.00 million issued on October 22, 2004, redeemable on October 22, 2014 at a fixed coupon of 5.15 percent p.a. during year 1-5 and 6.70 percent p.a. during year 6-10. The interest was paid half-yearly on April 22 and October 22, annually, over the time to maturity. The first repayment was on April 22, 2005. The Bank has issued and offered subordinated notes for sale according to the resolution passed by the Shareholders’ extraordinary meeting No.1/2002, on September 24, 2002, in the amount not exceeding Baht 10,000.00 million or other currencies equivalent. 2. Subordinated Notes No. 1/2005 of Baht 10,400.00 million, issued on May 18, 2005, redeemable on May 18, 2015 at a fixed coupon of 4.60 percent p.a. during year 1-5 and 6.0 percent p.a. during year 6-10. The interest was paid half-yearly on May 18 and November 18, annually, over the time to maturity. The first repayment was on November 18, 2005. The Shareholders’ ordinary meeting No. 12, on April 22, 2005 has passed a resolution for the Bank to issue and offer for sale the Subordinated Notes in Thai Baht and/or other currencies equivalent in the amount not exceeding Baht 40,000.00 million within 5 years. 3. The Baht 7,508.40 million represented the first issuance of subordinated debentures for the year 2008 with 10 year maturity and fall due on June 6, 2018, interest paid twice a year, comprised the followings: - Subordinated Notes, 1st set, amounting to Baht 6,879.20 million at a fixed coupon of 5.0 percent p.a. during year 1-5 and 6.5 percent p.a. during year 6-10. - Subordinated Notes, 2nd set, amounting to Baht 629.20 million at a floating coupon of underlying deposit rate plus 1.5 percent p.a. during year 1-5 and plus 2.5 percent p.a. during year 6-10. - Perpetual Tier 1 Securities The US$ 220,000,000 Perpetual Non-Cumulative qualified as Tier 1 Securities (Hybrid Tier 1) have been issued and offered on October 10, 2006 by Krung Thai Bank Pcl. at the average rate of exchange announced by the BOT as at December 31, 2008 of Baht 34.9438 per USD equivalent to Baht 7,687.63 million. The Securities have been offered and sold through the Singapore branch. The Securities will constitute unsecured and subordinated obligation of the Bank. Interest will be non-cumulative and interest payment will be suspended if on any payment date the Bank would experience current loss. Non-cumulative Hybrid Tier 1 Securities have been issued and offered on November 28, 2006 amounting to Baht 1,440.00 million. The BOT has approved the inclusion of Hybrid Tier 1 Securities to Tier 1 Capital Fund. It has been offered for sale to eleven (11) domestic investors at the whole amount. Further, the ordinary shareholders’ meeting No. 13 held on April 21, 2006 has passed a resolution for the Bank to issue and offer more of Hybrid Tier 1 Securities at the amount not exceeding Baht 100,000.00 million or in other currencies equivalent within 5 years from the previous approved at Baht 40,000 million in the year 2005. On April 27, 2007 the ordinary shareholders’ meeting No. 14 has also passed a resolution for the Bank to issue and offer various types of securities additionally at the amount not exceeding Baht 100,000.00 million. On September 20, 2007, the Bank has issued Principal Protected Index Linked P/N on behalf of a certain Fund Unit within the amount of Baht 122.00 million, with 3-year maturity at a discount rate of 97 percent and, simultaneously, bought back Principal Protected Index Linked P/N from a certain financial institution at the same discount rate of 97 percent for the entirely hedging purpose. The P/N has been issued on October 5, 2007 with the Baht 122.00 million face value, non-transferable and non-convertible and fall due on October 5, 2010.

170


As at December 31, 2008 and 2007, the Bank has offered long-term Bill of Exchange as borrowings from public amounting to Baht 14,150.00 and 430.00 million, respectively, with 2-5 year maturity and interest rate at 3.25-5.08 percent, p.a. paid half-yearly.

3.14 Accounting Estimates

As at December 31, 2008 and 2007 of the total Baht 2,712.92 and 2,715.80 million encompassed the potential accounting estimates for impaired-assets transferred to TAMC amounting to Baht 2,712.23 million and Baht 2,715.78 million, (see Note 3.29) and for Contingent amounting to Baht 0.69 million and 0.02 million, respectively. (see Note 3.19) 3.15 Other liabilities Other liabilities comprise the followings:

(Million Baht) Consolidated Financial Statements The Bank’s Financial Statements December 31, 2008 December 31, 2007 December 31, 2008 December 31, 2007

Accrued expenses account Inter - office account Suspense account creditors Payable to revenue dept. Deferred income account Differences from Derivative Revaluation Sundry liabilities Total

1,991.44 - 3,196.05 919.74 1,317.89 3,820.90 223.96 11,469.98

1,520.25 664.09 2,458.17 1,313.63 1,351.55 159.86 454.10 7,921.65

1,694.07 - 2,504.72 893.85 1,317.89 3,820.90 248.02 10,479.45

1,128.47 664.09 2,065.34 1,302.00 1,351.55 159.68 361.31 7,032.44

3.16 Share Capital 3.16.1 Ordinary Shares Of the 11,191,412,250 registered ordinary shares were the 11,179,749,000 paid-up shares. The residual of 11,663,250 registered shares served as the back up to the warrants granted to the Bank’s employees. The warrants as such have been entirely exercised on December 30, 2004. The registration of such residual paid up ordinary shares will be undertaken simultaneously with that of other Debentures, on the convenient manner. 3.16.2 Preferred Share The 5.5 million of preferred shares are fully paid-up. Preferred share has more preference over the ordinary share. Apart from entitling to the same voting rights and claims on dividends as ordinary share, it may enjoy certain preferential rights to a special dividend at a 3 percent fixed rate p.a. prior to the ordinary share when paid. 3.16.3 The Bank is the State Enterprise with the Financial Institutions Development Fund (FIDF) as the major shareholder, holding 6,156,635,967 shares or 55.04 percent of paid-up ordinary and preferred shares, as at December 31, 2008.

171


3.16.4 Statutory Capital Fund

(Million Baht) The Bank’s Financial Statements December 31, 2008 Basel II Guidelines

December 31, 2007 Basel I Guidelines

Ann ual Report 2008 Krung Thai Bank Pcl.

Tier 1 Capital Paid-up share capital 57,604.03 57,604.03 Premium on share capital 1.21 1.21 Legal Reserve 3,421.46 2,811.46 Net Income after appropriated 30,287.48 26,603.67 Hybrid Tier 1 9,697.26 9,697.26 Total Tier 1 Capital 101,011.44 96,717.63 Tier 2 Capital Appraisal Surplus on Land 4,157.88 4,157.88 Long-term Subordinated Debt 27,908.40 20,400.00 An allowance for Pass Asset-Classification 5,218.34 7,187.73 Revaluation surplus, net, on available-for-sale equity securities - 36.84 Total Tier 2 Capital 37,284.62 31,782.45 Total Capital Fund before less item 138,296.06 128,500.08 Less Revaluation Deficit on Investments in Available-for-Sale Equity Securities, net (1,971.31) - Total Capital Fund 136,324.75 128,500.08

As at December 31, 2008, the Bank’s Capital Fund has been calculated based on Basel II Guidelines tailoring according to the Notification of BOT No. SOR. NOR. SOR. 88/B.E. 2551 (2008) regarding the Composition of Capital Fund for Commercial Bank registered in the country. Supervisory revision of capital fund Guidelines is based on the International convergence of capital measurement and capital standards - A revised framework (Comprehensive version : June 2006) (Basel II guidelines) issued by Basel Committee on Banking Supervision (BCBS). Calculation of Capital Fund according to such Guidelines has taken all risk related into consideration which reflected risk - sensitive against the Bank’s assets in order to promote stronger and sustainable growth. The BOT’s regulation requires that Commercial Bank registered in Thailand maintain a ratio of capital fund to assets and contingencies of not less than 8.5 percent under the condition that tier 1 capital must not be less than 4.25 percent of such assets and contingencies. As at December 31, 2008 and 2007 the Bank maintained a ratio of capital fund to assets and contingencies as prescribed by the BOT’s regulation as follows: Rate (%) Total Capital Fund Tier 1 Capital

172

December 31, 2008 Basel II Guidelines

December 31, 2007 Basel I Guidelines

13.08 9.70

15.16 11.41


3.17 Legal Reserve

(Million Baht)

Net Income for the year Capital Reserve (5%) (see Note 3.18) Balance brought forward Total

2008 12,053.04 610.00 2,811.46 3,421.46

2007 6,112.58 310.00 2,501.46 2,811.46

Under the Public Limited Companies Act, the Bank is required to allocate to the capital reserve not less than 5 percent of its net income less accumulated losses brought forward, if any, until the capital reserve of not less than 10 percent of registered share capital is met. 3.18 Net Income Appropriation for the year 2007 and Dividend Paid Net income of 2007 amounting to Baht 6,112.58 million were appropriated according to the resolution passed by the shareholders’ ordinary meeting No.15 on April 25, 2008 and dividend were subsequently paid as follows:

(Million Baht) Legal reserve Dividend - Preferred shares (@ Baht 0.4545) Dividend - Ordinary shares (@ Baht 0.30) Net income carried forward

310.00 2.50 3,353.92 2,446.16

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3.19 Contingencies (Million Baht) Consolidated and the Bank’s Financial Statements December 31, 2007 December 31, 2008

Thai Baht

Foreign Currencies

Total

Thai Baht

Foreign Currencies

Total

Ann ual Report 2008 Krung Thai Bank Pcl.

Aval and guarantees Aval for bills 1,676.70 - 1,676.70 1,450.58 - 1,450.58 Guarantees for loans 1,213.36 2,373.05 3,586.41 1,616.67 3,061.19 4,677.86 2,890.06 2,373.05 5,263.11 3,067.25 3,061.19 6,128.44 Liability under unmatured import bills - 88.29 88.29 - 127.11 127.11 Letters of credit 770.42 19,234.29 20,004.71 1,373.70 14,730.93 16,104.63 Other contingencies Firm underwriting Debt instruments or Securities - - - 0.06 - 0.06 Other guarantees 53,148.94 10,737.57 63,886.51 46,909.85 9,689.54 56,599.39 FX forward/swap contracts - Bought - 145,554.08 145,554.08 - 49,631.70 49,631.70 - Sold - 180,820.33 180,820.33 - 104,199.90 104,199.90 FX option contracts - Bought - - - - 479.71 479.71 - Sold - - - - 479.71 479.71 Interest rate swap contracts 3,566.20 3,494.38 7,060.58 6,118.00 3,444.26 9,562.26 Embedded Derivatives - Assets 122.00 8,285.72 8,407.72 - - - - Liabilities 122.00 - 122.00 - - - Undrawn overdraft 105,169.69 92.20 105,261.89 97,997.81 47.29 98,045.10 Credit Linked Notes (CLN) - 698.87 698.87 - 1,597.19 1,597.19 Others - 3.96 3.96 - 4.31 4.31 Total Other Contingencies 162,128.83 349,687.11 511,815.94 151,025.72 169,573.61 320,599.33 Grand Total 165,789.31 371,382.74 537,172.05 155,466.67 187,492.84 342,959.51

174

The Bank has invested the USD 20.00 and 47.30 million equivalent to Thai Baht 698.87 and 1,597.19 million in CLN as at December 31, 2008 and 2007 and booked as Investments including committed in off-balance sheet item. Apart from contingent liabilities, as at December 31, 2008 and 2007 the Bank may have to shoulder potential debt incurred in connection with the significant filing of civil cases brought against the Bank of Baht 19,228.49 million and Baht 21,408.52 million, respectively. It has been expected that the final judgement may cause no material effect over the Bank’s financial position and operation. The Bank has set up provisions for contingencies amounting to Baht 0.69 million and Baht 0.02 million as at December 31, 2008 and 2007, respectively and shown in Accounting Estimates. (see Note 3.14)


3.20 Assets Pledged as Collateral (Million Baht) Consolidated and the Bank’s Financial Statements December 31, 2008

December 31, 2007

Government and state enterprise bonds pledged as collateral - at court 264.88 265.45 Total 264.88 265.45

3.21 Related-Party Transactions 3.21.1 Loans to the Bank’s executives (Senior Vice President and above), as at December 31, 2008 and 2007 were Baht 383.18 million and Baht 314.88 million, respectively. The average outstanding balance of loans at month-end was Baht 342.41 million and Baht 279.20 million, respectively. The loans outstanding as at December 31, 2008 and 2007 to close family of the Bank’s executives as referred to in the preceding paragraph were Baht 60.74 million and 60.26 million, respectively. (Million Baht) The Bank’s Financial Statements Pricing Policy for Loans and Contingencies

December 31, 2007 December 31, 2008 Loans Contingencies Loans Contingencies

3.21.2 The Bank’s loans and contingencies to businesses in which the Bank totally hold from 10 to 20 percent of shareholdings Dhipaya Insurance Pcl. Normal Bank Policy - 14.67 - 13.68 3.21.3 Loans and contingencies to businesses in which the Bank acquired 10 percent and more of shares from TDR Thai Baroda Industries Ltd. Normal Bank Policy - - 516.48 9.53 Cotco Metal Works Co., Ltd. Normal Bank Policy 345.98 1.69 375.78 21.15 Kiatpapha Co., Ltd. Normal Bank Policy 134.36 0.33 134.36 0.33 Manager Media Group Pcl. Normal Bank Policy - 0.29 - 0.29 Lanna Agribusiness Co., Ltd. Normal Bank Policy - - 67.04 - Kamol Kij Co., Ltd. Normal Bank Policy - - 33.45 3.21.4 Loans and contingencies to subsidiaries and associated companies Subsidiaries Krung Thai General Business Services Co., Ltd. Normal Bank Policy 55.72 0.20 78.13 0.20 Krung Thai Computer Services Co., Ltd. Normal Bank Policy 1,979.84 1.95 2,455.15 1.55 KTB Leasing Co., Ltd. Normal Bank Policy 13,338.59 0.57 7,858.71 0.07 Associated Companies Krung Thai IBJ Leasing Co., Ltd. Normal Bank Policy 311.25 1.86 517.00 3.14 Krungthai Card Pcl. Normal Bank Policy 4,970.00 - 2,800.00 -

175


(Million Baht) The Bank’s Financial Statements Pricing Policy for Loans and Contingencies

December 31, 2007 December 31, 2008 Loans Contingencies Loans Contingencies

3.21.5 Loans and contingencies to Related Companies

Ann ual Report 2008 Krung Thai Bank Pcl.

With Common Director Padaeng Industry Pcl. Normal Bank Policy - 3.00 - 3.00 Provincial Electricity Authority * Normal Bank Policy - - - 278.11 CH. Karnchang Pcl. Normal Bank Policy 1,000.00 2,414.61 6.27 1,736.55 RCL Pcl. Normal Bank Policy 2,870.42 - 1,924.96 - Thai Airways International Pcl. Normal Bank Policy 6,500.00 - - 0.37 State Railway of Thailand * Normal Bank Policy - - 18,302.31 13.96 Loxley Public Co., Ltd. Normal Bank Policy 139.82 352.35 100.71 282.42 The Krungthep Thanakom Co., Ltd. Normal Bank Policy 25.57 - - - Chumporn Palm Pcl. Normal Bank Policy 25.00 - - - Crownseal Pcl. Normal Bank Policy 0.06 - - - Siam Future Development Pcl. Normal Bank Policy 45.26 - - - With Common Management Executives Bangkok Mass Transit System Pcl. Normal Bank Policy 4,144.61 14.38 4,198.36 14.38 Bangkok Commercial Asset Management Co., Ltd.* Normal Bank Policy - - 6,995.47 - Sri Siam Paper Pcl. * Normal Bank Policy - - 4,311.12 2.40 The Bangchak Petroleum Pcl. Normal Bank Policy - - 8,242.22 415.92 Thai Rubber Latex Corporation (Thailand) Pcl. Normal Bank Policy 310.29 7.68 336.65 1.35 Bangkok Expressway Pcl. Normal Bank Policy 4,615.48 - 6,284.38 - SFS Aviation Co., Ltd. * Normal Bank Policy - - 944.76 219.54 (Si-Chang Flying Service Co., Ltd.) Internet Thailand Pcl. * Normal Bank Policy - - - 3.74 World Flex Pcl. Normal Bank Policy 92.92 3.33 86.66 4.82 TPT Petrochemical (Thailand) Pcl. Normal Bank Policy 1,910.41 183.70 2,058.63 11.25 [Tuntex Petrochemicals (Thailand) Pcl.] Advance Agro Pcl. Normal Bank Policy 1,197.41 147.31 1,199.71 214.49 Thai Nam Plastic Pcl. Normal Bank Policy - - 87.18 4.02 * No Common Management Executives as at December 31, 2008 3.21.6 Intercompany Trading Transactions Subsidiaries 1) Krung Thai Computer Services Co., Ltd. (KCS) has been designated mainly to provide information technology (IT) services to various work units in the Bank. Services offered consist of introducing IT to the Bank’s business operation and modernizing the existing systems in line with the Bank’s requirement, rendering system control and maintenance, system software development and offering preliminary consultancy service and organizing training in various application of IT and techniques. The Bank incurred service charges on a cost plus method amounting to Baht 2,300.00 million and Baht 2,200.00 million for the years ended December 31, 2008 and 2007, respectively.

176


Since 2003, the GFMIS project Phase 2 has been developed and implemented, on behalf of the Bank, by KCS. The Bank and the Office of GFMIS attached to the Secretariat of the Prime Minister have unanimously signed on the Memorandum of Agreement upon the submission of deliverables and disbursement associated to the investments on the GFMIS project on September 22, 2005. Further, the Bank has signed the hiring contract for the implementation and maintenance with the Office of GFMIS on the same day. 2) The Bank incurred service charges on its subsidiaries (including service charges mentioned in # 1) for the years ended December 31, 2008 and 2007 amounting to Baht 4,152.55 million and Baht 3,558.97 million, respectively at the agree-upon rate. 3) Other Information Intercompany Considerations Intercompany income and expense were based on the rate agreed-upon and the amount specified in the contract, whereas, cost plus system has been applicable to some certain transactions. The consolidated financial statements included the accounts of subsidiaries after eliminating inter-office transactions and balances. Associated Companies 1) For the years ended December 31, 2008 and 2007, the Bank generated premises rental income from associated companies amounting to Baht 1.97 million and Baht 1.18 million at the agree-upon rate. 2) For the years ended December 31, 2008 and 2007, the Bank generated fee income of Baht 132.49 million and Baht 124.11 million at the agree-upon rate under the supportive service contract.

3.22 Overseas Branches

The Bank has operated 7 branches - in Los Angeles, Phnom Penh, Kunming, Vientiane, Singapore, Mumbai and Siem Reap Province Sub-branch and appointed certified accountants to audit their financial statements on annual basis. The assets and liabilities of the overseas branches included in consolidated financial statements (after elimination of inter-branch items) for the years ended December 31, 2008 and 2007, were as follows:

(Million Baht)

The Bank’s Financial Statements December 31, 2008

Assets Ratio to total assets Liabilities Ratio to total liabilities

15,017.07 1.13 14,640.78 1.19

December 31, 2007

11,808.85 0.97 14,542.69 1.30

Included in the net loss of Baht 328.40 million and 260.28 million as at December 31, 2008 and 2007, respectively, were gains from translation of the oversea branches’ financial statements totaling Baht 32.26 million and Baht 32.88 million, respectively. Before the elimination of inter-branch items totaling Baht 338.23 million and Baht 2,712.18 million, the overseas branches’ assets as at December 31, 2008 and 2007 were Baht 15,017.07 million and Baht 14,521.03 million, or 1.13 percent and 1.20 percent, respectively. Overseas branches’ liabilities amounted to Baht 14,979.01 million and Baht 14,542.69 million, or 1.22 percent and 1.30 percent of total liabilities, respectively. Net income for the periods ended December 31, 2008 and 2007, were Baht 119.02 million and Baht 105.44 million, respectively.

177


3.23 Significant Financial Position and Operations classified by Domestic and International Business Segment 3.23.1 Financial Position Classified by Business Segment (Million Baht)

Consolidated Financial Statements December 31, 2007 December 31, 2008

Domestic Business Segment

International Business Segment

Total

Domestic Business Segment

Ann ual Report 2008 Krung Thai Bank Pcl.

Total assets 1,315,696.92 15,017.07 1,330,713.99 1,200,913.19 Interbank and money market items 86,720.66 6,301.86 93,022.52 71,814.98 Loans 1,035,059.31 7,438.63 1,042,497.94 947,466.69 Investments 110,351.91 1,158.97 111,510.88 109,715.27 Deposits 1,061,014.97 2,200.92 1,063,215.89 998,414.84 Interbank and money market items 32,111.70 4,334.89 36,446.59 35,124.30 Borrowings 92,538.63 7,687.63 100,226.26 42,952.98 Contingencies 535,014.24 2,157.81 537,172.05 340,814.48

International Business Segment

14,521.03 4,193.31 7,104.53 409.01 2,256.08 4,476.79 7,428.81 2,145.03

Total

1,215,434.22 76,008.29 954,571.22 110,124.28 1,000,670.92 39,601.09 50,381.79 342,959.51

(Million Baht)

The Bank’s Financial Statements December 31, 2007 December 31, 2008

Domestic Business Segment

International Business Segment

Total

Domestic Business Segment

International Business Segment

Total

Total assets 1,312,505.17 15,017.07 1,327,522.24 1,199,521.30 14,521.03 1,214,042.33 Interbank and money market items 86,630.97 6,301.86 92,932.83 71,783.69 4,193.31 75,977.00 Loans 1,038,647.20 7,438.63 1,046,085.83 950,979.45 7,104.53 958,083.98 Investments 109,869.44 1,158.97 111,028.41 110,592.68 409.01 111,001.69 Deposits 1,061,330.98 2,200.92 1,063,531.90 999,841.68 2,256.08 1,002,097.76 Interbank and money market items 32,131.29 4,334.89 36,466.18 35,154.14 4,476.79 39,630.93 Borrowings 92,538.63 7,687.63 100,226.26 42,952.98 7,428.81 50,381.79 Contingencies 535,014.24 2,157.81 537,172.05 340,814.48 2,145.03 342,959.51

Total assets shown in the Consolidated and the Bank’s Financial Statements as at December 31, 2008 and 2007 were stated before the elimination of net inter-company items of Baht 338.23 million and Baht 2,712.18 million, respectively.

178


3.23.2 Operations Classified by Business Segment (Million Baht)

Consolidated Financial Statements December 31, 2007 December 31, 2008

Domestic Business Segment

International Business Segment

Total

Domestic Business Segment

International Business Segment

Total

Interest and dividend income 65,021.31 1,325.66 66,346.97 65,739.09 1,551.23 67,290.32 Interest expenses (19,524.04) (1,007.10) (20,531.14) (22,035.82) (1,216.19) (23,252.01) Net Interest Income 45,497.27 318.56 45,815.83 43,703.27 335.04 44,038.31 Non-interest income 11,168.01 (9.77) 11,158.24 10,986.65 41.67 11,028.32 Non-interest expense (41,047.40) (189.77) (41,237.17) (47,319.41) (271.27) (47,590.68) Income before Income Tax and Minority Interests 15,617.88 119.02 15,736.90 7,370.51 105.44 7,475.95

(Million Baht)

The Bank’s Financial Statements December 31, 2007 December 31, 2008

Domestic Business Segment

International Business Segment

Total

Domestic Business Segment

International Business Segment

Total

Interest and dividend income 65,085.56 1,325.66 66,411.22 65,974.49 1,551.23 67,525.72 Interest expenses (19,526.22) (1,007.10) (20,533.32) (22,036.76) (1,216.19) (23,252.95) Net Interest Income 45,559.34 318.56 45,877.90 43,937.73 335.04 44,272.77 Non-interest income 9,789.88 (9.77) 9,780.11 9,996.99 41.67 10,038.66 Non-interest expense (40,015.20) (189.77) (40,204.97) (46,927.58) (271.27) (47,198.85) Income before Income Tax and Minority Interests 15,334.02 119.02 15,453.04 7,007.14 105.44 7,112.58

Total interest and dividend income and total interest expense, in the Consolidated and the Bank’s Financial Statements as at December 31, 2008 and 2007 were stated before the adjustment of inter-company items of Baht 897.77 million and Baht 1,113.06 million, respectively. Total interest and dividend income for the years ended December 31, 2008 and 2007 included fee income and other income generated from loan extension amounting to Baht 985.67 and 1,094.29 million, respectively.

179


3.24 Net Foreign Exchange Position

The Bank’s net foreign exchange position (USD equivalent) as at December 31, 2008 and 2007 was as follows:

(Million USD)

Consolidated and the Bank’s Financial Statements December 31, 2007 December 31, 2008

Domestic Business Segment

International Business Segment

Total

Domestic Business Segment

International Business Segment

Total

Spot 1,007.43 1.09 1,008.52 1,477.06 (0.64) 1,476.42 Forward Forward contract (27.52) - (27.52) 413.28 - 413.28 Swap contract 26.64 - 26.64 (1,224.64) - (1,224.64) CCS contract (994.67) - (994.67) (684.80) - (684.80) 11.88 1.09 12.97 (19.10) (0.64) (19.74)

3.25 Disclosure of Financial Instruments

Ann ual Report 2008 Krung Thai Bank Pcl.

Thai Accounting Standards No. 48 regarding “Financial Instruments: Disclosure and Presentation” is used as a reference for disclosing information on the Bank’s financial instruments. The information aims to assist users of the financial statements to assess the Bank’s exposure to risks associated with significant financial instruments. Financial Instruments A financial instrument is any contract that gives rise to both a financial asset of one enterprise and a financial liability or equity instrument of another enterprise. A financial asset is any asset that is: - Cash - A contractual right to receive cash or another financial asset from another enterprise - A contractual right to exchange financial instruments with another enterprise under conditions that are potentially favorable - An equity instrument of another enterprise A financial liability is any liability that is a contractual obligation: - to deliver cash or another financial asset to another enterprise - to exchange financial instruments with another enterprise under conditions that are potentially unfavorable. An equity instrument is any contract that evidences a residual interest in the assets of an enterprise after deducting all of its liabilities. Financial instruments include both: - Primary Instruments such as Receivables, Payables and Equity Securities - Derivative Instruments such as Option Contracts, Futures Contracts, Forward Contracts, Interest Rate Swap Contracts, Currency Swap Contracts and Credit Linked Notes. Derivative Instruments, whether recognized or unrecognized in Balance Sheet, meet the definition of a financial instrument.

180


3.25.1 Interest Rate Risk Interest rate risk in the balance sheet arises from market interest rate volatility and the mismatch in repricing dates of the Bank’s assets and liabilities that may have an adverse effect on the net interest earnings of the Bank. The majority of the Bank’s financial assets earn interest at floating rates such as MOR, MRR and MLR, except for investments in bonds with a fixed interest rate and maturity. The majority of the Bank’s financial liabilities, include those saving deposit in the domestic money market which pay interest at floating rates and 3-month, 6-month and 12-month time deposits which pay at short-term fixed interest rates. Primary information relating to fixed and floating interest rates applicable to loans as at December 31, 2008 and 2007 was as follows:

(Million Baht) Consolidated Financial Statements The Bank’s Financial Statements December 31, 2008 December 31, 2007 December 31, 2008 December 31, 2007

Fixed interest rate 322,507.45 259,340.65 322,507.45 259,340.65 Floating interest rate 790,229.40 745,856.24 793,817.30 749,365.06 Total loans (financial institutions included) 1,112,736.85 1,005,196.89 1,116,324.75 1,008,705.71

3.25.2 Credit Risk Credit risk is defined as the potential that a bank borrower or counterparty will fail to meet its obligations in accordance with agreed terms or due to the deterioration of credit quality which lead the Bank to fail to take full payment finality as agreed-upon in the contract. It also causes an adverse effect over the Bank’s income and capital fund. The carrying amount for each class of financial asset recognized in the balance sheet, net of applicable allowance for doubtful debts (see Note 3.6), represents the Bank’s exposure to credit risk where no material concentration of credit risk. In addition, the Bank incurs risk arising from the potential default on its contractual obligations by the other party towards contingencies which included aval for bills, guarantees for loans, liability under unmatured import bills, letters of credit and other contingencies. The credit exposure on these instruments is represented by the notional amount recorded off-balance sheet. The Bank has set up measures for managing credit risk by laying importance to the followings: 1. Establishing policy and procedure used in credit risk management to ensure the Bank of streamlining practices as well as updating the revision in conformity with the BOT’s risk management supervision policy which included meeting Basel II criterias. 2. Formulating credit policy used as a guideline for the Bank’s credit extension, by conducting the revision and improvement of credit policy to ensure flexible practice to meet international standards and to enhance the Bank’s businesses under risk appetite. 3. Establishing Bank’s policies relative to investments and supervision over the companies invested in order to generate returns in line with risk appetite. 4. Conducting Industry Risk Rating encompassing businesses according to ISIC Code as well as evaluating economic and financial risk impact to the Bank, thus, to make available for the Bank’s management as supplementary data to initiate strategic planning and handling the management of credit extension. 5. Regularly enhancing loan process to standardize credit approval system including to set up related procedures underlying Basel II framework both consumer and commercial loans. Training to Bank’s staff must be put in place to obtain more understanding over related working system as well as to effectively meet the customers’ ultimate needs.

181


Ann ual Report 2008 Krung Thai Bank Pcl.

6. Updating and enhancing credit risk management tools in line with the Bank’s risk management and Basel II guidelines. 7. Regularly establishing and properly reviewing the Bank’s Delegated Lending Authorities (DLA) and Delegated Restructuring Authorities (DRA) to assure the same standard and prudential practices regarding credit approval and debt restructuring. Credit regulations stipulated by the Bank in credit consideration and approval principally require that both DLA and DRA be appointed in form of Committee. 8. Following up and managing the quality of loan by closely monitoring approved lending activities to ensure that the compliance to the Bank’s terms and conditions of loan agreement is met by carrying out the NPLs reduction expedition project. Watch list debtors with weak performance will be corrected and controlled in continuation to prevent such loans become NPLs. Further, debt restructuring coupled with legal proceedings has put in place in case of NPLs debtors. NPLs reduction expedition project will encourage precise debt management in solving NPLs problem. Regular progress reportings will help expediting debt repayment with minimum loss. 9. In assessing the adequacy of provisioning as prescribed by the BOT, the Bank is required to conduct credit examination regarding the correctness and completeness of loan classification and debt-restructuring data base. In addition, collateral data are also taken into account in term of type and value of collateral. Such related data potentially have significant impact on the Bank’s provisioning. 10. Any assets classified as doubtful of loss which provision has been fully made, will be totally written off. In this respect, written-off items will still be continually called for uncollectible amount or taken legal proceedings to the final action as prescribed by the Bank’s regulations. 11. Establishing credit review to ensure compliance with standard operation procedures in relation to credit approval and debt restructuring. In addition, qualitative assessments for loan and other related assets will be useful for debtors’ classification as prescribed by the BOT. 12. Communications are required to ensure the Bank’s resources to have a more risk sensitivity together with realizing the importance of risk control. Development of training related to risk management encompassing credit risk, market risk and operational risk are also essential to enable them to have a better understanding of risk management in line with New Capital Accord or Basel II. 13. Teaming up resources and work unit accountable for preparing ahead for the coming enforcement of Basel II. Besides, the Bank has acquired computer software relative to Capital Fund Calculation from renowned vendor, set up project-team accountable for system development including hired the professional consulting firm offering consultation services as well as strong supporting personnel relative to the system implementation covering the system itself, all related data and working procedures. 14. Self-Assessment of risk in associated with the bank as stipulated by the BOT and preparation of report on such the implication submitted to the Bank’s Board of Directors including set up practical guidelines to mitigate risk and to monitor streamlining performance. 15. Enhancement of information technology system to ensure the completeness and adequacy of information system for risk management and decision making as well as to minimize work redundancy and human error.

182


3.25.3 Interest Earning Financial Assets and Interest-bearing Financial Liabilities The table below represents the Bank’s average outstanding balance of interest income/ expense and average interest rates on interest earning-financial assets and interest-bearing financial liabilities, for the years ended December 31, 2008 and 2007.

(Million Baht)

Consolidated Financial Statements December 31, 2007 December 31, 2008

Average Outstanding Balance

Interest Income/ Expense

Average Rate(%)

Average Outstanding Balance

Interest Income/ Expense

Average Rate

Interest Earning Financial Assets Interbank and money market items and securities purchased under resale agreement 98,608.17 4,138.71 4.20% 118,770.79 6,196.87 5.22% Investments in securities, net 107,895.07 4,790.04 4.44% 121,850.77 5,927.82 4.86% Loans 1,026,851.25 56,520.46 5.50% 923,688.77 54,052.57 5.85% Total 1,233,354.49 65,449.21 5.31% 1,164,310.33 66,177.26 5.68% Interest-bearing Financial Liabilities Deposits 1,058,752.01 15,558.95 1.47% 1,015,113.28 18,478.65 1.82% Interbank and money market items 29,123.68 474.64 1.63% 44,588.45 834.33 1.87% Borrowings 88,844.94 3,599.79 4.05% 54,821.89 2,825.97 5.15% Total 1,176,720.63 19,633.38 1.67% 1,114,523.62 22,138.95 1.99%

(Million Baht)

The Bank’s Financial Statements December 31, 2007 December 31, 2008

Average Outstanding Balance

Interest Income/ Expense

Average Rate(%)

Average Outstanding Balance

Interest Income/ Expense

Average Rate

Interest Earning Financial Assets Interbank and money market items and securities purchased under resale agreement 98,306.38 4,134.16 4.21% 118,696.54 6,019.27 5.07% Investments in securities, net 108,611.19 5,158.38 4.75% 122,966.38 6,175.63 5.02% Loans 1,030,487.66 56,220.91 5.46% 927,281.11 54,217.76 5.85% Total 1,237,405.23 65,513.45 5.29% 1,168,944.03 66,412.66 5.68% Interest-bearing Financial Liabilities Deposits 1,059,761.42 15,560.74 1.47% 1,016,239.66 18,480.66 1.82% Interbank and money market items 29,164.92 475.03 1.63% 44,618.55 833.26 1.87% Borrowings 88,844.94 3,599.79 4.05% 54,808.57 2,825.97 5.16% Total 1,177,771.28 19,635.56 1.67% 1,115,666.78 22,139.89 1.98%

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3.25.4 Maturity Profile of Assets and Liabilities The table below represents the Bank’s maturity profile of on-balance sheet financial assets and financial liabilities as at December 31, 2008 and 2007.

(Million Baht)

December 31, 2008 Less than 1 month

1-3 months

over 3 months up to 1 year over 1 year

No Maturity

Total

Ann ual Report 2008 Krung Thai Bank Pcl.

Financial Assets Interbank and money market items 40,809.18 25,446.91 25,992.07 684.67 - 92,932.83 Securities purchased under resale agreement - - - - - - Investments in securities, net - - 45,404.90 65,623.51 - 111,028.41 Loans 132,722.47 106,992.22 125,849.49 680,521.65 - 1,046,085.83 Total 173,531.65 132,439.13 197,246.46 746,829.83 - 1,250,047.07 Financial Liabilities Deposits 629,370.84 199,538.40 204,563.89 30,058.77 - 1,063,531.90 Interbank and money market items 27,326.29 238.11 8,396.63 505.14 - 36,466.17 Borrowings 21,726.53 10,205.28 10,986.42 57,308.03 - 100,226.26 Total 678,423.66 209,981.79 223,946.94 87,871.94 - 1,200,224.33

(Million Baht)

December 31, 2007 Less than 1 month

1-3 months

over 3 months up to 1 year over 1 year

No Maturity

Total

Financial Assets Interbank and money market items 35,394.11 18,594.38 20,688.78 1,299.73 - 75,977.00 Securities purchased under resale agreement 600.00 - - - - 600.00 Investments in securities, net - - 21,131.73 89,869.96 - 111,001.69 Loans 117,715.64 104,923.90 181,869.63 553,574.81 - 958,083.98 Total 153,709.75 123,518.28 223,690.14 644,744.50 - 1,145,662.67 Financial Liabilities Deposits 576,473.02 185,799.40 179,194.25 60,631.09 - 1,002,097.76 Interbank and money market items 15,537.70 133.25 14,880.31 9,079.67 - 39,630.93 Borrowings 1.17 4,567.28 9,992.53 35,820.81 - 50,381.79 Total 592,011.89 190,499.93 204,067.09 105,531.57 - 1,092,110.48

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3.25.5 Derivatives A derivative is a financial contract whose value is derived from the value of an underlying reference rate, index, or other instrument. Asset and Liability Management The Bank uses derivatives to hedge its market risk arising from its assets and liabilities, which are predominantly related to interest rate and foreign exchange risks. The Bank’s customers are also exposed to market risks and may choose to use derivatives as part of their risk management strategies. The Bank’s general policy is to hedge risks arising from customer positions. The Bank has also pursued a policy to maintain foreign exchange positions stipulated by the Bank of Thailand as in Note 2.12 and to monitor and to alleviate exposures in view of interest rate risk management within a timely manner. Fair Value of Derivatives Fair value represents the amount the Bank expects to pay or receive to exchange or settle a derivative contract. The net fair value may be determined by several generally accepted methods based on the economic characteristics of a derivative and the financial market in which it operates. When a financial instrument with standard terms and conditions is traded in an active and liquid market, its quoted market price provides the best evidence of fair value. A fair value may be obtained from quoted market prices such as interest and foreign exchange rates which are subsequently incorporated into generally accepted discounted cash flow models. Derivative financial instruments as at December 31, 2008 and 2007 were as follows:

(Million Baht) December 31, 2008

Forward exchange contract Foreign exchange swap contract Cross currency swap and interest rate swap Interest rate swap Buy Option Sell Option Structured Deposit/Note Total

Notional Amount Up to 1 year Over 1 year Total 54,280.90 3,071.75 57,352.65 226,872.04 3,859.36 230,731.40 12,663.00 25,627.37 38,290.37 366.20 6,694.37 7,060.57 - - - - - - - 244.00 244.00 294,182.14 39,496.85 333,678.99

Fair Value Assets (Liabilities) 1,006.20 (755.50) 253.17 0.02 - - - 503.89

(Million Baht) December 31, 2007

Forward exchange contract Foreign exchange swap contract Cross currency swap and interest rate swap Interest rate swap Buy Option Sell Option Total

Fair Value Notional Amount Assets Up to 1 year Over 1 year Total (Liabilities) 49,087.30 - 49,087.30 348.56 75,706.73 - 75,706.73 89.94 6,500.00 22,537.57 29,037.57 3,620.67 560.53 9,001.73 9,562.26 89.73 479.71 - 479.71 2.21 479.71 - 479.71 (2.21) 132,813.98 31,539.30 164,353.28 4,148.90

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3.25.6 Fair Value Fair value is the value for which the Bank’s and its subsidiaries’ financial assets and liabilities could be exchanged or settled. Quoted market prices, or present value estimates derived from generally accepted financial models, are used to determine fair value. The table below summarized the outstanding balance of on-balance sheet items and the estimated fair value of financial assets and liabilities as at December 31, 2008 and 2007.

(Million Baht) Consolidated Financial Statements December 31, 2008 Outstanding Fair Value Balance

December 31, 2007 Outstanding Fair Value Balance

Ann ual Report 2008 Krung Thai Bank Pcl.

Financial Assets Cash 34,519.84 34,519.84 21,456.43 21,456.43 Interbank and money market items 93,022.52 93,022.52 76,008.29 76,008.29 Securities purchased under resale agreements - - 600.00 600.00 Investments in securities, net 111,510.88 111,772.54 110,124.28 110,157.04 Loans and accrued interest receivable, net 1,011,748.52 1,011,748.52 922,759.80 922,759.80 Customers’ liabilities under acceptances 5,249.25 5,249.25 7,402.42 7,402.42 Other debtor-SAM 32.57 32.57 32.57 32.57 Other assets 5,819.14 5,819.14 7,672.44 7,672.44 Financial Liabilities Deposits 1,063,215.89 1,063,215.89 1,000,670.93 1,000,670.93 Interbank and money market items 36,446.59 36,446.59 39,601.09 39,601.09 Liabilities payable on demand 3,004.24 3,004.24 3,390.26 3,390.26 Borrowings 100,226.26 99,101.40 50,381.79 49,915.03 Customers’ liabilities under acceptances 5,249.25 5,249.25 7,402.42 7,402.42 Accrued interest payable 4,398.01 4,398.01 4,952.26 4,952.26 Other creditor, net -TAMC 24.49 24.49 25.42 25.42 Other liabilities 5,329.20 5,329.20 5,620.03 5,620.03

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3.25.6 Fair Value (continued)

(Million Baht) The Bank’s Financial Statements December 31, 2008 Outstanding Fair Value Balance

December 31, 2007 Outstanding Fair Value Balance

Financial Assets Cash 34,518.99 34,518.99 21,455.78 21,455.78 Interbank and money market items 92,932.83 92,932.83 75,977.00 75,977.00 Securities purchased under resale agreements - - 600.00 600.00 Investments in securities, net 111,028.41 111,290.07 111,001.69 111,034.45 Loans and accrued interest receivable, net 1,015,525.52 1,015,525.52 926,323.06 926,323.06 Customers’ liabilities under acceptances 5,249.25 5,249.25 7,402.42 7,402.42 Other debtor-SAM 32.57 32.57 32.57 32.57 Other assets 4,974.58 4,974.58 6,711.24 6,711.24 Financial Liabilities Deposits 1,063,531.90 1,063,531.90 1,002,097.76 1,002,097.76 Interbank and money market items 36,466.18 36,466.18 39,630.93 39,630.93 Liabilities payable on demand 3,004.24 3,004.24 3,390.26 3,390.26 Borrowings 100,226.26 99,101.40 50,381.79 49,915.03 Customers’ liabilities under acceptances 5,249.25 5,249.25 7,402.42 7,402.42 Accrued Interest Payable 4,398.07 4,398.07 4,952.26 4,952.26 Other creditor, net -TAMC 24.49 24.49 25.42 25.42 Other liabilities 4,338.66 4,338.66 4,730.81 4,730.81

The significant assumptions made in measuring the fair value of financial assets and financial liabilities are disclosed as follows: The carrying value of cash, interbank and money market items (assets and liabilities), securities purchased under resale agreements, deposits, liabilities payable on demand, customers’ liabilities under acceptances and off-balance sheet items under contingencies, approximate to their fair value. The quoted market values applicable to trading, available-for-sale and held to maturity debt securities determine their fair value. For non-marketable debt securities, fair value is based on the most recent bid yield. Where such prices are not available, a yield curve lately published by Thai BDC is used to determine its fair value. The net carrying amount of general investments approximates their fair value. The carrying value as disclosed in the balance sheet of loans and accrued interest receivable (net of allowance for doubtful accounts fully provided as required by the Bank of Thailand) approximates their fair value. The fair value of borrowings is the carrying value as disclosed in the balance sheet, except for those of Perpetual Tier 1 Securities are stated at fair value calculated by way of Bloomberg and Thai BMA. The fair value of off-balance sheet items as derivatives are stated in Note 3.25.5 whereas the others are reflected by their notional amount.

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3.26 Long-terms Leased Asset Period of time

(Million Baht)

The Bank’s Financial Statements Leasing Amount Land/Premises Equipment

December 31, 2008 December 31, 2007 December 31, 2008 December 31, 2007

Jan. 1 - Dec. 31, 2008 Jan. 1 - Dec. 31, 2009 Jan. 1 - Dec. 31, 2010 Jan. 1 - Dec. 31, 2011 Jan. 1 - Dec. 31, 2012 Jan. 1, 2013 onwards

- 221.46 160.43 75.00 15.69 86.58

142.91 95.85 54.97 16.71 13.79 96.10

- 346.20 327.72 282.96 160.41 72.36

273.82 197.41 178.94 133.81 15.17 -

Ann ual Report 2008 Krung Thai Bank Pcl.

3.27 The Acquisition of Assets and Liabilities 3.27.1 The Acquisition of Assets and Liabilities of Sayam Bank Limited On August 17, 1987, the assets and liabilities of Sayam Bank Limited, (now called Dhipyasin Co., Ltd.) were transferred to the Bank with liabilities exceeding assets by Baht 7,371.60 million. The Bank, therefore, designated Sayam Bank Limited (Dhipyasin Co., Ltd.) as a debtor under non-interest earning accounts receivable. An effect arising on the transfer as such would be guaranteed and borne by the Government. The excess of liabilities over assets outstanding as at December 31, 2008 and 2007 were Baht 335.00 million shown in other Assets. 3.27.2 The Acquisition of Assets and Liabilities of Bangkok Bank of Commerce

Public Company Limited

During the period from October 8, 1998 to December 31, 1998, the Bank acquired certain liabilities (depositors and creditors) and performing assets of Bangkok Bank of Commerce Public Company Limited (BBC) (as now called Bangkok Commerce Pcl.). BBC was recorded as a Bank’s debtor for the difference of Baht 16,580.57 million and was liable to pay interest at the weighted average cost of 3 mth-fixed deposit rate of the previous month, plus 1 percent p.a. on the net debtor amount. The transfer value as such was settled since October 8, 2003. The Bank has yet to be repaid amounting to Baht 966.70 million related to debts borne by the Bangkok Commerce Pcl. as to the notice letter to FIDF dated August 15, 2002. On September 25, 2002 Krung Thai Legal Services Co., Ltd., acting as a fiduciary for the Bank filed a claim with the Receiver against the Bangkok Commerce Pcl., a debtor in Bankruptcy, for which the amount included accrued interest receivable and suspended items amounting to Baht 816.44 million and Baht 139.57 million, respectively. A permission has been passed by the court’s order but the amount of repayment has yet to be considered. Where such claim was not fully met, the Bank would be totally set off by the FIDF. On July 2, 2004, the Bank has raised the issue to the FIDF whether the accrued interest receivable of Baht 816.44 million and other assets of Baht 139.57 million, under Financial Institution Rehabilitation Plan as on August 14, 1998, have been entitled to compensation borne by Ministry of Finance. It has yet to be considered by the Ministry of Finance, as informed to the Bank on December 16, 2004. The meeting between the Bank and the Financial Institutions Development Fund was held on September 25, 2008 regarding the consideration of Compensation in term of interests in associated with impaired-assets sold, allocated to related parties in order to seek collaboration and

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induce the ultimate resolution from the Ministry of Finance (MOF) on the matter as such, expeditiously. The Bank has informed the Fiscal Policy Office on October 6, 2008 to consider the approval of such compensation which still showed no progress. As at December 31, 2008 and 2007, the Bank’s remained outstanding balance of suspense account debtor comprised interest receivable since year 1998 amounting to Baht 816.44 million (included in Accrued Interest Receivable as to Note 3.5) and the difference from the transfer, booked in other assets approximated Baht 139.57 million. (see Note 3.10)

3.28 The Transfer of Non-Performing Loans to Sukhumvit Asset Management Company Limited

On April 18, 2000 the Cabinet approved a plan to manage delinquent problem loans of the Bank through the establishment of the Asset Management Company wholly owned 100 percent by the Financial Institutions Development Fund (FIDF). As at September 21, 2000 the Baht 519,378.17 million and Baht 198,126.15 million of non-performing assets (including those transferred from First Bangkok City Bank Pcl.) and allowance for doubtful accounts, respectively, were transferred to Sukhumvit Asset Management Co., Ltd. (SAM), in accordance with the guidelines issued by the Cabinet on April 18, 2000.

A 5-year promissory note avaled by the FIDF of Baht 321,252.02 million was issued as payment to the Bank. The transferred price can be modified under the terms and conditions specified in the contract. A promissory note issued by SAM, avaled by the FIDF of Baht 108,000.00 million was paid to the Bank on September 21, 2000 to set off the income-reversed allowance and that was subsequently repaid to the FIDF by the same amount. As at December 31, 2005 SAM has already settled such promissory notes including accrued interest receivable. On February 16, 2005, the Bank has suggested that SAM issue a new promissory note with an increase of Baht 5,832.54 million to settle the transfer cost arising from an increase of collateral value. The Bank has also suggested that SAM repay the Baht 4,630.51 million for the Bank’s advances as of June 30, 2005. SAM has issued the P/Ns drawn on September 20, 2005, amounting to Baht 10,000.00 million represented partially the compensation to the Bank for the supplement transfer of NPLs, initially verification to SAM and the settlement of inter-company transactions including those L/G and revolving loans. Settlement of P/Ns as such was completed on September 21, 2005 totaling to Baht 10,000.00 million, consequently, accounting treatments would be less on Other Debtors, net - SAM amounting to Baht 5,524.60 million, less on Prepayment - SAM and other related account amounting to Baht 643.33 million. The residual amount was treated as an allowance for Doubtful Accounts transferred from SAM amounting to Baht 3,832.07 million whereas partially adjusted transfer cost, requested by the Bank, has been under verification by SAM. In 2008, SAM has, in some part, settled with the Bank for the asset transferred and other inter-company accrued items amounting to Baht 821.78 million. It has been all credited to returned of allowance for bad and doubtful accounts amounting to Baht 646.71 million, to unearned service charge included in other assets of Baht 137.61 million, to other unearned items of Baht 24.85 million, to fee received from other services of Baht 2.79 million and to VAT of Baht 9.82 million. As at December 31, 2008 and 2007, the settlement between the Bank and SAM has been accrued and booked in Other Debtors, net - SAM with the outstanding amount of Baht 32.57 million.

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3.29 The Transfer of Non-Performing Loans to Thai Asset Management Corporation (TAMC)

Ann ual Report 2008 Krung Thai Bank Pcl.

TAMC was established under Emergency Decree on Thai Asset Management Corporation B.E. 2544 (2001) with an objective to manage impaired assets of financial institutions by taking transfer of impaired assets of financial institutions as well as any other rights over the property being held as collateral for debt repayments with respect to such impaired assets. Under such decree, financial institutions shall transfer their impaired assets to TAMC as well as any other rights over the property held as collateral under the conditions and within the timeframe specified by TAMC. The transfer price shall be equal to the value of assets held as collateral, with respect to such impaired assets, according to the appraisal criteria specified by the BOT. The Bank shall have the right to request a new appraisal of the collaterals within specified criteria and timeframe. TAMC and the Bank agree to recognize and share profit or loss arising from the management of impaired assets at the end of fifth year and the end of tenth year hence from July 1, 2001. TAMC shall calculate the profit or loss for the transferred impaired-assets of each debtor having completely repaid or only debtors whose assets are disposed in the case of asset transferred for repayment. The calculation as such will base on accumulated asset recoveries on a cash basis up to the date of calculation less transfer cost, other operating expenses incurred by TAMC including all interest paid to the Bank. In the case of generating the profits, the first portion not over 20 percent of profit will be evenly shared between the Bank and TAMC. The second portion of profit thereafter plus the first portion thus not exceeding the difference between the book value of impaired assets and transfer price will be accrued to the Bank. The remaining profit will be accrued to TAMC. In the case of realizing losses, the first portion not over 20 percent of the transfer price will be absorbed solely by the Bank whereas the second portion not over 20 percent will be evenly shared between the Bank and TAMC. The remaining losses will be wholly absorbed by TAMC. Total losses absorbed by the Bank, therefore, will be up to 30 percent of the transfer price. The Bank has been informed the final result of impaired-asset management by the letter No. PHOR THOR SOR. 2115/B.E. 2551 (2008), dated October 10, 2008 from TAMC that as at June 30, 2008 (end of 7th year) as partial transfer amounting to approximately Baht 6,429.82 million. The Bank has absorbed net losses of Baht 1,449.68 million, which served as the preliminary information as to terms and conditions prescribed by TAMC committees. The effective profit/loss from impaired-asset management as such would be calculated at the 10th year-end and recognized upon the acknowledgement of a certain amount. As of December 31, 2008 net impaired assets transferred to TAMC were Baht 18,081.55 million, a decline from year 2007 of Baht 23.68 million. It was the transfer between year 2001-2006. TAMC shall complete a preliminary verification of asset price within 180 days for each transfer. Having confirmed matching asset price, TAMC shall issue non-transferable promissory notes, with 10-year maturity and avaled by the FIDF, to the Bank. TAMC may exercise the right to redeem these promissory notes ahead of maturity. Interest rates will be calculated by using reference weighted average deposit interest rate of the five large scale commercial banks announced by the BOT and will be paid on the last working day of the year. Up to December 31, 2008 and 2007, the Bank has received partial payment with transfer price payable amounting to Baht 12,030.22 million and 13,109.89 million, respectively, comprising 30 P/Ns, included and shown under long-term investments. The Bank has yet to consider the lower of the transfer price to Baht 273.89 million requested by TAMC. For debtors engaged in pledging machinery as collateral amounting to Baht 1,744.48 million, the lower of face value has been adjusted by TAMC whereas the Bank has held up the receiving of such P/N until the resolution regarding transfer cost would be passed. Accrued interest receivable was booked at Baht 175.15 million. The Bank has committed to handle the impaired-assets transferred to TAMC.

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The Bank has been entered into the management of impaired assets transferred to TAMC without consideration according to the Memorandum of Assignment in managing impaired assets dated July 4, 2003. The Bank has been hired to manage the impaired assets transferred from other financial institutions as to the agreement dated August 26, 2003 and September 30, 2003, respectively. The management fee shall be charged on a monthly basis at the rate of 0.75-1 percent calculated on the outstanding balance of book value of debtors as agreed upon. The other 0.5 percent is calculated on the outstanding balance of book value of debtors having repaid through debt restructuring without default for 6 consecutive allotments. Documents and information related to each debtor must be completely prepared and submitted to TAMC Board of Directors seeking approval within 6 months from the signing date. The Bank has satisfied the agreement and generated an income from such management from March 2008 amounting to Baht 5.64 million. In addition, the consideration shall be rendered to the Bank as to the hiring engagement dated November 10, 2003 and July 6, 2004 for the contractual and legislative administration in associated with such impaired assets. The Bank has subsequently generated the Baht 0.11 million from such engagement in December 2008. Provisions that may arise from losses on impaired-assets transferred to TAMC have been estimated at 15 percent upon transfer price. As of December 31, 2008 provisions as such stood at Baht 2,712.23 million shown in Accounting Estimates. (see Note 3.14)

3.30 Government Fiscal Management Information System Project (GFMIS)

On July 3, 2003 the Steering Committees to the GFMIS, chaired by the Prime Minister, has passed the approval to designate the Bank as the service provider to proceed with the system design, interfacing network development and implementation of the GFMIS Phase 1 in line with the government sector’s requirement. The Cabinet has also passed a resolution on July 22, 2003 to approving the Bank to further to GFMIS Phase 2. The Bank has pre-invested the Baht 1,400.00 million on the project. The GFMIS would bring about significant changes in Planning & Budgeting System, Government Cash Position, National Accounting System, E-Payment and Settlement System, Auditing and Evaluation Monitoring System and Analytical Database System. The GFMIS would run on the online-real time basis. The Krung Thai Computer Services Co., Ltd. has been subcontracted on behalf of the Bank. The Bank has signed the system implementation and maintenance service hiring contract dated September 22, 2005 with the Office of GFMIS for 2 years term commencing from October 1, 2004 to September 30, 2006. KCS has been proceeded with the subcontract on behalf of the Bank. The cabinet has passed a resolution on July 4, 2006 approving the Office of GFMIS to extend the hiring contract for another one year (from October 1, 2006 to September 30, 2007) within the budget line of Baht 390.00 million (VAT included). In 2007, the Office of GFMIS also agreed to extend the hiring contract regarding operational system and maintenance services of the GFMIS for another one year from October 1, 2007 to September 30, 2008 within the budget line of Baht 400.00 million (VAT included). For the year ended December 31, 2007 the consideration from such services has been realized amounting to Baht 563.73 million upon payment (deliverable period 4 from April 1, 2006 up to September 30, 2006 and also from October 1, 2006 up to September 30, 2007). The Bank has also incurred expenses according to the contract signed over with KCS amounting to Baht 551.43 million at the relevant period and the Bank has realized the Baht 93.46 million as an income receivable (for the period from October 1, 2007 to December 31, 2007) and accrued expenses of Baht 90.47 million to KCS at the relevant period.

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For the year ended December 31, 2008, the Bank has realized income receivable upon such services from the government amounting to Baht 364.04 million and incurred expenses of

Baht 356.37 million to KCS at the relevant period.

3.31 Events after the Balance Sheet Date The Issuance and Offering Senior Subordinated Notes

Ann ual Report 2008 Krung Thai Bank Pcl.

The Bank has issued and offered for sale Senior Subordinated Notes No. 1/2009, buy booking from February 16-19, 2009 at the total amount not exceeding Baht 21,000.00 million, the maturity fall due in 2019, redeemable ahead of its maturity with a fixed coupon rate of 5 percent per annum during year 1-5 and 6.50 percent per annum during year 6-10. 3.32 Others Loans investigated by the Assets Examination Committee (AEC) included those extended by the Bank to certain debtors approving on December 9, 2003 with the credit line of Baht 9,900.00 million. It has already been drawn down amounting to Baht 8,368.73 million. AEC has passed the issue to the Office of the Attorney General for further action, as such, the filing has been brought to Supreme Court’s Criminal Division who held political positions. As at December 31, 2008, such the drawn amount has been totally accrued including the interest and classified as doubtful of loss debtors. The Bank has fully set aside the allowance for doubtful accounts to satisfy the BOT’s regulation, accordingly. 3.33 Approval of the Financial Statements The Bank’s Board of Executive Directors has approved the presentation of this financial statements on February 19, 2009.

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General Information

Name of Company Registration Number Business Type Head Office

: : : :

Telephone Number Call Center Fax. Website

: : : :

Krung Thai Bank Public Company Limited 0107537000882 (formerly Bor.Mor.Jor.335) Commercial Banking 35 Sukhumvit Road, Klong Toey Nua Subdistrict, Wattana District, Bangkok 10110 +662 255-2222 1551 +662 255-9391-3 www.ktb.co.th

Nature of Business

Krung Thai Bank Pcl. conducts commercial banking business under the license issued by the Ministry of Finance and other related agencies. The Bank operates business under the Commercial Banking Act of Thailand and other directives of the Bank of Thailand, Ministry of Finance and other related agencies.

Brief History and Key Changes

Founded on March 14, 1966 through merger between the Provincial Bank Limited and the Agricultural Bank Limited with the Ministry of Finance as major shareholder, Krung Thai Bank became a large bank of strong financial standing able to protect depositors and render financial services. In August 1987, the Bank received transfer of assets and liabilities from Sayam Bank Limited with excess of liabilities over assets of Baht 7,372 million. Krung Thai Bank set Sayam Bank Limited (renamed as Dhipyasin Co., Ltd.) as its debtor with no interest charged. If such operation had negative impact on the Bank’s position, the official authorities would oversee the matter so that the Bank would not be damaged by their policy. As at December 31, 2007 the liabilities account of Dhipyasin Co., Ltd. was still Baht 335 million higher than assets balance. The Bank was the first state enterprise to list its shares on the Stock Exchange of

Thailand in June 1989 and started trading since August 2, 1989. On March 24,1994 the Bank registered to transform to a public limited company named “Krung Thai Bank Pcl.” or KTB in short, registration number Bor.Mor.Jor. 335 (currently changed to 0107537000882).

Key changes and developments during 1998 - 2007 are summarized herewith:

November 1998 The Bank received the transfer of assets and liabilities of the First City Bank Pcl. with assets equaled liabilities at Baht 284,532 million. If depositors or other creditors transferred posed interest rates or other capital costs higher than what the Bank should pay, Bank of Thailand/Ministry of Finance/FIDF would compensate the difference. Also if such acceptance of transfer of assets and liabilities encumbered the Bank or foregone any benefits that the Bank should have, such authorities would fully compensate the Bank as well. September 2002 The Extraordinary General Meeting No. 1/2545 on September 24, 2002 approved the repurchase of 10,800 million units of warrant for the rights to buy back preferred shares Section A from the Financial Institutions Development Fund (FIDF) at unit price of Baht 0.61 totaling Baht 6,588 million and cancelled such warrant on September 27, 2002 as well as approved the reduction of

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Bank’s registered capital through reduction of 10,800 million preferred shares Section A at Baht 10 per share totaling Baht 108,000 million and finally approved the reduction of the Bank’s capital to reduce the cumulated loss through revaluation of share par value from formerly Baht 10 per share to Baht 5.15 per share. October 2003 As FIDF had the policy to reduce its shareholding in KTB, the Bank thus offered 3,000 million shares held by FIDF to the public during October 9-10, 2003 and received great feedback from investors. As a result, 450 million additional shares were

allocated totaling 3,450 million shares sold. Of this amount, 1,693 million shares were bought by domestic investors - 987 million shares for individual investors and 706 million shares for institutions accounting for 28.6 percent and 20.5 percent of total shares offered respectively while the remaining 1,757 million shares or 50.9 percent were sold to foreign investors at the price of Baht 8.50. After such sale, FIDF still retained its status as major shareholder of the Bank holding 6,306,635,967 shares accounting for 56.4 percent of the total shares sold at that time.

Annua l Report 2008 Krung Thai Bank Pcl.

Bank’s Shares as at December 31, 2008

The Bank’s registered capital amounted to Baht 57,664,098,087.50 classified into Ordinary shares 11,191,412,250 shares at Baht 5.15 per share Preferred shares 5,500,000 shares at Baht 5.15 per share Total 11,196,912,250 shares The Bank’s paid-up capital amounted to Baht 57,604,032,350.00 classified into Ordinary shares 11,179,749,000 shares at Baht 5.15 per share Preferred shares 5,500,000 shares at Baht 5.15 per share Total 11,185,249,000 shares • Ordinary Share Ordinary shares are traded both on domestic and foreign boards - KTB for domestic and KTB-F for foreign board. • Preferred Share Preferred share refers to share invested in full par value whereby the shareholder not only has the right to vote in the general meeting and the right to receive dividend, but also receive a fixed 3 percent per annum of special dividend in preference to ordinary shareholder. Preferred shares are traded on the domestic and foreign boards as well. Symbol used is KTB-P for domestic and KTB-Q for foreign board.

194

• Other Shares

As at December 31, 2008 the Bank had Non-Voting Depositary Receipt (NVDR) amounting to 361,995,524 units whereby the NVDR holder has no voting right in the general meeting except when voting on delisting of reference securities from the stock exchange. The amount of this NVDR is equivalent to 7.20 percent of the Bank’s shares. Investors can check the amount of NVDR on the web site of the Stock Exchange of Thailand at http:// www.set.or.th


• Debt Instruments or Convertible Securities

Issuance Type of Debt Credit Amount Outstanding Period (1) Date Instruments Rating Jun. 2004 Floating Rate Certificates Baa1 by Moody’s USD 150 USD 85.5 5 yrs of Deposit million million Oct. 2004 Subordinated Debenture AA (tha) by Baht 10,000 Baht 10,000 10 yrs Fitch Ratings million million May 2005 Subordinated Debenture AA (tha) by Baht 10,400 Baht 10,400 10 yrs Fitch Ratings million million Mar. 2006 Senior Unsecured AA+ (tha) by Baht 6,000 Baht 6,000 3 yrs Debenture Fitch Ratings million million BBB- by USD 220 USD 220 - Oct. 2006 Hybrid Tier I (2) Fitch Ratings million million Baa3 by Moody’s BB+ by S&P Nov. 2006 Hybrid Tier I A+ (tha) by Baht 1,440 Baht 1,440 - Fitch Ratings million million Aug. 2007 Bill of Exchange - Baht 430 Baht 430 3 yrs million million Aug. 2007 Promissory Note - Baht 500 Baht 500 5 yrs million million Sep. 2007 Promissory Note - Baht 122 Baht 122 3 yrs million million Mar.- May 2008 Bill of Exchange - Baht 13,720 Baht 13,720 2-5 yrs million million Jun. 2008 Subordinated Debenture AA (tha) by Baht 6,879.20 Baht 6,879.20 10 yrs (Fix Rate) Fitch Ratings million million Jun. 2008 Subordinated Debenture AA (tha) by Baht 629.20 Baht 629.20 10 yrs (Floating Rate) Fitch Ratings million million Jun. - Dec. 2008 Bill of Exchange - Baht 78,743 Baht 42,917 within KTB-B/E million million 1 yr

Redemption Date Jun. 2009 Oct. 2014 May 2015 Mar. 2009 First date to redeem is Oct. 2016 First date to redeem is Nov. 2016 Aug. 2010 Aug. 2012 Oct. 2010 Apr.2010- May 2013 Jun. 2018 Jun. 2018 depend on the date of purchase

Note: (1) Credit Rating as at December 31, 2008 (2) Listed on the Stock Exchange of Singapore as secondary market

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• Binding Obligation for Future Share Issuance

The Bank is not obligated to issue share in the future.

Dividend Payment Policy • Payment of Dividend

Annua l Report 2008 Krung Thai Bank Pcl.

The Bank has the policy to pay dividend at the rate of not less than 40 percent of the net income. Consideration will be based on future performance of the Bank, increase in credit extension and provisioning, retained earnings, legal and other provisioning as the Bank deems necessary including the resolution from the Board meeting or shareholders general meeting. For 2007 performance, the Bank paid Baht 0.30 per ordinary share and Baht 0.4545 per preferred share, (54.91 percent of net income) on May 20, 2008. • Payment of Subsidiaries Dividend Dividend payment of subsidiaries depends on each company’s operating performance, retained earnings, legal provisioning and other required provisioning as appropriate for business operation.

Auditor’s Fee Paid 1) Audit fee

The Bank and subsidiaries paid a total of Baht 6,464,782 for the audit fee in the past accounting period. The amount comprised of Baht 5,970,000 for auditing and Baht 494,782 for other expenses.

2) Non-audit fee

The Bank and subsidiaries paid for preparation of special report and report on foreign exchange profit in the past accounting period totaling Baht 400,000 which has to be paid in the future as service is not completed in the past accounting period.

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Other References

• Securities Register Thailand Securities Depository Co., Ltd.

62 Stock Exchange of Thailand Bldg. Ratchadapisek Road, Klong Toey Subdistrict Klong Toey District Bangkok 10110 Telephone +662 229-2800 Fax. +662 359-1259 • Debenture Holder TMB Public Company Limited 2nd Floor, Computer Bldg. 393 Silom Road, Bangrak District Bangkok 10500 Telephone +662 230-5647 Fax. +662 230-6093

• Auditor Office of the Auditor General

Rama VI Road, Sam Sen Nai Subdistrict Phaya Thai District Bangkok 10400 Telephone +662 273-9674-9 ext. 1443 Fax. +662 618-5788

8th Floor, Nana Nua Bldg. 35 Sukhumvit Road, Klong Toey Nua Subdistrict Wattana District Bangkok 10110 Telephone +662 208-3850-59 Fax. +662 256-8028

• Legal Advisors Legal Consultant Department Compliance & Procedures Sector, Risk Management & Compliance Group, Krung Thai Bank Pcl.

Krung Thai Legal Services Co., Ltd. 19th Floor, CTI Tower 191/50-53 Ratchadapisek Road Klong Toey Subdistrict Klong Toey District Bangkok 10110 Telephone +662 261-3739 Fax. +662 261-3748-51


Legal Disputes

Apart from the case mentioned above, the As of the latest accounting period, there is Bank was not informed of any current or future only one case where the Bank was the lawsuits that might have significantly negative defendant with capital of over 5 percent of impact on its financial standing. As for the progress of cases that the Bank shareholders’ equity. Details as follow: The case in the Bangkok south Civil Count: earlier disclosed in which the Bank was civil case No. Black 3129/2546 between Mrs. defendant with capital of less than 5 percent of Kloy Koombang on her personal behalf and in the shareholders’ equity as at the latest her capacity as the administrator of Mr. accounting period, there was 1 case with the Sa-Nga Koombang through Mrs. Nanthana following details: Pinyocheep, assignee as plaintiff and Krung The case in the Bangkok South Civil Court Thai Bank Pcl. as defendant with capital civil case No. Black 4124/2543 between amounting to Baht 5,238,784,360.52 on Markland Real Estate Co., Ltd. Plaintiff and charge of infringement, claim of damage and Krung Thai Bank Pcl. Defendant with capital claim of assets. The case was filed on May 13, amounting to Baht 3,148,430,000 on charge of 2003 and the Court of First Instance issued a breach of reciprocal loan agreement and claim verdict on September 30, 2003: civil case No. of damage. The case was filed on June 2, 2000 Red 8406/2546 to dismiss the charges and and the Court of First Instance issued its verdict the court fee to be non-refundable. The plaintiff on the case No. Red 4551/2547 on June 30, later lodged an appeal and the Court of Appeal 2004 to dismiss the charges and the court fee confirmed the same judgment on July 26, to be non- refundable. The plaintiff later lodged 2004. The plaintiff lodged on appeal to the an appeal to the Court of Appeal on August 27, Supreme Court on December 28, 2004 and the 2003 and the Bank filed back answer on June Bank filed answer back on March 18, 2005. The 28, 2005. This case is currently under the case is currently under the consideration of the consideration of the Court of Appeal and still Supreme Court. This legal case still has no poses no significant implications on the Bank’s business operation. significant effect on the Bank’s business.

197


Companies in which Krung Thai Bank holds 10 percent or more of the total shares issued as at December 31, 2008 Name and Address

Life / Non-Life Insurance

Total Type of Business Shares Issued

No. of Percentage Type of Shares of Share Invested Shareholding

1. Krungthai-AXA Life Insurance Co., Ltd. Life Insurance 135,500,000 67,750,000 50.00 Ordinary

32nd - 33rd Fl., Italthai Tower, 2034/136, 138-143 New Phetchburi Rd., Bang Kapi, Huay Khwang, Bangkok 10320 Tel. +662 723-4000 Fax. +662 723-4032

Annua l Report 2008 Krung Thai Bank Pcl.

2. Krungthai Panich Insurance Co., Ltd. 208 Wireless Rd., Lumpini, Pathumwan, Bangkok 10330 Tel. +662 302-0111, +662 651-5500 Fax. +662 651-5511

3. Dhipaya Insurance Pcl.

63/2 Rama IX Rd., Huay Khwang, Bangkok 10320 Tel. +662 248-0059 Fax. +662 248-7850

Non-life Insurance

11,000,000 4,950,000 45.00 Ordinary

Non-life Insurance

300,000,000 50,880,000 16.96 Ordinary

Hire Purchase / Leasing 4. KTB Leasing Co., Ltd.

4th Fl., SM Tower, 977/3 Phaholyodhin Rd., Sam Sen Nai, Phaya Thai, Bangkok 10400 Tel. +662 299-3860 Fax. +662 279-8610

5. Krung Thai IBJ Leasing Co., Ltd.

18th Fl., Nantawan Bldg., 161 Rajadamri Rd., Lumpini, Pathumwan, Bangkok 10330 Tel. +662 252-9620, +662 651-8120 Fax. +662 254-6119

198

Hire Purchase 10,000,000 9,999,993 100.00 Ordinary and Leasing

Hire Purchase, 10,000,000 4,899,998 49.00 Ordinary Leasing and Factoring


Companies in which Krung Thai Bank holds 10 percent or more of the total shares issued as at December 31, 2008 (continued) Name and Address 6. Krungthai Charoensri Co., Ltd.

(In the process of liquidating) 277/3 Charoensri Complex Bldg., Prachaksinlapakhom Rd., Makkhaeng, Muang Udon Thani, Udon Thani 41000 Tel. +664 224-9216 -20 Fax. +664 234-4143

Securities

7. Krung Thai Asset Management Pcl.

M,G Fl., Q House Sathorn Bldg., 11 South Sathorn Rd., Thung Mahamek, Sathorn, Bangkok 10120 Tel. +662 670-4900 Fax. +662 679-1820

8. KTB Securities Co., Ltd. 16th Fl., The Officecase@ Central World Bldg., 999/9 Rama I Rd., Pathumwan, Bangkok 10330 Tel. +662 264-5888, +662 658-4888 Fax. +662 264-5880

Manufacturing Industry 9. Kiatpapha Co., Ltd.

2 Moo 12, Kingkaew Rd., Racha Thewa, Bang Phli, Samut Prakarn 10540 Tel. +662 750-2478 Fax. +662 312-4482 10. Alphatec Electronics Pcl. 15th Fl., Bangkok City Tower, 179/74-80 South Sathorn Rd., Thung Mahamek, Sathorn, Bangkok 10120

Total Type of Business Shares Issued

No. of Percentage Type of Shares of Share Invested Shareholding

Hire Purchase

1,000,000

350,000

35.00 Ordinary

Asset Management

20,000,000 19,999,994 100.00 Ordinary

Securities Company

86,400,000 43,200,000 50.00 Ordinary

Paints Manufacturing and Distribution

839,000

419,000

49.94 Ordinary

Electronics Components Manufacturing

2,642

806

30.51 Ordinary

199


Companies in which Krung Thai Bank holds 10 percent or more of the total shares issued as at December 31, 2008 (continued) Name and Address 11. Siam Ferro Industry Co., Ltd.

258/21 Soi Wat Chan Nok, Rama 3 Rd., Bang Kholaem, Bangkok 10120 Tel. +662 291-1022

12. K.M.B. International Co., Ltd.

Annua l Report 2008 Krung Thai Bank Pcl.

2nd Fl., Abico Bldg., 401/1 Moo 8, Phaholyodhin Rd., Lumlookka, Pathumtani 12130 Tel. +662 992-5757 Fax. +662 992-5781

Total Type of Business Shares Issued

No. of Percentage Type of Shares of Share Invested Shareholding

Steel Pipe 2,694,900 Manufacturing and Distribution

294,523

10.93 Ordinary

Canned Pineapple 100,000 Manufacturing and Distribution

10,000

10.00 Ordinary

Others

13. Krung Thai General Business Services Co., Ltd. 96/12 Soi Ladprao 106 (Boon-Udom 1), Ladprao Rd., Wang Thong Lang, Bangkok 10310 Tel. +662 935-3719 Fax. +662 935-3708

14. Krung Thai Legal Services Co., Ltd.

19th Fl., CTI Tower, 191/50-53 Ratchadapisek Rd., Klong Toey, Bangkok 10110 Tel. +662 261-3739 ext. 8777 Fax. +662 261-3748-51

General Services 1,400,000

Legal Services

15. Krung Thai Computer Services Co., Ltd. IT Services

2nd - 7th Fl., Sawai Brown Bldg., 22 Soi Sukhumvit 1, Sukhumvit Rd., Klong Toey Nua, Wattana, Bangkok 10110 Tel. +662 655-1921-40 Fax. +662 655-6195

16. Krung Thai Property Development Co., Ltd. 96/12 Building 4, Soi Ladprao 106 (Boon-Udom 1), Wang Thonglang, Bangkok 10310 Tel. +662 791-9920 -23 Fax. +662 791-9833

200

300,000

1,399,990 100.00 Ordinary

299,993

100.00 Ordinary

13,000,000 12,999,994 100.00 Ordinary

Property 17,000,000 16,999,977 100.00 Ordinary Development


Companies in which Krung Thai Bank holds 10 percent or more of the total shares issued as at December 31, 2008 (continued) Name and Address 17. Krungthai Card Pcl.

14th Fl., UBC II Bldg., 591 Sukhumvit Rd., Klong Ton Nua, Wattana, Bangkok 10110 Tel. +662 665-5100 Fax. +662 261-7695

18. WTA (Thailand) Ltd.

313 CP Tower, Silom Rd., Silom, Bangrak, Bangkok 10500 Tel. +662 230-2019 Fax. +662 236-0499

19. Trinity Watthana Pcl.

26th Fl., Bangkok City Tower, 179/111 South Sathorn Rd., Thung Mahamek, Sathorn, Bangkok 10120 Tel. +662 670-9100, +662 343-9888 Fax. +662 286-9050

20. National ITMX Co., Ltd.

17th Fl., GPF Witthayu Tower A, 93/1 Wireless Rd., Lumpini, Pathumwan, Bangkok 10330 Tel. +662 650-6800 Fax. +662 650-6808

21. Manager Media Group Pcl.

98/3-10 Phra-Athit Rd., Chana Songkram, Phra Nakorn, Bangkok 10200 Tel. +662 629-4488 Fax. +662 629-4469

22. M. Grand Hotel Co., Ltd.

1045 Phaholyodhin Rd., Sam Sen Nai, Phaya Thai, Bangkok 10400 Tel. +662 629-2211

Total Type of Business Shares Issued

No. of Percentage Type of Shares of Share Invested Shareholding

Credit Card 257,833,407 123,558,600 47.92 Ordinary Business

Business taken 1,000 over from True Corporation Pcl.

250

25.00 Ordinary

Holding Company 175,552,000 34,125,000 19.44 Ordinary

Interbank Transaction Management

500,000

86,909

17.38 Ordinary

Printing and Publishing

129,354,620 20,814,928 16.09 Ordinary

Hotel

100,000,000 15,000,000 15.00 Ordinary

201


Companies in which Krung Thai Bank holds 10 percent or more of the total shares issued as at December 31, 2008 (continued) Name and Address 23. Thanathep Printing Co., Ltd.

111 Km. 9, Ladprao Rd., Klong Chan, Bang Kapi, Bangkok 10240 Tel. +662 377-5074 Fax. +662 377-6289

Annua l Report 2008 Krung Thai Bank Pcl.

24. Nok Airlines Co., Ltd.

17th Fl., Rajanakarn Bldg., 183 South Sathorn Rd., Yannawa, Sathorn, Bangkok 10120 Tel. +662 627-2000 Fax. +662 286-9830

25. Suvarnabhumi Airport Hotel Co., Ltd. Suvarnabhumi Airport Hotel Bldg., 999 Moo 1, Nongprue, Bangpli, Samut Prakarn 10210 Tel. +662 131-1042-4 Fax. +662 131-1189

Total Shares Type of Business Issued Printing and Publishing

100,000

No. of Percentage Type of Shares of Share Invested Shareholding 10,000

10.00 Ordinary

Airline

50,000,000 5,000,000 10.00 Ordinary

Hotel

10,177,800 1,017,780 10.00 Ordinary

26. Saraburi New Industrial City Co., Ltd. Industrial Estate 25,000,000 2,500,000 10.00 Ordinary 24th Fl., Thai Life Insurance Bldg., 123 Ratchadapisek Rd., Dindang, Bangkok 10400 Tel. +662 247-0247 ext. 2112 Fax. +662 246-9487

202


Executives Directory as at February 2, 2009 President

Mr. Apisak Tantivorawong

Nana Nua Office

Office of the President

Senior Vice President & Manager Mr. Boonrat Tangchivinsatien

Marketing & Corporate Communications Dept.

Executive Vice President - Director Ms. Lawan Baiyoke

Senior Vice President & Manager Ms. Mayurasiri Pongtaranont Senior Vice President & Manager Mr. Panya Prahmnee

Internal Audit Group

First Executive Vice President - Managing Director Ms. Pannipa Apichatabutra

Internal Audit Sector

Senior Vice President - Director Ms. Tiparatana Nillkan

Head Office Audit Dept.

Acting First Vice President & Manager Ms. Tiparatana Nillkan

Corporate Business & Business Center Audit Dept. First Vice President & Manager Ms. Waewduan Charoen

Metropolitan Network Audit Dept. Senior Vice President & Manager Mr. Kijjar Onlamai

Provincial Network Audit Dept.

Acting First Vice President & Manager Mr. Kijjar Onlamai

Metropolitan Network Sector 2

Central Region Network Sector Executive Vice President - Director Ms. Sumalee Suksawang

Eastern Region Network Sector Executive Vice President - Director Mr. Somjit Pongpitakwises

North-Eastern Region Network Sector 1 Senior Vice President - Director Mr. Banphot Photchanasit

North-Eastern Region Network Sector 2 Executive Vice President - Director Mr. Danai Smanot

Northern Region Network Sector 1 Executive Vice President - Director Mr. Prasit Amporn

Northern Region Network Sector 2

Credit Review & Audit Dept.

Executive Vice President - Director Mr. Suwat Nestsawat

Information Technology Audit Dept.

Executive Vice President - Director Mr. Mitree Kor-udom

Senior Vice President & Manager Mr. Phanchoke Ekarohita Senior Vice President & Manager Mr. Saroj Chantawatchai

Network Group

Senior Executive Vice President - Managing Director Ms. Nongnutch Thienpaitoon Executive Vice President Mr. Kanoksak Soontornkitprapai

Metropolitan Network Sector 1 Executive Vice President - Director Mr. Suphat Intustitayakul

Southern Region Network Sector 1

Southern Region Network Sector 2 Executive Vice President - Director Mr. Voravut Tepkulmanon

Business Center Group

Senior Executive Vice President - Managing Director Mr. Wanchai Thanittiraporn

SMEs Strategy Dept.

Acting First Vice President & Manager Ms. Troungchit Limpabandh

203


Metropolitan BC Sector

Financial Planning Sector

Metropolitan BC Dept. 1

Planning & Budgeting Dept.

Executive Vice President - Director Ms. Vannee Chareonthong First Vice President & Manager Mr. Suwat Teerasetthamrong

Metropolitan BC Dept. 2

First Vice President & Manager Mr. Pativate Santavanond

Metropolitan BC Dept. 3

First Vice President & Manager Mr. Paichit Sirithummapun

Northern & North-Eastern Region BC Sector Executive Vice President - Director Mr. Prasit Wasupath

Northern Region BC Dept. 1 Annua l Report 2008 Krung Thai Bank Pcl.

Senior Vice President & Manager Mr. Alongkorn Tasabamroong

Senior Vice President - Director Mr. Viruch Wongnirund First Vice President & Manager Ms. Walairat Lertumpornpisal

Accounting Dept.

Senior Vice President & Manager Mr. Somsak Likitkranchanakul

Cashier Dept.

First Vice President & Manager Ms. Suvapa Kesungkul

Management Information Dept.

Acting First Vice President & Manager Ms. Kanjanee Udomchaiporn

Credit Monitoring & Customer Information Dept. Senior Vice President & Manager Ms. Kulnaree Kettong

Northern Region BC Dept. 2

Treasury & Capital Market Sector

North-Eastern Region BC Dept. 1

Asset & Liabilities Management Dept.

First Vice President & Manager Mr. Songvut Vejaanuruk First Vice President & Manager Mr. Nuttasak Jeansirisomboon

North-Eastern Region BC Dept. 2 Senior Vice President & Manager Mr. Virath Tearakul

Senior Vice President - Director Mr. Tawan Puntawong First Vice President & Manager Mr. Suppawat Wadhanapatee

Wealth Management Dept.

First Vice President & Manager Mr. Chainarong Eursithichai

Treasury Dept.

Central, Eastern & Southern Region BC Sector First Vice President & Manager Executive Vice President - Director Mr. Weidt Nuchjalearn

Central Region BC Dept.

First Vice President & Manager Mr. Suwat Dendomrongkul

Eastern Region BC Dept.

First Vice President & Manager Mr. Vivish Shevakidakarn

Southern Region BC Dept. 1

First Vice President & Manager Mr. Apichard Detpreechar

Southern Region BC Dept. 2

Senior Vice President & Manager Mr. Korakot Rattanapittayaporn

Financial Management Group Senior Executive Vice President - Managing Director Ms. Kittiya Todhanakasem

204

Mr. Panop Svetarundra

Capital Markets Dept.

First Vice President & Manager Mr. Tawatchai Pramualcharoenkij

Equity Investment Dept.

Senior Vice President & Manager Mr. Gridsn Nuengsigkapian

Financial Institutions & Investor Relations Dept. First Vice President & Manager Mr. Kaival Pongnontakul

Overseas Branch Strategy Dept. Senior Vice President & Manager Mr. Somsak Nontaganok

Corporate Banking Group Senior Executive Vice President - Managing Director Ms. Sompis Charoenkiatikul


Senior Vice President - Director Mr. Sutthichai Krairit

Executive Vice President - Director Ms. Sriprabha Pringpong

Corporate Banking Sector 1 Industrial Finance Dept. 1

Senior Vice President & Manager Ms. Yupa Chanaudomsuk

Industrial Finance Dept. 2

First Vice President & Manager Ms. Aungkana Pulsombat

Commercial Finance Dept.

First Vice President & Manager Ms. Boonsri Waitanomsat

Corporate Banking Sector 2

Acting Executive Vice President - Director Ms. Arisara Dharamadhaj

Agricultural Finance Dept.

First Vice President & Manager Ms. Saranya Ramkiattisak

Construction Finance Dept. 1

First Vice President & Manager Mr. Jaruk Saengthong

Construction Finance Dept. 2

First Vice President & Manager Ms. Roengchit Sujarit

Corporate Banking Sector 3

Executive Vice President - Director Ms. Arisara Dharamadhaj

Services Finance Dept.

Senior Vice President & Manager Ms. Duangjai Sunthornkarn

Project Finance Dept. 1

Government Relations Sector Government Relations Dept. 1 First Vice President & Manager Mr. Apichat Jaroenruanglert

Government Relations Dept. 2 First Vice President & Manager Ms. Roongtip Singsuwan

State Enterprise Relations Sector Executive Vice President - Director Mr. Anantapol Punpeng

State Enterprise Relations Dept. Senior Vice President & Manager Mr. Dhanit Laksanaphuk

Government Project Management Dept. First Vice President & Manager Mr. Boonchai Sasiwong

Community Bank

Senior Vice President & Manager Ms. Nisanart Yothasmut

Products & Marketing Management Group

First Executive Vice President - Managing Director Dr. Anuchit Anuchitanukul

Marketing Strategy Dept.

Senior Vice President & Manager Ms. Siriporn Nopwattanapong

Marketing Management Dept.

Senior Vice President & Manager Mr. Werapong Suppasedsak

Acting First Vice President & Manager Ms. Siriporn Nopwattanapong

First Vice President & Manager Ms. Suthini Visessmit

Senior Vice President - Director Ms. Amara Klabprathum

Project Finance Dept. 2

Government & State Enterprise Relations Group Senior Executive Vice President - Managing Director Mr. Preecha Phukham

Government & State Enterprise Strategy Dept. First Vice President & Manager Ms. Wilaiporn Thiranakanat

Products Development Sector Financial & Investment Products Management Dept.

Senior Vice President & Manager Mr. Jakkrit Prasatthai

Consumer & Housing Loan Products Management Dept. Senior Vice President & Manager Mr. Gorgiat Wong-aree

Cash Management Product Dept. First Vice President & Manager Mr. Vachara Kanchanabundhu

205


Electronic Banking Products & Card Management Dept. Acting First Vice President & Manager Ms. Amara Klabprathum

Sales Management Sector

Senior Vice President - Director Mr. Thirin Taothong

Corporate Cash Management Dept. First Vice President & Manager Mr. Boonsun Prasitsumrit

North-Eastern Region BC CRTM Dept. First Vice President & Manager Mr. Prasit Thaisomboon

Central & Eastern Region BC CRTM Dept. First Vice President & Manager Ms. Jaturaporn Uttamo

Southern Region BC CRTM Dept. First Vice President & Manager Mr. Kittisap Muttameta

Corporate CRTM Sector

Consumer Products Sale Management Dept. Senior Vice President - Director Senior Vice President & Manager Mr. Tinnakorn Boonyakalin

Alternative Channel Dept. Annua l Report 2008 Krung Thai Bank Pcl.

First Vice President & Manager Ms. Umaporn Mungklasthieal

Mr. Verasak Prommas

Industrial Business CRTM Dept. Senior Vice President & Manager Ms. Luckana Leelaamornsin

Commercial & Service Business CRTM Dept.

Services & After Sales Sector

Acting First Vice President & Manager Ms. Cheerawat Phanpaisal

Products & Services Implementation Dept.

First Vice President & Manager Mr. Siripong Viriyavibulkij

Customer Relationship Management Dept.

First Vice President & Manager Mr. Boonlert Kethirun

Senior Vice President - Director Mr. Dumrong Kaewprasith First Vice President & Manager Mr. Prapat Noonpukdee First Vice President & Manager Mr. Chutichai Chanakorn

Agricultural Business CRTM Dept.

Construction Business CRTM Dept. Project & Finance Institution Financing CRTM Dept.

Acting First Vice President & Manager Product Knowledge & Internal Marketing Dept. Ms. Rapee Kaewsringam First Vice President & Manager Mr. Sermsak Jettananont Asset & Legal Management Group First Executive Vice President - Managing Director Credit Risk Transaction Mr. Assanee Subvanich

Management Group

First Executive Vice President - Managing Director Mr. Prasert Thiranakanat

Credit Committee Administration Dept. Senior Vice President & Manager Mr. Sakdee Cheablam

Business Center CRTM Sector Senior Vice President - Director Mr. Udomsak Rojviboonchai

Metropolitan BC CRTM Dept.

First Vice President & Manager Mr. Santi Parivisutt

Northern Region BC CRTM Dept.

206

First Vice President & Manager Mr. Paisal Ampeungard

Asset Disposition Sector

Executive Vice President - Director Mr. Chairat Buchitratanakhun

Asset Disposition Management Dept. First Vice President & Manager Mr. Kamthorn Chavanaves

Asset Disposition Administration Dept. First Vice President & Manager Mr. Sujin Nisamaneejarus

Legal Management Sector

Executive Vice President - Director Mr. Somchai Ngowwatana

Special Cases Dept.

First Vice President & Manager Mr. Chinapat Vatayanon


Legal Monitoring Dept. 1

Banking Operation Sector

Legal Monitoring Dept. 2

Branch Support Dept.

Senior Vice President & Manager Mr. Ukrit Thanapatpaiboon First Vice President & Manager Mr. Kasem Swasdee

Executive Vice President - Director Ms. Suwannee Sukhavachana First Vice President & Manager Ms. Natharee Sakriganon

Legal Management & Loan Collection Expedition Dept. Cash Management Dept. First Vice President & Manager First Vice President & Manager Ms. Poungpetch Vongyimyong Mr. Wisun Supasombatolarn

Electronic Channel Support Dept.

First Executive Vice President - Managing Director Mr. Teerapol Pussadet

International Business Operation Sector

Credit Restructuring Group

Credit Restructuring Sector 1 Senior Vice President - Director Mr. Weerachai Supaviratbuncha

Credit Restructuring Dept. 1

Senior Vice President & Manager Ms. Aorratip Vanichkij

Credit Restructuring Dept. 2

Senior Vice President & Manager Mr. Samart Noosuetrong

Credit Restructuring Dept. 3

First Vice President & Manager Mr. Suwat Buranasajja

Credit Restructuring Sector 2 Senior Vice President - Director Ms. Taypee Srisukh

Credit Restructuring Dept. 4

First Vice President & Manager Mr. Choochart Vivatdejakul

Credit Restructuring Dept. 5

Senior Vice President & Manager

Mr. Wisit Treesuvanna

Credit Restructuring Dept. 6

Acting First Vice President & Manager Ms. Nongluk Chantarasombat

Operation Group

First Senior Executive Vice President - Managing Director Dr. Pongsathorn Siriyodhin

Operation Process Development Dept. Senior Vice President & Manager Mr. Thamrongsak Leunanonchai

Senior Vice President & Manager Acting Sub Lt. Pairoj Deeruksa

Executive Vice President - Director Mr. Pichai Kojamitr

International Payment & Settlement Operation Dept.

Acting First Vice President & Manager Ms. Rasmee Uboldejpracharak

Foreign Exchange Business Dept. First Vice President & Manager Acting Lt. Surat Naweera

International Trade Services Dept. First Vice President & Manager Mr. Chainarong Nisamaneewong

Credit Operation Sector

Executive Vice President - Director Mr. Winit Sangaroon

Credit Operation Dept.

First Vice President & Manager Ms. Wirisara Taptimtong

Credit Agreement Operation Dept. First Vice President & Manager Mr. Kittiroj Pakdeevong

Collateral Function Dept.

First Vice President & Manager Mr. Visit Paisanvorajit

Custody & Collateral System Dept. First Vice President & Manager Ms. Rungluk Darunaithorn

Premises & Facilities Management Sector Senior Vice President - Director Mr. Wiwat Engsuwan

Procurement Dept.

First Vice President & Manager Mr. Exkaracha Ruangchainun

207


General Services & Security Dept. First Vice President & Manager Mr. Jintawat Jangsri

Premises & Property Management Dept.

First Executive Vice President - Managing Director Ms. Patcharasiri Kiatkumjai

Human Resources & Corporate Governance Group

Executive Vice President - Director Dr. Wallop Lipiphun

First Vice President & Manager Mr. Tasporn Klincharoen

Senior Executive Vice President - Managing Director Ms. Sumana Vonggapan

Human Resources & Organization Management Sector Executive Vice President - Director Mr. Suthee Tripornchaisak

Human Resources Management Dept.

Annua l Report 2008 Krung Thai Bank Pcl.

Senior Vice President & Manager Ms. Malinee Bodhisundara

Human Resources Development Dept. Senior Vice President & Manager Ms. Penjantra Teanpramuk

Organization Development Dept. Senior Vice President & Manager Mr. Thanee Derojavan

Corporate Governance & Welfare Sector Senior Vice President & Director Mr. Chaianun Siravanichkarn

Corporate Governance Welfare & Discipline Dept. First Vice President & Manager Mr. Adisorn Anutarapong

Risk Management Sector

Market Risk Management Dept. First Vice President & Manager Mr. Chuchird Wannatong

Credit Risk Management Dept.

Senior Vice President & Manager Mr. Poonpat Sripleng

Operation Risk Management Dept. First Vice President & Manager Mr. Chaovalit Thongsukmak

Enterprise Risk Management Dept. First Vice President & Manager Mr. Songpol Tangkijthavorn

Business Research Dept.

Senior Vice President & Manager Ms. Orapin Suthum

Compliance & Procedures Sector Executive Vice President - Director Ms. Wallaya Kaewrungruang

Office of the Board of Directors & Shareholders Senior Vice President & Manager Mr. Suchart Dejittirut

Compliance Dept.

Senior Vice President & Manager Ms. Roongjit Punnahitananda

Procedures & Regulation Dept.

First Vice President & Manager Sen. Lt. Khakkanant Kiratisountorn R.N., M.D.

First Vice President & Manager Mr. Thanawat Pattamuk First Vice President & Manager Mr. Witoon Kantaapa

Senior Vice President & Manager Mr. Phisek Phonakorn

First Vice President & Manager Ms. Dujhathai Somboonitaya

Medical Dept.

Intellectual Capital & Social Responsibility Dept.

208

Risk Management & Compliance Group

Legal Consultant Dept.


Banking Network Domestic Branches : 840 Branches as at January 31, 2009 Working hours: Mon.-Fri. 8.30-16.30 hrs. (except specific branches indicated in the bracket) Branch Name

Telephone

Bangkok (217 Branches)

Fax.

Asok +662 664-1600 -5 +662 260-1365 Asok-Dindaeng Road +662 246-0735 -7 +662 248-0134 Baiyoke Center* +662 251-7237 -8 +662 251-7239 (Mon-Sun 10.30-19.00 hrs.) BAM* +662 236-6223 -4 +662 236-6225 Bang Bon +662 416-0090 -3 +662 416-0094 Bang Chan +662 517-1223 -5 +662 517-1444 Bang Khun Non +662 435-1893 -5 +662 435-8006 Bang Khun Thian +662 416-3015 -6, +662 415-3015 3315 Bang Plad +662 424-3678, 9028 +662 424-9313 Bangkok Airport* +662 535-2468 +662 535-2445 Bangkok Bus Terminal +662 537-9097 -8 +662 537-9075 (Chatuchak)* (Mon-Sun 09.00-18.00 hrs.) Bangkok Bus Terminal +662 894-6015 -6 +662 894-6017 (Thanon Borommaratchachonnani)* (Mon-Sun 10.00-19.00 hrs.) Bangkok Metropolitan +662 226-3879 +662 226-3879 Administration* Bangkok Metropolitan +662 245-5174 -5 +662 245-5176 Administration 2* Banglampu +662 281-6121, +662 281-6120 +662 282-8436 Bangpo +662 585-3562 -3 +662 585-3564 Bangyikhan +662 434-4895, 7157 +662 435-3681 Big C Lum Luk Ka (Klong 5) +662 152-7671 -2 +662 152-7673 (Mon-Sun 11.00-19.00 hrs.) Big C Rungsit Klong 6* +662 577-4150 -1 +662 577-4240 (Mon-Sun 10.30-19.30 hrs.) Big C Sukhaphiban 3 +662 540-4958 -9 +662 540-4960 (Mon-Sun 10.00-19.00 hrs.) Bobae* +662 280-6255 -6 +662 280-6257 (Mon-Sun 8.30-16.30 hrs.) Carrefour Bangpakok +662 428-7713 -4 +662 428-7715 (Mon-Sun 10.30-19.30 hrs.) Carrefour Phetkasem* +662 421-2941 -2 +662 421-2943 (Mon-Sun 10.30-19.30 hrs.) Central Bangna Tower +662 361-0993 -4 +662 361-0995 (Mon-Sun 11.00-19.00 hrs.) Central Ladprao* +662 541-1637 +662 541-1639 (Mon-Sun 11.00-19.00 hrs.) Central Pinklao +662 884-9000 -7 +662 884-9011 (Mon-Fri 8.30-16.30 hrs. Sat-Sun 10.00-17.30 hrs.) Central Plaza Chaengwattana +662 193-8106 -7 +662 193-8108 (Mon-Sun 11.00-19.00 hrs.) Central Power Center +662 718-7641, +662 718-7722 Huamark* 7643 (Mon-Sun 10.30-19.30 hrs.) Central Rama 3* +662 673-7112 +662 673-7113 (Mon-Sun 11.00-20.00 hrs.) Note: * Sub-Branch

Branch Name

Telephone

Fax.

Central World Plaza* +662 646-1062 -3 +662 646-1064 (Mon-Sun 11.00-19.00 hrs.) Century* +662 245-7358 -9 +662 245-7359 (Mon-Sun 11.00-19.00 hrs.) Chaeng Wattana +662 574-4197 -8 +662 574-5778 Chamchuri Square +662 160-5121 -5, +662 160-5129 (Mon-Sun 10.00-19.00 hrs.) 5127 -8 Chan Road +662 213-2233, +662 287-1738 +662 286-2095 -7 Charansanitwongse 13 +662 411-1288 -90 +662 411-4027 Charoen Krung Pracharak +662 291-8041 -2 +662 291-8855 Hospital Charoen Nakhon Road +662 438-9551 -3 +662 438-7600 Chatuchak Market 2 +662 540-7931 -2 +662 540-7933 (Minburi)* (Wed-Sun 11.00-19.00 hrs.) Chokchai 4 Soi 22 +662 530-2571, 3616 +662 530-2572 Communication Authority +662 506-4024 -5 +662 574-2937 of Thailand* Criminal Court* +662 541-2870 -1 +662 541-2872 Dindaeng +662 692-6351 -3, +662 692-6350 6373 -5 Ekamai +662 381-4052 -4, +662 391-2950 +662 390-1921 Esplanade Ratchada +662 354-2058 -9 +662 354-2074 (Mon-Sun 11.00-19.00 hrs.) Exchange Tower* +662 261-5274 +662 260-3047 (Mon-Fri 10.30-20.00 hrs. Sat-Sun 10.30-16.30 hrs.) Exim Building* +662 278-1786 -7 +662 278-1785 Fashion Island* +662 947-5236 -7 +662 947-5238 (Mon-Sun 11.00-19.00 hrs.) Fortune Town* +662 641-1081 +662 641-1083 (Mon-Sun 11.00-19.00 hrs.) Government House* +662 243-6107, +662 280-3682 +662 244-1479, +662 282-6911 Government +662 354-8892 -3 +662 354-8890 Pharmaceutical Organization* Happyland Road +662 375-6058, +662 375-6849 6513, 6653 Hi Mall Bangkrabue* +662 636-9784 -5 +662 636-9782 (Mon-Sun 11.00-19.00 hrs.) Hua Takhe (Lad Krabang) +662 326-6243 -4 +662 326-6243 IT Square Laksi* +662 576-0527- 8 +662 576-0528 (Mon-Sun 11.00-19.00 hrs.) Kao San Road +662 281-1987, 2301, +662 282-8506 (Mon-Fri 9.30-17.30 hrs.) +662 282-8507 -8 King Mongkut’s Institute +662 326-4700 -1 +662 326-4702 of Technology Ladkrabang* Klang Hospital +662 224-9938 -9 +662 224-9921 Krasruang Sueksathikan +662 282-3132, 5457 +662 282-5458

209


Annua l Report 2008 Krung Thai Bank Pcl.

Branch Name

Telephone

Fax.

Krungdeb Co-Operative +662 391-9861 -3 +662 391-9860 Store Ltd. (Ekamai) (Mon-Sun 10.00-19.00 hrs.) Krungkasem +662 223-2431 -2 +662 223-2430 Labour and Social Welfare* +662 247-7763, 8030 +662 247-8072 Lad Krabang Industrial Estate +662 326-0545 -6 +662 326-0547 Ladplakhao 41 +662 570-7020, +662 570-7223 7116 -7 Ladprao 33 +662 511-3316, +662 513-9432 +662 513-9430 Ladprao 71* +662 538-4041, 4102 +662 538-4130 Ladprao 102 +662 530-4092, 4243 +662 530-6252 Ladprao 130/1* +662 731-3123 -4 +662 375-6647 Lak Si +662 522-7690 -1 +662 522-7692 Mahanak +662 225-5611 -4 +662 225-5615 (Mon-Sun 11.00-19.00 hrs.) Mahidol University Salaya +662 441-5497 -8 +662 441-5499 Major Hollywood +662 369-1466 -7 +662 369-1468 Ramkhamhaeng* (Mon-Sun 11.00-19.00 hrs.) Marketing Organization +662 270-0580, +662 270-0794 for Farmers (Chatuchak) 260 -3 Makro Charan Sanitwong +662 411-3657-8 +662 411-3659 (Mon-Sun 10.00-20.00 hrs.) MBK Center* +662 686-3945 -6 +662 686-3947 (Mon-Sun 11.00-19.00 hrs.) Meenburi +662 918-8880 -4 +662 918-8885 Metropolitan Waterworks* +662 503-9474 +662 503-9930 Ministry of Finance* +662 273-9665 -6 +662 273-9955 N Mark Plaza* +662 375-4220 -1 +662 375-6518 (Mon-Sun 11.00-19.00 hrs.) Nananua Office +662 208-4200 -1, +662 256-8425, 4230 -2 8696 Nanglingee Road +662 678-8411 -3 +662 678-8414 National Assembly* +662 243-6107, +662 280-3682 +662 244-1479, +662 282-6911 National Housing Authority +662 374-1450, 1466 +662 374-1670 Nawamin Road +662 375-2844 -6 +662 375-1154 New Phetchaburi Road +662 314-5580 -7 +662 314-5588 Nongchok* +662 548-3241 -2 +662 548-3243 On Nuch +662 322-8932 -4 +662 322-8933 Pakklong Talad +662 226-6350 -2 +662 221-7552 Pathum Wan +662 215-0050 -4 +662 215-7717 Petroleum Authority +662 537-8006 -9 +662 936-2471 Phahonyothin 39 +662 561-1725 -6, 3458, +662 561-1724 +662 562-0217 Phatthanakarn 17 +662 319-3910 -1, 7881 +662 319-7958 Phatthanakarn 65 +662 322-8549 -50 +662 322-8552 Phetkasem 29 +662 458-0778 -9 +662 467-5456 (Phasi Charoen) Phetkasem 39 +662 454-8085 -7 +662 454-8084 Phetkasem 65/1 +662 421-9753 -5 +662 421-0372 (Bangkhaenua) Phetkasem 77/2 +662 444-2783 -5 +662 444-2786 (Nong Khaem)

210

Note: * Sub-Branch

Branch Name

Telephone

Phetkasem 81* +662 487-5760 -1 Phetkasem 84 (Bangkae) +662 454-2100 -1 Ploenchit Metropolitan +662 251-9114 -6 Electricity Port Authority of Thailand* +662 350-2389 -90 Prachaniwet +662 591-1742 Pracharaj Road +662 911-3105 -8 Prachautis Road +662 428-8813 -4 (Toongkru)* Prachautit +662 934-7416, 7418 -20 Pradipat 13 +662 618-4855 -62 Pradipat 16 +662 278-1612 -3 Prakanong +662 391-1961, +662 392-9173 Prannok +662 411-5590 -2 Praram 2 Road +662 468-4959, +662 877-1450 -1 Praram 3 - Soi 7 +662 291-0756 -7 Pratunam +662 252-9472 -3, +662 253-4192 Pratunam Center* +662 250-6326 -7 (Mon-Sun 10.00-18.00 hrs.) Provincial Electricity Authority* +662 591-6314 P.S.Tower (Asoke) +662 258-8128 -31 PTT. Raminthra km.3* +662 522-6156 -7 (Mon-Sun 9.00-18.00 hrs.) Public Communication +662 233-6149 -50 Service Center Bang Rak Q.House Lumpini* +662 343-8828 -9 (Mon-Fri 10.30-18.30 hrs.) Queen Sirikit National +662 229-4235 -9 Convention Center Rachadapisek - Huaikhwang +662 276-0096 -100 Rajadamnoen +662 281-6950 -2 Rajathevi +662 215-8080 -3 Rajawongse +662 222-2171 -8 Rajchawat* +662 241-4204 -6 Rama 4 Road +662 249-3178, 3184, 3316 Rama 9 Soi 13 +662 717-0121 -3 Ramindra Km.2 +662 521-1980 +662 971-6167 -70 Raminthra Km.4 +662 510-6630 -1 Raminthra Km.10 +662 518-1112 -5 Ramkhamhaeng 65 +662 318-6130 -1 (FBT Building)* (Mon-Sun 11.00-19.00 hrs.) Revenue Department* +662 617-2566 -7 Saint Louis Soi 3 +662 212-3379, 5702 Sampeng +662 221-8666 -7 Samyod +662 222-1171 -4 Sanphawut +662 361-1765 -8

Fax. +662 487-5762 +662 454-2102 +662 255-2989 +662 350-2391 +662 591-3947 +662 585-4010 +662 428-8815 +662 934-7417 +662 270-0056 +662 279-6395 +662 390-0150 +662 411-5593 +662 468-6344 +662 291-0758 +662 255-1008 +662 250-6328 +662 591-3141 +662 258-8132 +662 522-6158 +662 233-6151 +662 343-8830 +662 229-4234 +662 276-0101 +662 281-1841 +662 215-8084 +662 222-9881 +662 241-4206 +662 249-3350 +662 717-0125 +662 552-6029 +662 509-0386 +662 517-5375 +662 318-6121 +662 617-2568 +662 212-7981 +662 221-0375 +662 225-9276, +662 226-1372 +662 361-1769


Branch Name

Telephone

Fax.

Saphan Kasatsuek +662 214-4147, 4846, +662 214-1826 +662 215-3127 Saphan Khao +662 282-2463 -4, +662 282-0786 5007 -8 Saphanmai +662 551-0545 -7 +662 521-1300 +662 972-5792 -3 Sathorn Road +662 670-1700 -4 +662 670-1705 Sathupradit +662 295-4921 -3 +662 295-4924 Seri Center +662 746-0907 -9 +662 746-0620 (Mon-Sun 10.00-19.00 hrs.) Sermmit Tower +662 260-2697 -8 +662 260-2698 Si Ayutthaya Road +662 246-7774 -9, +662 246-2855 +662 247-9256 -8 Si Nakarin +662 379-3241-2 +662 379-3243 Si Nakarin Km.9 +662 721-8010 -3 +662 721-8014 Siam Square +662 251-1476, +662 254-8686 +662 252-1479, +662 254-3428 Silom +662 233-2383 -4, +662 237-5920 +662 235-8153 -4 Siyaek Arun Amrin +662 433-0619, +662 433-0620 +662 435-3508, 3510 Siyaek Bankhaek +662 465-7048, +662 466-1989 +662 466-1650 Siyaek Praya Sri +662 221-8570, +662 222-9252 +662 222-2206, 3670 Siyaek Rajawongse +662 221-1193 -4, +662 222-6368 +662 222-2580 Siyaek Saphan Krungthon +662 423-0530 -1 +662 435-0423 Soi Arlee +662 271-2575 -6 +662 271-2579 Sriyan +662 243-3738 -40 +662 243-2863 Srong Prapa* +662 566-4388 +662 566-4472 State Tower* +662 630-5918 -9 +662 630-5917 Suanmali +662 223-7718, 7721, +662 223-7759 7731, 7774, +662 621-6500 Suanplu* +662 286-2626, +662 287-1489 +662 287-1252, 1587 Sukhaphiban 2 +662 375-1653 +662 375-1644 Sukhaphiban 3 Road +662 728-5523 -6 +662 729-5424 Sukhumvit 22* +662 663-7001 -2 +662 663-7002 Sukhumvit 49 +662 258-0624 +662 258-0511 +662 261-6480 -1 Sukhumvit 64 +662 311-4706, 4710, +662 331-6067 6069 Sukhumvit 71 +662 381-2603 -5 +662 381-2602 Sukhumvit 77* +662 333-0440 +662 311-6701 Sukhumvit 93 +662 311-4216, 4514 +662 331-6667 +662 332-5219 -21 Surawongse +662 234-7837 -8 +662 237-6596 Sutthisanwinitchai +662 276-9351 -3 +662 276-9354 Taksin Road +662 438-0023 -4 +662 438-2625 Talad Huai Khwang +662 275- 2306, +662 275-2503 2385, 2554 Talad Noi +662 236-4866 -7 +662 233-8875

Note: * Sub-Branch

Branch Name

Telephone

Fax.

Talad Plu +662 466-2464, 7342, +662 466-7345 +662 472-7019 Talad Wongsakorn* +662 533-3379 +662 533-3243 (Mon-Fri 10.00-18.00 hrs.) Tanam Rajawongse +662 221-1284, +662 225-9708 4624, 8368 Tanon Fuangnakhon +662 221-1832 +662 224-3996 Tanon Kanchana Phisek +662 449-6013 -4 +662 449-6015 (Bangwaek)* Tanon Mahachai +662 222-9444 +662 225-3965 Tao Poon +662 585-1312, 2198 +662 585-8075 Tesco Lotus @ Park +662 399-1520 -1 +662 399-1519 (Sukhumvit 101/1) (Mon-Sun 10.00-19.00 hrs.) Tesco Lotus Bangkae +662 454-9613 -4 +662 454-9645 (Mon-Sun 10.30-19.30 hrs.) Tesco Lotus Pinklao* +662 433-8884-5 +662 433-8886 (Mon-Sun 10.00-20.00 hrs.) Tesco Lotus Si Nakarin +662 759-9267 -8 +662 759-9269 (Mon-Sun 10.00-20.00 hrs.) Tha Tien +662 222-0198 -9 +662 221-8483 Thadindaeng +662 437-2979 +662 437-4491 Thai Airways International* +662 512-2009, +662 512-2154 +662 545-0121 ext. 2069 Thailand Post* +662 573-8748 -9 +662 573-8750 Thanon Kheha Romklao* +662 557-0626, 0643 +662 557-0676 Thanon Ramkhamhaeng 2 +662 316-7493 -4 +662 316-7495 (Bangna-Trad)* Thanon Romklao +662 909-8266 -7 +662 909-8268 (Moo Baan Preecha)* Thanon Suksawat +662 468-6860-1, +662 468-5255 +662 476-3824, 4027 Thanon Watcharaphol* +662 519-8500, 8604 +662 519-8639 Thanonnawamin 161 +662 509-5402 -3 +662 509-4791 (Sahafarms)* (Mon-Sun 10.00-18.00 hrs.) Thapra +662 457-8208 -9, +662 457-2344 +662 868-2330 -1 The Customs Department +662 249-9310 -2 +662 249-9313 The Government Complex +662 143-8966 -8 +662 143-8969 Commemorating Chaengwattana (Building A) The Government Complex +662 143-8961 -4 +662 143-8965 Commemorating Chaengwattana (Building B) The Mall Bangkae* +662 454-9201 -2 +662 454-9203 (Mon-Sun 10.30-20.00 hrs.) The Mall Bangkapi* +662 363-3476 -7 +662 363-3478 (Mon-Sun 10.30-20.00 hrs.) The Mall Thapra* +662 477-7300 -1 +662 477-7307 (Mon-Sun 10.30-20.00 hrs.) The Paseo (Lad Krabang) +662 346-4195 -6 +662 346-4197 (Mon-Sun 10.00-19.00 hrs.) Thewet +662 281-1332, 1570 +662 281-1127 Thonburi-Paktho +662 428-6362 -3 +662 427-6550 Thong Lo +662 381-3508, 3867 +662 381-3868 TOT (Cheang Wattana)* +662 574-9410 +662 574-9412 Tourism Authority of Thailand* +662 250-1504 +662 250-1503 Udomsuk +662 399-1168 -9, 1351 +662 399-1375

211


Branch Name

Telephone

Annua l Report 2008 Krung Thai Bank Pcl.

Union Mall Ladprao +662 511-4330, 4336 (Mon-Sun 11.00-19.00 hrs.) Victory Memorial +662 298-0016 -20 Viphavadi-Rangsit 5 +662 272-2214 -5, 2241 -2, 2484 Vorachak +662 221-4578, +662 223-2311, +662 225-2395 Wannasorn Building* +662 306-0878 -80 (Mon-Sun 11.00-19.00 hrs.) Wisut Kasat Road +662 281-7476, 7483 Wong Sawang +662 913-2347 -9 Wongsawang Town Center* +662 913-9716 -9 (Mon-Sun 10.30-19.30 hrs.) Yan Nawa +662 211-0156, 3300 Yaowaraj +662 222-0131 -45 Yingcharoen Market* +662 521-1494 -5 (Mon-Sun 8.30-18.30 hrs.) Zuellig House +662 235-6292 -3 (Mon-Fri 8.30-19.00 hrs. Sat 8.30-15.30 hrs.)

Fax. +662 511-4295 +662 298-0884 +662 272-2386 +662 221-5878 +662 306-0881 +662 280-1874 +662 913-2346 +662 913-9720 +662 211-9989 +662 225-9275 +662 521-1496 +662 235-6294

Bangkok Vicinity (85 Branches) Nakhon Pathom (15 Branches)

Bang Len +6634 391-032 -3 Big C Nakhonphathom* +6634 251-755 (Mon-Sun 10.00-19.00 hrs.) Kamphaeng Saen +6634 351-434 -6 Nakhon Chaisi +6634 331-113 -6 Nakhon Pathom +6634 250-770 -2 Om Yai +662 420-4980 -1, 5183 Phrapratone +6634 293-052 -3 Phutthamonthon Sai 5* +662 420-8771 -3 Prapatomjedee +6634 254-297 -8 Salaya +662 441-4451 -2 Sam Phran +6634 322-900 -2 Siyaek Sanamchan +6634 254-533 -5 Tesco Lotus Nakhon Chaisri* +6634 339-456 (Mon-Sun 10.00-20.00 hrs.) Tesco Lotus Nakhon Pathom* +6634 259-751 -2 (Mon-Sun 10.00-20.00 hrs.) Tesco Lotus Salaya* +6624 822-130 -1 (Mon-Sun 10.00-20.00 hrs.)

Nonthaburi (22 Branches)

+6634 391-034 +6634 251-780 +6634 351-632 +6634 332-163 +6634 253-956 +662 420-4983 +6634 395-052 +662 420-8773 +6634 254-237 +662 441-4450 +6634 323-155 +6634 254-240 +6634 339-576 +6634 259-753 +6624 822-132

Bang Bua Thong +662 571-7668 -9, +662 571-7667 +662 924-1031 -3 Bang Kruai +662 447-0652 -4 +662 447-1554 Bangkruai Electricity +662 434-8308, +662 433-4663 Generating* +662 436-1590 -1 Center Point (Bang Yai)* +662 594-0507 -9 +662 594-0506 (Mon-Sun 10.00-19.00 hrs.) Central Plaza Rattanathibet* +662 526-0336 -7 +662 526-0338 (Mon-Sun 10.00-19.00 hrs.) Homepro Ratchaphruek +662 422-2449 -50 +662 422-2451 (Mon-Sun 11.00-19.00 hrs.)

212

Note: * Sub-Branch

Branch Name

Telephone

Fax.

Ministry of Commerce* +662 547-5941 -2 +662 547-5943 Ministry of Public Health +662 580-7000 +662 580-9435 Tiwanon* Muang Thong Thani +662 503-4893 -4 +662 503-4899 Ngamwongwan +662 580-1594 +662 589-8855 +662 591-6180 -1 Nonthaburi +662 525-0421, 0447, +662 525-0857 +662 527-1037, 1148 Office of Civil Service +662 525-4727 -8 +662 525-4729 Comission* Pak Kret +662 583-8616 -7, +662 583-8618 +662 584-3157 -8 +662 591-3598 -9, 8363 +662 591-3599 Ratanathibet Software Park Building* +662 584-1319 +662 584-1039 Suan Yai (Tanam Nonthaburi) +662 525-0683, +662 525-1139 0913, 0957 Ta Nam Pakkret* +662 584-0669, +662 584-1258 1032 Talad Klang Bangyai +662 595-0596 +662 595-0719 (Mon-Sun 10.00-18.00 hrs.) Talad Ruamjai +662 503-3927 -8 +662 503-3929 (Muang Thong Thani)* (Mon-Fri 10.30-18.30 hrs.) Tanon Kanchana Phisek +662 443-6682 -3 +662 443-6684 (Bangyai) The Mall Ngamwongwan* +662 550-1226 -7 +662 550-0789 (Mon-Sun 10.30-20.00 hrs.) Tiwanon 3 +662 591-5525 -7, +662 580-2254 8228 -30

Pathum Thani (16 Branches)

Amphoe Sam Khok +662 593-1381 -3 +662 593-1380 Future Park Rangsit +662 567-3607, +662 567-5019 (Mon-Sun 11.00-19.00 hrs.) 4498, 5019 Lat Lum Kaew +662 599-1086 -9 +662 599-1087 (Yak Noppawong) Navanakorn Industrial* +662 529-6333 -5 +662 529-6335 (Mon-Sun 9.30-18.30 hrs.) Pathum Thani +662 581-2245 -6 +662 581-1465 Phithaksanti +662 581-6331 -3 +662 581-4055 (Talad Pathum Thani) Poonsap Market +662 581-4260 -1 +662 581-4362 (Mon-Sun 9.00-19.00 hrs.) Rung Sit +662 567-1001 -5 +662 531-3450 Rungsit-Nakhonnayok Klong 4 +662 990-9939 -42 +662 533-1543 Rungsit-Nakhonnayok Klong 6* +662 577-5827, 5853 +662 577-5933 Rungsit-Nakhonnayok +662 546-1239 -40 +662 546-1241 Klong 10* Talad Simummueng +662 531-5111 -3 +662 531-7245 Talad Tai +662 529-2022, +662 529-4786 4206 -7, 4222 Tesco Lotus Navanakorn* +662 529-2883 -4 +662 529-5172 (Mon-Sun 10.30-19.30 hrs.) Thamasat University +662 564-3377 +662 564-3378 Rangsit Center* Zeer Rangsit* +662 992-6373 -4 +662 992-6375 (Mon-Sun 11.00-19.00 hrs.)


Branch Name Telephone Samut Prakarn (24 Branches)

Fax.

Airport Operating Building* +662 134-1923 +662 134-1925 Bang Bo* +662 708-5503 -4 +662 708 -5505 Bang Kru +662 462-7860 -2 +662 817-8819 Bang Phli +662 316-1935 -6 +662 316-1938 Bang Poo +662 395-0326, +662 395-3048 3047 -9 Big C Bangphli* +662 312-2732 +662 312-2733 (Mon-Sun 10.00-20.00 hrs.) Big C Samutprakan* +662 395-4190 +662 395-4191 (Mon-Sun 10.00-20.00 hrs.) Carrefour Samrong* +662 380-2657 -8 +662 380-2659 (Mon-Sun 10.00-20.00 hrs.) Free Zone Building +662 134-1929 -30 +662 134-1931 Suvarnabhumi Airport* Mueang Mai Bang Phli* +662 315-2284 -5 +662 315-2286 Operation Center +662 134-1920 -1 +662 134-1922 Thai Airways International* Pak Nam +662 387-0704, 2564, +662 387-0705 +662 389-0993 -7 Phra Pradaeng +662 462-5000, 7988, +662 463-3721 +662 463-3722 -3 Public Transportation +662 134-1926 -7 +662 134-1928 Center Suvarnabhumi Airport* Puchao Saming Phrai Road +662 384-2757 -9 +662 394-0955 Samrong +662 384-4974 +662 384-4448 (Mon-Fri 8.30-16.30 hrs. Sat-Sun 10.00-18.00 hrs.) Samut Prakan +662 389-1161 +662 387-1182 Si Nakarin Km.14 +662 385-8167 +662 385-8292 Srisamut Road +662 387-1003, +662 387-1002 +662 389-5970, +662 395-1564 Talad Nhamdaeng +662 385-1205 -6 +662 385-1207 Tepharak +662 394-4750, +662 394-0720 6839 -40 Tesco Lotus Bang Phli* +662 325-1087 +662 325-1088 (Mon-Sun 10.00-20.00 hrs.) Tesco Lotus Bangpoo* +662 710-9067 -8 +662 710-9069 (Mon-Sun 10.00-20.00 hrs.) Thanon Phraeksa* +662 382-6712 -13 +662 382-6714

Samut Sakorn (8 Branches)

Ban Pheo +6634 481-173, +6634 481-364 +6634 850-684 Krathum Baen +6634 471-926 -7, +6634 471-928 +6634 846-713 Krok Krak* +6634 425-184 -5 +6634 425-176 Phetkasem 91(Om Noi) +662 420-5454 -5 +662 420-5456 Pho Chae* +6634 491-481 -2 +6634 491-483 Samut Sakhon +6634 411-186, 788 +6634 421-600 +6634 421-601, +6634 424-795, +6634 425-170, +6634 428-180 Talad Mahachai +6634 810-257 -8 +6634 427-702 (Mon-Fri 8.30-16.30 hrs. Sat-Sun 9.00-15.00 hrs.) Thanon Settakit 1 +6634 448-154 -5 +6634 448-156 Note: * Sub-Branch

Branch Name

Telephone

Fax.

Central Region (82 Branches) Ang Thong (4 Branches)

Ang Thong +6635 611-720 -1 (Mon-Fri 8.30-16.30 hrs. Sat-Sun 9.00-15.00 hrs.) Pa Mok +6635 661-329, 429 Pho Thong +6635 691-352 -3 Wisetchaichan +6635 631-740 -1

Chainat (3 Branches)

+6635 611-665 +6635 661-323 +6635 691-351 +6635 631-742

Chai Nat +6656 412-406 -7 +6656 411-107 (Mon-Fri 8.30-16.30 hrs. Sat-Sun 9.00-1500 hrs.) Hankha +6656 451-099 -101 +6656 451-269 Sankha Buri +6656 481-061 -2 +6656 481-006

Kanchanaburi (8 Branches)

Bophloi +6634 628-492 -4 Kanchanaburi +6634 512-289 -90 Saengchuto Road +6634 511-292 Sai Yok +6634 634-263 Talad Phasuk Kanchanaburi* +6634 515-934 -5 (Mon-Sun 09.00-19.00 hrs.) Tha Maka +6634 543-310, 312, +6634 640-682 Tha Muang +6634 611-441, 1891 Thong Pha Phum +6634 599-065 -6, 537 -8

+6634 628-495 +6634 514-518 +6634 516-768 +6634 634-266 +6634 515-936

Ban Mi +6636 471-239 Khao Phra Ngam +6636 486-615 Khok Samrong +6636 441-239, 723 Lamnarai +6636 461-044, +6636 630-797 -8 Lop Buri +6636 411-204 -5 Phatthananikhom +6636 639-313 -4 Tesco Lotus Lop Buri +6636 446-150 Inn Plaza* (Mon-Sun 10.00-20.00 hrs.) Tesco Lotus Sing Buri* +6636 512-953 -4 (Mon-Sun 10.00-20.00 hrs.) Tha Wung +6636 622-039 Vichayen Road +6636 617-953 -4 Wong Wien Srakaew +6636 413-678, +6636 420-082

+6636 471-360 +6636 486-651 +6636 441-160 +6636 461-043

Lop Buri (11 Branches)

+6634 543-311 +6634 611-890 +6634 599-100

+6636 420-955 +6636 491-506 +6636 446-152 +6636 511-999 +6636 622-040 +6636 618-836 +6636 413-723

Pha Nakorn Si Ayutthaya (11 Branches)

Ayutthaya +6635 211-483 -4 Ayutthayapark Shopping +6635 201-289, 389 Complex (Mon-Sun 10.00-19.00 hrs.) Bang Pa-In +6635 221-025 -7 Big C Ayutthaya* +6635 747-150 -1 (Mon-Sun 10.00-19.00 hrs.) Phachi +6635 311-089 Phak Hai +6635 391-458 -9 Pratunam Phra In +6635 361-334 -6 Rojana +6635 243-289, 389, 489

+6635 241-266 +6635 346-051 +6635 221-028 +6635 747-149

+6635 311-389 +6635 391-457 +6635 362-006 +6635 213-951

213


Branch Name

Sena Talad Hua Raw Tha Rua

Telephone

Fax.

+6635 217-168 -70 +6635 252-365 -6 +6635 341-089

+6635 201-089 +6635 252-368 +6635 341-990

Phetchaburi (4 Branches)

Cha-am +6632 471-600 Phetchaburi +6632 425-501, 516 (Mon-Fri 8.30-16.30 hrs. Sat-Sun 8.30-15.00 hrs.) Phra Nakhonkiri +6632 424-229 Tha Yang +6632 461-551 -3

+6632 471-601 +6632 428-229 +6632 427-099 +6632 461-552

Annua l Report 2008 Krung Thai Bank Pcl.

Prachuap Khiri Khan (8 Branches)

Bang Saphan +6632 692-254 -5 +6632 692-263 Hua Hin +6632 511-307, 812, +6632 511-242 +6632 512-053 Hua Hin Market Village* +6632 526-192 -3 +6632 526-242 (Mon-Sun 11.00-19.00 hrs.) Kui Buri +6632 681-585 +6632 681-546 Prachuap Khiri Khan +6632 551-140, +6632 611-575 (Mon-Fri 8.30-16.30 hrs. +6632 602-366, Sat-Sun 9.00-15.00 hrs.) +6632 611-171, 353, 372 Pran Buri +6632 621-444, 664 +6632 542-366 Talad Chat-Chai (Hua Hin) +6632 513-208 -9 +6632 513-300 (Mon-Fri 10.00-18.00 hrs. Sat 10.00-19.00 hrs.) Tesco Lotus Pranburi +6632 825-803 -4 +6632 825-805 (Mon-Sun 10.00-20.00 hrs.)

Ratchaburi (12 Branches)

Ban Pong +6632 342-988 Big C Ratchaburi* +6632 332-787 -9 (Mon-Sun 11.00-19.00 hrs.) Chom Bung +6632 362-350 -1 Damnoen Saduak +6632 241-500 -2 Kraiphet Road +6632 322-049 Pak Tho +6632 281-479 Pho Tharam +6632 231-075, 926 Ratchaburi +6632 337-146 Ratchaburi City Hall* +6632 325-947 Si Suriyawong +6632 323-394 -5, +6632 326-721 Suan Phung +6632 364-262 -3 Tanon Khatha Thorn +6632 325-948

+6632 211-891 +6632 332-789 +6632 261-300 +6632 254-133 +6632 325-590 +6632 281-480 +6632 231-927 +6632 321-737 +6632 350-006 +6632 323-393 +6632 364-264 +6632 314-262

Samut Songkhram (2 Branches)

Maeklong +6634 716-352 -3 +6634 716-351 (Mon-Fri 8.30-16.30 hrs. Sat-Sun 9.00-15.00 hrs.) Samut Songkhram +6634 711-166, 199 +6634 723-834

Saraburi (9 Branches)

Hin Kong Kaeng Khoi Na Phra Lan

214

Note: * Sub-Branch

+6636 337-412, +6636 379-493 +6636 248-284 -6 +6636 347-192 -3, +6636 351-192 -3

+6636 379-494 +6636 248-287 +6636 351-192

Branch Name

Nong Khae Nong Zang Pakpreaw Sao Hai Sara Buri (Mon-Fri 8.30-16.30 hrs. Thalan

Telephone

Fax.

+6636 326-452, +6636 371-324 +6636 371-374 +6636 399-239 -40 +6636 399-237 +6636 212-507, +6636 222-580 +6636 312-543 +6636 332-036 -7, +6636 391-170, +6636 391-219 218 +6636 222-093 -4 +6636 222-095 Sat-Sun 9.00-15.00 hrs.) +6636 281-427 +6636 281-334

Sing Buri (2 Branches)

In Buri Sing Buri

+6636 581-476 -8 +6636 581-331 +6636 511-004, 115, +6636 511-006 +6636 512-032, 581, +6636 522-717

Suphan Buri (8 Branches)

Dan Chang +6635 509-503 -4 +6635 595-367 Don Chedi +6635 591-301 -3 +6635 591-304 Phraphanvasa Road +6635 523-475 +6635 523-722 (Mon-Fri 8.30-16.30 hrs. Sat-Sun 10.00-16.00 hrs.) Sam Chuk +6635 571-033, 755 +6635 571-022 Song Phi Nong +6635 531-395, 454 +6635 531-453 Suphan Buri +6635 523-042, +6635 523-315 +6635 525-202 -5 Suphanburi Government Centre +6635 535-060 -3 +6635 535-064 U-Thong +6635 551-927 -8 +6635 551-929

Northern Region (130 Branches) Chiang Mai (30 Branches)

Big C Chiang Mai* +6653 246-709 -10 (Mon-Sun 10.00-20.00 hrs.) Big C Hang Dong* +6653 447-809 -10 (Mon-Sun 10.00-20.00 hrs.) Bo Sang +6653 338-289, 389 Central Airport Plaza +6653 279-337 Chiang Mai* (Mon-Sun 10.00-20.00 hrs.) Chaiprakarn +6653 457-002 -3 Changklan Road +6653 272-093 -5 +6653 273-276 Chiang Dao +6653 388-599 -600, +6653 455-237 -9 Chiang Mai +6653 245-250 -1 Chiangmai University* +6653 223-191 Chom Thong +6653 341-351, +6653 826-840 Fang +6653 451-481 -3 Hang Dong +6653 441-097 -8 Huai Kaew Road +6653 225-808 -9 Kad Suan Kaew +6653 223-254, 268 Shopping Center* (Mon-Sun 10.00-20.00 hrs.) Khuang Sing +6653 409-545 Mae Joe +6653 353-431 -3 Mae Rim +6653 297-221, 223, 969, +6653 298-401

+6653 246-791 +6653 447-811 +6653 338-376 +6653 279-676 +6653 457-004 +6653 818-368 +6653 455-147 +6653 248-868 +6653 223-172 +6653 341-350 +6653 452-006 +6653 441-096 +6653 225-810 +6653 225-807 +6653 409-548 +6653 353-430 +6653 297-222


Branch Name

Telephone

Fax.

Night Bazaar Chiang Mai* +6653 280-667 -9 +6653 282-782 (Mon-Fri 10.00-18.00 hrs.) Nim City Daily (Chiang Mai)* +6653 280-670 -1 +6653 280-672 (Mon-Fri 10.00-18.00 hrs.) Phra Sing +6653 283-270 +6653 283-269 San Pa Khoi +6653 241-110, 854, +6653 245-405 +6653 243-188 Sanpatong +6653 311-519 -21 +6653 311-503 Siyaek Nong Hoy +6653 800-475 -6, 478 +6653 800-477 Siyaek Sanambin Chiang Mai +6653 280-965 -7 +6653 280-968 Sri Nakorn Pink +6653 234-395, 890, +6653 251-724 +6653 251-044 -6 Sun Kumphaeng +6653 331-993 +6653 331-994 +6653 332-311, 628 Suthep Road +6653 278-084, 087 +6653 278-871 Tesco Lotus Chiang Mai +6653 280-610 -1 +6653 280-612 Hang Dong* (Mon-Sun 10.00-20.00 hrs.) Tesco Lotus Mae Tang* +6653 471-292 -3 +6653 471-294 (Mon-Sun 10.00-20.00 hrs.) Tha Pae +6653 252-801 -5 +6653 232-537

Chiang Rai (10 Branches)

Big C Chiangrai* +6653 717-641 -2 +6653 717-789 (Mon-Sun 10.00-20.00 hrs.) Chiang Khong +6653 791-665 +6653 791-772 Chiang Rai +6653 744-282 -3 +6653 711-700 Chiang Saen +6653 650-696 -7 +6653 650-698 Hayaek Phokhun Mengrai +6653 717-740 -3 +6653 719-147 Mae Chan +6653 771-940 -2 +6653 771-939 Mae Sai +6653 731-624 -5 +6653 731-831 (Mon-Fri 8.30-16.30 hrs. Sat-Sun 10.00-18.30 hrs.) Phan +6653 721-370 -1 +6653 721-622 Talad Ban Du (Chiang Rai) +6653 175-680 -1 +6653 175-682 (Mon-Sun 8.30-18.30 hrs.) Talad Pa Kor (Chiang Rai) +6653 600-230 -1 +6653 600-232 (Mon-Sun 9.00-19.00 hrs.)

Kamphaeng Phet (6 Branches)

Chakangrao +6655 711-003 (Mon-Fri 8.30-16.30 hrs. Sat-Sun 9.00-15.00 hrs.) Kamphaeng Phet +6655 711-007, 117 Khanu Woralaksaburi +6655 725-024 Klong Khlung +6655 781-114 -6 Lan Krabu +6655 769-117 -9 Salokbat +6655 771-100, 200, 300

Lampang (8 Branches)

Kalangnakorn Lam Pang Mae Mo Mae Tha Pratuchai

+6654 230-193 -5 +6654 221-649, +6654 225-074 +6654 266-004, 176 +6654 289-155 +6654 223-638, +6654 225-050

Note: * Sub-Branch

+6655 714-024 +6655 713-567 +6655 779-014 +6655 781-113 +6655 769-174 +6655 771-491

+6654 230-192 +6654 225-748 +6654 266-005 +6654 289-154 +6654 225-051

Branch Name

Telephone

Fax.

Tesco Lotus Lampang* +6654 230-443 -4 +6654 230-445 (Mon-Sun 10.00-20.00 hrs.) Thoen +6654 291-111, 333 +6654 291-555 Wang Nua +6654 279-118 -9 +6654 279-117

Lamphun (6 Branches)

Ban Hong +6653 591-111, 311 +6653 591-211 Big C Lamphun* +6653 582-810 -1 +6653 582-812 (Mon-Sun 10.00-20.00 hrs.) Lamphun +6653 511-109, +6653 511-189 +6653 512-110 Lumphun Industrial Estate* +6653 581-442 +6653 581-443 Mae Thar +6653 574-322 -5 +6653 574-821 Tesco Lotus Pasang* +6653 521-302 -3 +6653 521-332 (Mon-Sun 10.00-20.00 hrs.)

Mae Hong Son (4 Branches)

Khun Yuam +6653 691-043 Mae Hong Son +6653 612-049 (Mon-Fri 8.30-16.30 hrs. Sat-Sun 9.00-15.00 hrs.) Mae Sariang +6653 681-111, 482 Pai +6653 699-028 -9

Nakorn Sawan (13 Branches)

+6653 691-033 +6653 612-219 +6653 681-222 +6653 699-030

Banphot Phisai +6656 279-034, 068 Chumsaeng +6656 282-103, 229 Fairy Land (Nakhonsawn)* +6656 372-122 -3 (Mon-Sun 10.00-20.00 hrs.) Lat Yao +6656 271-267, 618 Matuli Road +6656 229-904, 935 Nakhon Sawan +6656 216-281 -3 Pak Nam Pho +6656 227-597, 643 Phayuha Khiri +6656 341-502 PTT.Khaothong +6656 247-373 -4 (Nakhonsawan) Sawanviti Road +6656 221-628, 776 Tak Fa +6656 241-074, 178 Takhli +6656 261-557 V - Square (Big C) +6656 372-116 -7 Nakorn Sawan* (Mon-Sun 10.00-20.00 hrs.)

+6656 279-227 +6656 282-218 +6656 372-123

Nan +6654 772-543 -4, +6654 774-089 Nara Hypermart* +6654 773-163, (Mon-Sun 10.00-20.00 hrs.) +6654 775-134

+6654 710-209

Nan (2 Branches)

+6656 271-328 +6656 229-853 +6656 216-284 +6656 221-706 +6656 341-455 +6656 247-375 +6656 226-790 +6656 241-177 +6656 262-500 +6656 372-118

+6654 740-056

Phayao (5 Branches)

Chiang Kham +6654 451-800, 965, +6654 451-675 +6654 452-096 Dok Kham Tai +6654 491-478 -9 +6654 491-476 Phayao +6654 431-032, 801 +6654 431-802 (Mon-Fri 8.30-16.30 hrs. Sat-Sun 10.00-18.30 hrs.) Pong +6654 497-038 +6654 497-035 Tesco Lotus Chiang Kham +6654 454-226 -7 - (Mon-Sun 10.00-20.00 hrs.)

215


Branch Name Telephone Phetchabun (8 Branches)

Big C Phetchabun +6656 725-548 -9 (Mon-Sun 10.00-20.00 hrs.) Bueng Samphan +6656 732-503 -5 Chon Daen +6656 761-276 -7 Lom Sak +6656 701-029 Nong Phai +6656 781-886 -8 Phetchabun +6656 711-167, 344, 388 Phetcharoen Road +6656 711-644 -5 Tesco Lotus Phetchabun* +6656 711-841 -2 (Mon-Sun 10.00-20.00 hrs.) Wichian Buri +6656 791-316

Annua l Report 2008 Krung Thai Bank Pcl.

Phichit (7 Branches)

Bang Mun Nak +6656 631-177, 202 -3, 830, 977 Phichit +6656 611-376 (Mon-Fri 8.30-16.30 hrs. Sat-Sun 9.00-15.00 hrs.) Pho Thale +6656 681-022 Rajkasemutit +6656 651-393 -5 Sak Leg +6656 699-128 -9 Taphan Hin +6656 621-159, 179 Thap Klo +6656 641-317, 334

Phitsanulok (9 Branches)

Bang Rakam +6655 371-228 -9 Hayaek Khokmatoom +6655 245-457 -8 Nakhon Thai +6655 389-297 Naresuan University* +6655 227-093 -4 (Mon-Fri 9.00-17.00 hrs.) Phitsanulok +6655 230-371 -5 Phrom Phiram +6655 369-111 Singhawat Road +6655 230-721 -4 Topland Phitsanulok* +6655 247-444, 755 (Mon-Sun 10.00-20.00 hrs.) Wang Thong +6655 311-314

Phrae (3 Branches)

Fax. +6656 725-460 +6656 732-505 +6656 761-276 +6656 701-676 +6656 781-884 +6656 711-168 +6656 711-646 +6656 711-843 +6656 791-318 +6656 631-414 +6656 611-396 +6656 681-024 +6656 651-396 +6656 699-130 +6656 621-959 +6656 641-307 +6655 371-148 +6655 302-011 +6655 389-090 +6655 227-445 +6655 242-112 +6655 369-112 +6655 230-723 +6655 247-833 +6655 311-231

Big C Phrae* +6654 532-183 -4 (Mon-Sun 10.00-20.00 hrs.) Long +6654 581-666 Phrae +6654 511-630

+6654 532-185

Big C Sukhothai +6655 616-018 -9 (Mon-Sun 10.00-20.00 hrs.) Kong Krailat +6655 691-132 -3 Sawankhalok +6655 641-060, 422 Si Nakhon +6655 652-636, 638 Si Samrong +6655 681-366 Sukhothai +6655 611-298, 383 (Mon-Fri 8.30-16.30 Sat-Sun 9.00-15.00 hrs.)

+6655 616-020

Sukhothai (6 Branches)

216

Note: * Sub-Branch

+6654 581-456 +6654 522-928

+6655 691-131 +6655 641-539 +6655 652-637 +6655 681-320 +6655 612-921

Branch Name Tak (4 Branches)

Telephone

Mae Sot +6655 531-006, 193, 600 Rim Ping* +6655 511-963 -4 (Mon-Fri 8.30-16.30 hrs. Sat-Sun 9.00-15.00 hrs.) Tak +6655 511-423 Talad Phacharoen Maesot* +6655 536-120 -1 (Mon-Fri 8.30-16.30 hrs. Sat-Sun 9.00-15.00 hrs.) Uthai Thani (2 Branches) Sawang Arom +6656 544-126 Uthai Thani +6656 511-330 (Mon-Fri 8.30-16.30 hrs. Sat-Sun 9.00-15.00 hrs.)

Fax. +6655 531-436 +6655 511-965 +6655 511-597 +6655 361-116

+6656 544-127 +6656 512-400

Uttaradit (6 Branches)

Nam Pat +6655 481-011 -2, 229 +6655 481-081 Phichai +6655 421-002 +6655 421-001 Si Utra Road +6655 413-860 +6655 414-692 Tesco Lotus Uttaradit* +6655 413-853, 863 +6655 413-783 (Mon-Sun 10.00-20.00 hrs.) Tron +6655 491-013 +6655 491-014 Uttaradit +6655 411-225 +6655 411-477

Northeastern Region (133 Branches) Amnat Charoen (1 Branch)

Amnat Charoen +6645 511-784 -9 +6645 511-785 (Mon-Fri 8.30-16.30 hrs. Sat-Sun 9.00-15.00 hrs.) Buri Ram (10 Branches) Big C Buri Ram* +6644 690-186 -7 +6644 690-249 (Mon-Sun 10.00-19.00 hrs.) Buri Ram +6644 611-520 +6644 613-434 +6644 613-558 -9 Krasang +6644 691-020 -1 +6644 691-382 Kumueng +6644 699-121 +6644 699-123 Lam Plaimat +6644 661-209 +6644 623-121 Nangrong +6644 632-105 -7 +6644 632-104 Phutthaisong +6644 689-201 -3 +6644 689-201 Prakhon Chai +6644 671-117, 434 +6644 671-391 Satuk +6644 627-415 +6644 681-282 Thani Road +6644 611-560 +6644 614-306

Chaiyaphum (6 Branches)

Bantant +6644 887-109 +6644 887-132 Bumnet Narong +6644 859-221 -2 +6644 859-223 Chaiyaphum +6644 821-321 -4 +6644 821-578 Haruethai Road* +6644 821-799 -800 +6644 811-325 (Mon-Fri 8.30-16.30 hrs. Sat-Sun 9.00-15.00 hrs.) Nong Bua Rawe +6644 897-225 -6 +6644 897-112 Pu Keaw +6644 861-277, 363 -5 +6644 861-411

Kalasin (4 Branches)

Kalasin +6643 811-731 Kalasin Plaza +6643 815-683 -4 (Mon-Sun 10.00-19.00 hrs.)

+6643 812-232 +6643 815-684


Branch Name

Kuchinarai Nong Kung Si

Telephone

Fax.

+6643 851-312, 314 +6643 851-052 +6643 881-123 -4 +6643 881-222

Khon Kaen (14 Branches)

Ban Phai +6643 272-116, 776 Big C Khon Kaen* +6643 226-012 -3 (Mon-Sun 10.00-20.00 hrs.) Chum Phae +6643 311-119, +6643 312-017, 252, 809, 908 Khon Kaen +6643 246-837 -40 Khonkaen University +6643 244-461 Klangmuang Road +6643 321-647 -8 Kranuan +6643 251-700 -2 Maliwan Road +6643 241-605 -6 Muang Phon +6643 414-273 -4 Nong Rua +6643 294-013 -4, 117, 119 Pratumuang +6643 271-135 -7 Si Chan +6643 245-634, +6643 246-604 Tesco Lotus Khon Kaen* +6643 472-506 -7 (Mon-Sun 10.00-20.00 hrs.) Ubol Ratana +6643 446-001 -4

+6643 272-886 +6643 226-014 +6643 311-139 +6643 246-838 +6643 247-044 +6643 321-649 +6643 252-013 +6643 241-607 +6643 414-275 +6643 294-118 +6643 222-966 +6643 241-865 +6643 472-508 +6643 446-005

Loei (3 Branches)

Dan Sai +6642 891-273, 275 +6642 891-274 Loei +6642 812-650 -1 +6642 811-728 Tanon Ouaaree* +6642 811-940 -1 +6642 811-942 (Mon-Sun 8.30-16.30 hrs.)

Maha Sarakham (7 Branches)

Big C Maha Sarakham +6643 995-636 -7 (Mon-Sun 10.00-19.00 hrs.) Borabu +6643 771-452 Hayaek Mahasarakham +6643 721-125 University* Kosum Phisai +6643 761-846 Maha Sarakham +6643 711-048 Phayakkaphumphisai +6643 791-401 -2 Sermthai Plaza* +6643 723-070 (Mon-Sun 10.00-19.00 hrs.)

Mukdahan (4 Branches)

+6643 995-638 +6643 771-113 +6643 721-625 +6643 761-844 +6643 721-512 +6643 791-112 +6643 723-061

Khamcha-i +6642 691-144 Mukdahan +6642 611-507, 509, +6642 633-420 Mukdahan City Hall* +6642 614-923 (Mon-Sun 10.00-19.00 hrs.) Nikhom Kham Soi +6642 638-312

+6642 614-980

Nakae Nakhon Phanom Ranu Nakhon

+6642 571-323 +6642 511-571 +6642 579-124

Nakhon Phanom (4 Branches)

+6642 571-121 -3 +6642 513-993 +6642 579-125 -7

Note: * Sub-Branch

+6642 691-188 +6642 611-508

+6642 681-075

Branch Name

Telephone

Tesco Lotus That Phanom* +6642 540-250 -1 (Mon-Sun 10.00-20.00 hrs.)

Fax. +6642 540-268

Nakhon Ratchasima (18 Branches) Ampawan* +6644 352-589 +6644 352-590 Bua Yai +6644 461-030 -1 +6644 461-120 Chok Chai +6644 491-701 -3 +6644 491-704 Dan Khun Thot +6644 389-428 -9, 492 +6644 389-258 Jua Hua +6644 371-035, 405 +6644 371-158 Klang Dong +6644 361-686 -7 +6644 361-688 Maharat Hospital +6644 243-300 +6644 241-328 Nakornratchasima Mitraphap Road +6644 255-368 +6644 259-067 (Mon-Fri 8.30-18.00 hrs. +6644 257-470 -3 Sat-Sun 10.00-18.00 hrs.) Nakhon Ratchasima +6644 254-918 -9 +6644 257-432 Nakhon Ratchasima City Hall* +6644 258-865 -6 +6644 258-868 Pak Chong +6644 311-095, 143 +6644 311-401 Pak Thong Chai +6644 441-090, 245 +6644 441-244 Phoklang Road +6644 244-194, 222, +6644 244-154 +6644 253-710 Pra Thai +6644 479-464 -5 +6644 479-467 Samyaek Pakthongchai +6644 222-122 -4 +6644 222-125 Si Khiu +6644 411-666 +6644 411-600 The Mall Nakornratchasima* +6644 245-432 +6644 245-444 (Mon-Fri 10.30-19.30 hrs. Sat-Sun 10.00-19.00 hrs.) Wang Num Khieo +6644 228-035 -7 +6644 228-038 Nong Bua Lumphu (1 Branch)

Nong Bua Lumphu +6642 312-027 -9 +6642 312-026 (Mon-Fri 8.30-16.30 hrs. Sat-Sun 11.00-16.30 hrs.)

Nong Khai (8 Branches)

Bigjieng Nongkhai* +6642 413-927 -9 (Mon-Sun 10.00-20.00 hrs.) Bung Kan +6642 491-756 -8 Nong Khai +6642 420-065 -7 Seka +6642 489-089, 097 Si Chiang Mai +6642 451-541, 641 Tesco Lotus Thabo* +6642 432-115, 155 (Mon-Sun 10.00-20.00 hrs.) Tha Bo +6642 431-793 -4 Thasadej +6642 460-024 -7

Roi Et (7 Branches)

Bung Planchai +6643 520-489 -90 Nong Phok +6643 579-179, 230 Roi Et +6643 511-153 Selaphum +6643 551-251 -2 Suwannaphum +6643 581-252 -3 Talad Haisok +6643 522-168 -9 Tesco Lotus Roi Et* +6643 519-536, 576 (Mon-Sun 10.00-19.00 hrs.)

+6642 413-926 +6642 491-760 +6642 420-068 +6642 489-098 +6642 451-741 +6642 432-047 +6642 431-796 +6642 460-028 +6643 520-491 +6643 579-099 +6643 511-992 +6643 551-252 +6643 581-011 +6643 513-333 +6643 519-741

217


Branch Name Telephone Sakon Nakhon (6 Branches)

Fax.

Akat Amnuai +6642 798-123, +6642 799-251 +6642 799-252 Charoenmuang +6642 715-089 +6642 713-391 Nevada Multiplex +6642 716-850 -1 +6642 716-852 Sakonnakhon* (Mon-Sun 11.00-20.00 hrs.) Phang Khon +6642 771-030, 122 -3 +6642 771-417 Sakon Nakhon +6642 711-024, 231 +6642 712-938 Sawang Daen Din +6642 721-680 -1 +6642 721-033

Si Sa Ket (6 Branches)

Kantharalak +6645 661-245 -6 Khun Han +6645 679-042 -3 Si Sa Ket +6645 611-115, 558, (Mon-Sun 8.30-16.30 hrs.) +6645 612-508, 537 Tepha Road* +6645 622-871 -2 Tesco Lotus Khukhan* +6645 671-551 -2 (Mon-Sun 9.00-19.00 hrs.) Uthumphon Phisai +6645 691-199 Annua l Report 2008 Krung Thai Bank Pcl.

Surin (6 Branches)

Chom Phra +6644 581-188 -9 Lukmuang Road +6644 519-416 -9 Prasat +6644 551-308 Si Khoraphum +6644 561-323 -4 Surin +6644 511-021 +6644 514-567 -8 Surin Plaza* +6644 714-005 -6 (Mon-Sun 10.00-19.00 hrs.)

Ubon Ratchathani (16 Branches)

Aupparaj Road* +6645 240-381 -2 Big C Warin Chamrap +6645 854-080 -1 (Mon-Sun 10.00-19.00 hrs.) Buntharik +6645 376-005 -7 Chayangkul Road +6645 280-157 -9, +6645 313-304 -5 Det Udom +6645 282-457, +6645 361-058 -9 Khong Chiam +6645 351-124 -5 Sappasit Road +6645 240-099, +6645 244-848 -9 Siyaek Kilosoon +6645 244-790 -4 Talad Big C Ubon +6645 317-944, 955 Ratchathani* (Mon-Sun 10.00-19.00 hrs.) Tesco Lotus Det Udom* +6645 362-721 (Mon-Sun 10.00-19.00 hrs.) Tesco Lotus Piboonmangsahan* +6645 441-797, 676 (Mon-Sun 10.00-20.00 hrs.) Ubon Ratchathani +6645 314-931 -4 Ubon Ratchathani University +6645 433-097 -8 Ubonwatsadu +6645 243-503 -4 Ubonratchathani* (Mon-Sun 10.00-19.00 hrs.) Warin Chamrap +6645 321-894, +6645 322-841 -3

218

Note: * Sub-Branch

+6645 661-730 +6645 679-044 +6645 613-204 +6645 622-873 +6645 671-711 +6645 691-198 +6644 581-021 +6644 519-415 +6644 551-309 +6644 561-322 +6644 511-423 +6644 714-007

+6645 240-384 +6645 854-082 +6645 376-008 +6645 313-306 +6645 282-458 +6645 351-126 +6645 242-629 +6645 244-792 +6645 317-366 +6645 362-743 +6645 441-763 +6645 314-935 +6645 433-099 +6645 243-621 +6645 321-613

Branch Name

Telephone

Yingcharoen Park* +6645 474-011 -2 (Mon-Sun 11.00-19.00 hrs.)

Udon Thani (8 Branches)

Ban Phu +6642 281-281 -2 Big C Udon Thani +6642 128-567, 597 (Mon-Sun 10.00-19.00 hrs.) Charoensi Complex +6642 249-210 -2 (Mon-Sun 10.00-18.00 hrs.) Kumphawapi +6642 331-055 Markkaeng Road +6642 249-701 -3 Talad Nong Bua +6642 244-035 Udon Thani +6642 247-755 -7 Udondusadee Road +6642 222-490

Fax. +6645 -474-011

+6642 281-283 +6642 128-596 +6642 249-210 +6642 331-006 +6642 249-704 +6642 247-654 +6642 247-758 +6642 241-768

Yasothon (4 Branches)

Big C Yasothon +6645 724-517 -8 +6645 724-519 (Mon-Sun 10.00-19.00 hrs.) Kut Chum +6645 789-416 -7 +6645 789-114 Loeng Noktha +6645 781-171, 374 -5 +6645 781-172 Yasothon +6645 712-684, 695 +6645 712-215

Eastern Region (78 Branches)

Chachoengsao (10 Branches)

Bang Khla +6638 541-014, 838 +6638 827-499 Bang Nam Prieo +6638 581-215 -7 +6638 581-179 Bang Pakong +6638 531-211 - 2, +6638 531-213 +6638 532-088 Bangpakong Thermal Plant +6638 573-574 -5 +6638 573-574 Carrefour Chachoengsao* +6638 514-676 -7 +6638 514-678 (Mon-Sun 9.00-19.00 hrs.) Chachoengsao +6638 511-045 -6, +6638 511-514 468 - 73 +6638 981-567 Mahachakapad Road +6638 511-203, +6638 512-023 +6638 514-449 Panich Road +6638 516-691 -3 +6638 516-694 Phanom Sarakham +6638 551-600 -1 +6638 551-154 Sanam Chai Khet +6638 597-068, 999 +6638 597-067

Chanthaburi (10 Branches)

Chanthaburi +6639 311-008, 507, +6639 322-050 Khlung +6639 441-239 -40 Na Yai Am +6639 371-236 -7 Pleaw +6639 397-225 Pong Nam Ron +6639 387-106 -8 Robinson Chanthaburi* +6639 303-255 -6 (Mon-Sun 11.00-20.00 hrs.) Soydow +6639 381-035, 301 Srirongmueng Road +6639 321-188 +6639 322-116 -7 Tanon Triratana +6639 325-931 -2 Tesco Lotus Chantaburi* +6639 303-414 (Mon-Sun 10.00-20.00 hrs.)

+6639 321-153 +6639 441-241 +6639 371-235 +6639 397-222 +6639 387-109 +6639 303-257 +6639 381-511 +6639 322-052 +6639 313-718 +6639 303-415


Branch Name Telephone Chon Buri (32 Branches)

Amata Nakorn Industrial +6638 440-518 -20 Estate* (Mon-Fri 9.00-17.00 hrs.) Ao Udom +6638 351-357, 620, 665 Ban Bung +6638 443-006, 498 Bang Pla Soi +6638 274-093 -5 Banglamung (Talad Naklua)* +6638 416-874 -5 Big C Chonburi* +6638 192-150 -1 (Mon-Sun 10.00-20.00 hrs.) Borwin (331 Road)* +6638 346-216 -7 Burapha University* +6638 394-527 -9 Central Center Pattaya Nua* +6638 362-547 -8 (Mon-Sun 10.00-20.00 hrs.) Central Festival Pattaya Beach +6638 043-285 -6 (Mon-Sun 10.00-20.00 hrs.) Chalermthai Shopping Mall * +6638 288-496, 638 (Mon-Sun 10.30-19.30 hrs.) Chon Buri +6638 273-584 -7 Chonburi Hospital* +6638 288-101 -2 (Mon-Sun 9.00-17.00 hrs.) Jadjamnong Road +6638 272-456, +6638 283-457 -8 Kao Talo (Pattaya Soi 83) +6638 332-616, +6638 332-665 Najomtien (Bann Amphur)* +6638 235-786 -7 Nong Yai +6638 219-472 -3 Nongmon +6638 392-059 -60, +6638 393-141 Pacific Park Sriracha* +6638 312-152, 154 (Mon-Sun 11.00-20.00 hrs.) Pattaya (Sukhumvit Road)* +6638 427-863, 891 Pattaya Klang +6638 428-436 Pattayatai +6638 425-014 -7, +6638 429-275 -6 Phan Thong* +6638 452-593 -4 Phanat Nikhom +6638 471-400, +6638 473-034 Plutaluang +6638 245-057 - 8 Prayasatja Road* +6638 275-871 - 2 Sahapat Industrial Park* +6638 482-928 -30 Samyaek Angsila +6638 272-471 -3 Sattahip +6638 438-042 -3 Si Racha +6638 312-002, 854, +6638 321-661 Talad Sriracha +6638 312-200 -1, +6638 323-224 -5 Tha Rua Laemchabang +6638 494-320 -2

Nakhon Nayok (2 Branches)

Fax. +6638 440-520 +6638 351-679 +6638 443-005 +6638 274-092 +6638 416-876 +6638 192-210 +6638 346-218 +6638 394-526 +6638 362-574 +6638 043-287 +6638 288-696 +6638 273-582 +6638 288-103 +6638 272-458 +6638 332-636 +6638 235-788 +6638 219-471 +6638 392-058 +6638 312-085 +6638 427-897 +6638 423-505 +6638 423-820 +6638 452-595 +6638 473-041 +6638 245-091 +6638 275-873 +6638 482-932 +6638 272-475 +6638 438-044 +6638 312-001 +6638 312-202 +6638 494-324

Ban Na +6637 381-191, +6637 381-668 228-9 Nakhon Nayok +6637 312-038 +6637 311-076 (Mon-Fri 8.30-16.30 hrs. Sat-Sun 9.00-15.00 hrs.) Note: * Sub-Branch

Branch Name Telephone Prachin Buri (4 Branches)

Fax.

304 Industrial Park +6637 274-631 -2 (Khlong Rang) (Mon-Fri 10.00-18.00 hrs.) Big C Prachin Buri +6637 452-129 -30 (Mon-Sun 10.00-20.00 hrs.) Kabin Buri +6637 281-635 -6, +6637 282-423 Prachin Buri +6637 212-022, (Mon-Fri 8.30-16.30 hrs. +6637 213-184 Sat-Sun 9.00-15.00 hrs.)

+6637 274-633

Ban Chang +6638 601-680, +6638 602-684 Ban Phe +6638 651-541 -3 Big C Rayong* +6638 621-793, 853 (Mon-Sun 10.00-20.00 hrs.) Klaeng +6638 671-200, 765 - 6 Mabtapud +6638 607-995 -9 Nikhom Phatthana (Rayong) +6638 637-343 -4 (Mon-Fri 10.00-18.00 hrs.) Rayong +6638 611-592, +6638 613-964 -5 Rayong Trade Centre* +6638 011-401 -2 Siam Eastern Industrial* +6638 660-046 -7 Tesco Lotus Rayong* +6638 624-161, (Mon-Sun 10.00-20.00 hrs.) +6638 624-511 Tha Pradu +6638 615-180 Wangchan +6638 888-254 - 5

+6638 603-256

Rayong (12 Branches)

+6637 452-131 +6637 281-637 +6637 211-369

+6638 651-540 +6638 621-914 +6638 671-240 +6638 607-994 +6638 637-345 +6638 611-205 +6638 011-400 +6638 660-048 +6638 624-019 +6638 615-181 +6638 666-382

Srakaew (4 Branches)

Aranyaprathet +6672 32-576 +6637 231-331 Srakaew +6637 241-577, +6637 241-576 (Mon-Fri 8.30-16.30 hrs. +6637 242-694 -5 Sat-Sun 9.00-15.00 hrs.) Ta Phraya +6637 269-114 -5 +6637 269-116 Watthana Nakhon +6637 261-021, 031 +6637 261-022

Trad (4 Branches)

Khlong Yai +6639 581-243 -5 Ko Chang* +6639 551-621 -2 (Mon-Sun 10.00-19.00 hrs.) Santung +6639 599-121 -3 Trad +6639 520-542 -4 (Mon-Fri 8.30-16.30 hrs. Sat-Sun 9.00-15.00 hrs.)

+6639 581-244 +6639 551-623 +6639 599-124 +6639 520-545

Southern Region (115 Branches) Chumphon (5 Branches)

Chumphon +6677 511-158, 887 +6677 511-889 (Mon-Fri 8.30-16.30 hrs. Sat-Sun 9.00-15.00 hrs.) Lung Suan +6677 541-091, +6677 541-947 +6677 541-109, +6677 541-851

219


Branch Name

Telephone

Fax.

Ocean Shopping Mall +6677 501-957 -8 +6677 501-959 Chumphon (Mon-Sun 10.30-19.30 hrs.) Pathomphon +6677 502-926 -8 +6677 502-925 Sawi +6677 531-276, 500 +6677 531-275

Krabi (7 Branches)

Ao Luk +6675 681-112 Aonang* +6675 695-535 -6 (Apr.1-Oct.31 Mon-Fri 9.00-17.00 hrs. Nov.1-Mar.31 Mon-Fri 11.30-19.30 hrs.) Aonang 2* +6675 695-317 -8 Klong Thom +6675 640-502, +6675 699-038, 054 Krabi +6675 611-193 -4, +6675 612-775 -6 Nua Khlong +6675 961-114 -5 (Mon-Fri 8.30-16.30 hrs. Sat-Sun 9.00-15.00 hrs.) Tesco Lotus Krabi* +6675 650-740 -1 (Mon-Sun 10.00-20.00 hrs.) Annua l Report 2008 Krung Thai Bank Pcl.

Nakhon Si Thammarat (17 Branches)

+6675 681-113 +6675 695-572 +6675 695-300 +6675 699-039 +6675 612-727 +6675 691-113 +6675 650-742

+6675 381-348 +6675 486-271 +6675 481-172 +6675 362-485 +6675 529-100 +6675 342-011

Narathiwat +6673 511-004 (Mon-Fri 9.00-15.00 hrs.) Sungai Kolok +6673 612-000 (Mon-Fri 9.00-15.00 hrs.) Tak Bai +6673 524-375, (Mon-Fri 9.00-15.00 hrs.) +6673 581-262 -3 Tanyongmas +6673 671-113 (Mon-Fri 9.00-15.00 hrs.)

+6673 512-012

220

Note: * Sub-Branch

Big C Pattani* +6673 312-554 (Mon-Sun 10.00-18.00 hrs.) Charoen Pradit +6673 335-990 (Mon-Fri 9.00-15.00 hrs.) Pattani +6673 333-024 -6 (Mon-Fri 9.00-15.00 hrs.) Yarang +6673 352-277 (Mon-Fri 9.00-15.00 hrs.) +6673 439-049

Phang Nga (4 Branches)

+6675 341-197 +6675 357-145 +6675 517-760 +6675 346-331 -2 +6675 315-826 +6675 411-411 +6675 347-832 +6675 421-726 +6675 521-455 +6675 347-338 +6675 411-601

+6673 614-314 +6673 581-261 +6673 671-451

Fax. +6673 312-555 +6673 335-991 +6673 331-036 +6673 439-112

Khok Kloi +6676 581-403 Khura Buri +6676 491-392 Phang Nga +6676 411-365, (Mon-Fri 8.30-16.30 hrs. 565-6 Sat-Sun 9.00-15.00 hrs.) Takua Pa +6676 421-888, +6676 422-484

+6676 434-754 +6676 491-118 +6676 411-810

Khao Chaison +6674 691-124 Mae Khri +6674 695-138 -9 Pak Phayun +6674 699-038 Phatthalung +6674 611-432, +6674 613-033 Tesco Lotus Phatthalung +6674 606-517 -8 (Mon-Sun 10.00-19.00 hrs.)

+6674 691-032 +6674 633-231 +6674 699-028 +6674 612-156 +6674 606-519

Central Festival Phuket* +6676 248-291 -2 (Mon-Sun 11.00-20.00 hrs.) Jungcetlon Patong Phuket* +6676 366-057-8 (Mon-Sun 11.00-20.00 hrs.) Kohkaew (Phuket) +6676 364-024 Patong +6676 344-301 -2 Phuket +6676 211-158, 351, 893 Phuket Airport* +6676 327-294, 483 Rusda Road +6676 217-632, 510, +6676 225-116 Tesco Lotus Rawai Phuket +6676 383-519 -20 (Mon-Sun 10.00-20.00 hrs.) Thep Kasattri Road +6676 355-284 -7

+6676 248-290

Phatthalung (5 Branches)

Cha Uat +6675 381-344 -6 Chandi +6675 486-271 -2 Chawang +6675 481-272 Chian Yai +6675 362-485 -6 Khanom +6675 529-441 -2 Maharat Hospital +6675 340-250 Nakhonsithummarat* Nakhon Si Thammarat +6675 342-772, +6675 356-017, 919 Nakhon Sri Thammarat +6675 357-137 -8 City Hall Pak Phanang +6675 517-609 +6675 517-120 -1 Robinson Ocean Nakhon +6675 346-331 -2 Si Thammarat* (Mon-Sun 10.30-20.00 hrs.) Talad Hua It +6675 343-015 Taladkaset +6675 411-311 Tesco Lotus Nakhon +6675 343-752 -3 Si Thammarat* (Mon-Sun 10.00-20.00 hrs.) Tesco Lotus Thung Song +6675 421-724 -5 (Mon-Sun 10.00-20.00 hrs.) Tha Sala +6675 521-453 -4 Thawang +6675 347-334 -7 Thung Song +6675 411-200, +6675 420-788

Narathiwat (4 Branches)

Branch Name Telephone Pattani (4 Branches)

Phuket (9 Branches)

+6676 421-999

+6676 376-059 +6676 364-026 +6676 344-300 +6676 213-598 +6676 328-150 +6676 211-586 +6676 383-533 +6676 355-288

Ranong (2 Branches)

Ranong +6677 811-502, +6677 811-646 +6677 823-039, 060 Ruengraj Road +6677 811-105, 716, +6677 811-152 (Mon-Fri 8.30-16.30 hrs. +6677 823-841 Sat-Sun 9.00-15.00 hrs.)

Satun (2 Branches)

Khuan Ka Long +6674 797-020 -1 +6674 797-019 Satun +6674 721-340 -1 +6674 721-344 (Mon-Fri 8.30-16.30 hrs. Sat-Sun 9.00-15.00 hrs.)


Branch Name Telephone Songkhla (21 Branches)

Fax.

Big C Hat Yai* +6674 580-913 -4 +6674 580-915 (Mon-Sun 10.00-20.00 hrs.) Carrefour Hatyai* +6674 555-463 -4 +6674 555-465 (Mon-Sun 10.00-20.00 hrs.) Chung Loon* +6674 557-124 -5 +6674 557-126 Had Yai Nai +6674 230-917 -8, +6674 237-988 +6674 237-987 Hat Yai +6674 220-704 -5, +6674 238-236 +6674 230-622 -3 Hat Yai Hospital +6674 245-388 -9 +6674 244-667 Hatyai University* +6674 501-629 -30 +6674 501-631 (Mon-Fri 9.00-17.00 hrs.) Kanjanavanit (SongKhla) +6674 558-622 -3 +6674 558-624 (Mon-Fri 10.00-18.00 hrs.) Khlong Ngae +6674 541-668 -9 +6674 541-667 Na Thawi +6674 371-545 -8 +6674 371-546 (Mon-Fri 9.00-15.30 hrs.) Nipatutit 2 +6674 239-088 -9, +6674 246-652 +6674 220-795 Padang Besar +6674 521-616 -7 +6674 521-615 Phetkasem Road (Hadyai) +6674 237-742, +6674 246-634 +6674 245-854, +6674 247-960-1, +6674 249-087 Poonnakan +6674 500-263 -4 +6674 500-265 (Mor-Or.Hat Yai)* (Mon-Fri 11.00-19.00 hrs.) Rajyindee +6674 230-481 -2, 498 +6674 230-499 Sadao +6674 411-007 +6674 411-957 +6674 411-955 -6 Sathing Phra +6674 397-115 -6 +6674 397-044 Singha Nakhon +6674 331-252, +6674 331-278 276, 297 Songkhla +6674 311-064, 585 +6674 323-316 (Mon-Fri 8.30-16.30 hrs. +6674 324-648 Sat-Sun 9.00-15.00 hrs.) Thanon Nakhon Nok +6674 315-236 -7 +6674 315-239 Thung Lung +6674 291-487, +6674 291-486 +6674 471-254 -5

Surat Thani (18 Branches)

Big C Ko Samui +6677 962-031 (Mon-Sun 10.00-20.00 hrs.) Big C Surat Thani +6677 600-165 -6 (Mon-Sun 10.00-20.00 hrs.) Chaweng* +6677 484-745 -6 Don Sak +6677 371-095 Haadrin* +6677 375-033, 233 (Mon-Fri 11.00-19.00 hrs.) Khiri Ratthanikhom +6677 391-074 -5

Note: * Sub-Branch

+6677 962-032 +6677 600-167 +6677 484-744 +6677 371-096 +6677 375-569 +6677 391-019

Branch Name

Telephone

Fax.

Ko Phangan +6677 377-184, 376 +6677 377-123 Ko Samui +6677 421-503 -5 +6677 421-503 Lamai* +6677 424-569 -70 +6677 424-600 Maenam* +6677 427-295 -6 +6677 427-405 Phunphin +6677 311-016, +6677 311-988 134, 334 Srivichai Road +6677 286-002-3, 442 +6677 286-001 Surat Thani +6677 281-829 -30, +6677 283-964 +6677 282-923 -4 Surat Thani Cooperative* +6677 441-089, 091 +6677 441-116 Talad Mai Road +6677 273-967, +6677 289-042 +6677 283-042 -3 Tesco Lotus Surat Thani* +6677 206-945 -6 +6677 206-946 (Mon-Sun 10.00-20.00 hrs.) Tha Chang +6677 389-054 +6677 389-015 Wiengsa* +6677 363-100 -1 +6677 362-012

Trang (9 Branches)

Kantang +6675 251-178, +6675 251-753 +6675 252-898 -9 Kapang +6675 286-251- 2, 254 +6675 286-253 Nayong +6675 242-464 -5 +6675 242-466 Sikao +6675 291-034 -5 +6675 291-036 Siriban Shopping Center +6675 214-208 -9 +6675 214-204 (Mon-Sun 10.00-19.00 hrs.) Talad Muengtrang +6675 219-871 -2, +6675 213-023 +6675 223-435 -6 Thab Thiang +6675 211-482 -4 +6675 211-485 Trang +6675 218-093, 110 +6675 211-192 (Mon-Fri 8.30-16.30 hrs. Sat-Sun 9.00-15.00 hrs.) Yan Ta Khao +6675 281-194, +6675 281-196 +6675 281-198

Yala (8 Branches)

Ban Nang Sata +6673 289-422 +6673 289-363 (Mon-Fri 9.00-15.00 hrs.) Betong +6673 231-372, 376 +6673 245-793 (Mon-Fri 9.00-15.00 hrs.) Coliseum Cineplex Yala* +6673 213-026 +6673 213-057 (Mon-Sun 10.00-18.00 hrs.) Raman +6673 295-101 -2, 295 +6673 295-024 (Mon-Fri 9.00-15.00 hrs.) Siroros +6673 211-749 -51 +6673 213-732 (Mon-Fri 9.00-15.00 hrs.) Sukyang Road +6673 230-024 +6673 230-867 (Mon-Fri 9.00-15.00 hrs.) Yaha +6673 250-358, +6673 291-209 (Mon-Fri 9.00-15.00 hrs.) +6673 291-034 Yala +6673 212-545, 596 -7 +6673 213-458 (Mon-Fri 9.00-15.00 hrs.)

221


Business Office Centers (BOC): 63 Centers as at January 31, 2009 Opening hours: Mon.-Fri. 8.00-17.00 hrs.

Annua l Report 2008 Krung Thai Bank Pcl.

Business Office Center Name

222

Fax.

Telephone

Bangkok and Vicinity: 20 Centers

Central Region: 8 Centers

Northern Region: 9 Centers

B ang Bon Chaengwattana Charoennakorn Ekamai Ladprao Nana Nua Nonthaburi Omnoi Onnuch Paknam Patanakarn Pathumthani Pra Pinklao Rajawongse Ramindra Samyod Sapankhao Suanmali Surawongse Wong Sawang

+662 415-8125, 8130 +662 573-0367 -8 +662 437-6459, 6829, 6832, 9943 +662 382-1135 -8 +662 538-2803, 2831, 3847 +662 208-3301 -6 +662 580-7544, 7561, 7563 +662 420-5953 -7 +662 320-2476 -8 +662 385-8615 -6, 8621 -3 +662 714-6473 -9 +662 581-8455 -6 +662 435-8391, 8401 +662 225-3422 -9 +662 521-7617 -22 +662 225-3043 -5 +662 280-1036 -40, 281-1374, 1478, 1530 +662 223-5812, 225-3031 -2, 3040 -2 +662 637-0572 -7 +662 556-1641 -2

Ayutthaya Lopburi Nakornpathom Petchaburi Ratchaburi Samut Sakorn Saraburi Supanburi

+6635 345-091 -6 +6635 345-098 +6636 414-175 -6 +6636 414-177 +6634 395-553, 582, 592 -4, 636 +6634 395-174 +6632 423-835 -7 +6632 423-840 +6632 310-956 -8, 967 -8, 977 +6632 311-022 +6634 421-521, 422-328, 462, 425-143, 350, 861 +6634 425-616 +6636 308-125 -31 +6636 308-124 +6635 525-570 -1 +6635 525-887

Chiangmai Chiangrai Kampaengpet Lam Pang Nakornsawan Phichit Phitsanulok Suthep Road Uttaradit

+6653 409-536 -9 +6653 748-802 -8 +6655 717-026 -7 +6654 230-407, 426, 607 +6656 222-400, 224-219 +6656 650-670 -1 +6655 232-460 -5 +6653 281-672 -6 +6655 412-333, 416-333

+662 415-8014 +662 573-0381 +662 437-6886 +662 382-1134 +662 538-4175 +662 256-8174 +662 580-7603 +662 420-9577 +662 320-2480 +662 385-8625 +662 714-6470 +662 581-8458 +662 435-8385 +662 222-9208 +662 521-7613 +662 222-2107 +662 281-0847 +662 225-3034 +662 637-0578 +662 556-1640

+6653 409-543 +6653 748-801 +6655 713-093 +6654 230-523 +6656 224-593 +6656 650-672 +6655 232-469 +6653 281-670 +6655 413-399


Business Office Center Name

Telephone

North-Eastern Region: 10 Centers Burirum Chaiyaphum Khonkaen Mukdahan Nakornratchasima Roi-et Sakonnakorn Surin Ubonratchathani Udonthani

+6644 618-748 -9 +6644 813-516 -7 +6643 338-419 -24 +6642 614-587 -9 +6644 222-114 -20 +6643 516-002 -3, 520-416 -7 +6642 733-793 -6 +6644 521-503 -8 +6645 283-027 -33 +6642 325-126 -31

Eastern Region: 6 Centers Chachoengsao Chanthaburi Chonburi Prachinburi Rayong Siracha

+6638 824-280 -2 +6639 340-294 -5 +6638 288-694, 289-093 -4 +6637 214-917, 952, 954 +6638 624-983 -5, 990 +6638 324-067

Chumporn Hatyai Koh Samui Krabi Nakornsithammarat Phuket Songkhla Suratthani Trang Yala

+6677 576-807 -8 +6674 239-130, 132, 306 +6677 426-155 -6 +6675 623-340, 367 +6675 313-669 -75 +6676 232-566 -8 +6674 311-212, 313-141 +6677 221-648, 661 -3, 696 +6675 217-941 -7 +6673 222-283 -5, 255-385 -8

Southern Region: 10 Centers

Fax. +6644 618-764 +6644 813-524 +6643 338-418 +6642 614-593 +6644 222-113, 125 +6643 520-418 +6642 733-802 +6644 511-423 +6645 283-034 +6642 325-132 +6638 824-283 +6639 340-296 +6638 289-013 +6637 214-814 +6638 624-986 +6638 314-130 +6677 576-809 +6674 234-185 +6677 426-199 +6675 623-209 +6675 313-676 +6676 232-473 +6674 313-312 +6677 221-660 +6675 217-938 +6673 222-281

223


International Business Centers (IBC): 19 Centers as at January 31, 2009 Opening hours: Mon.- Fri. 8.00-17.00 hrs. International Business Center Name

Fax.

Telephone

Annua l Report 2008 Krung Thai Bank Pcl.

Bangkok and Vicinity: 14 Centers

Ekamai Om Yai Pak Nam Pathumwan Phrapinklao Rajawongse Samut Prakan Samut Sakhon Samyod Saphan Khao Saphan Mai Suanmali Surawongse Wong Sawang

+662 382-1092 -6 +662 811-4322 -5 +662 389-3183 -4 +662 216-2570 -3 +662 884-6910 -3 +662 225-4505, 4507 -14 +662 385-8820 -1, 8935, 8938 +6634 413-057 -8 +662 224-8931, 8933, 8937 +662 282-5151, 7152 -4 +662 521-6340 -2, 6344 +662 223-7716 -7, 7738 +662 233-3921 -5 +662 913-2660 -3

Ayuthaya

+6635 353-671 -3

Chiang Mai

+6653 216-028, 225-567

Chon Buri

+6638 252-210 -1

Hat Yai Phuket

+6674 351-570 -4 +6676 232-470 -2

+662 382-1090 +662 431-0156 +662 389-2802 +662 215-8473 +662 884-6914 +662 225-4506 +662 385-8464 +6634 413-059 +662 224-8929 +662 282-5152 +662 521-6343 +662 225-3036, 3062 +662 224-3926 -7 +662 585-0862

Central Region: 1 Center

+6635 353-674

Northern Region: 1 Center

+6653 214-998

Eastern Region: 1 Center

+6638 352-209

Southern Region: 2 Centers

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+6674 236-045 +6676 232-473


Overseas Branches: 7 Branches as at January 31, 2009 Kunming Branch

General Manager : Mr. Pipat Anegsiripong & Vice President Address : 1st Floor South Building,

Kunming Hotel, 52 Dong Feng Road (East), Kunming, Yunnan The People’s Republic of China, 650051 Telephone : +86 871 313-8370 -1 +86 871 313-8359 Fax. : +86 871 313-8367 Telex : 64190 KTB KM E-mail : br.kunming@ktb.co.th ktbkmxcn@public.km.yn.cn

Los Angeles International Branch

Acting General : Mr. Ittisoonthorn Nuangyindee Manager Address : 707 Wilshire Boulevard,

Suite 3150 Los Angeles,

CA. 90017, USA Telephone : +1 213 488-9897 +1 213 488-9899 Fax. : +1 213 891-0733 Swift : KRTH US 6L E-mail : br.losangeles@ktb.co.th ktbla@pacbell.net

Telephone : +855 23 882-959 +855 23 305-881 -2 +855 23 350-421 Fax. : +855 23 883-719 Swift : KRTH KH PP E-mail : br.phnompenh@ktb.co.th ktbpmp@online.com.kh Siem Reap Province Sub-Branch General Manager : Mr. Sethayut Maneesri & Assistant Vice President Address : 10-11 Sivatha Road, Mondol 2 Khum Svay Dangkom

Siem Reap District Siem Reap Province,

Cambodia Telephone : +855 63 964-758 Telephone & Fax. : +855 63 964-759 E-mail : br.siemreap@ktb.co.th

ktbsre@camshin.com.kh

Singapore Branch

General Manager : Mr. Pumin Leelayoova & First Vice President Address : 32-05/08 OCBC Centre 65 Chulia Street, Singapore, 049513 Telephone : +65 6533-6691 +65 6533-0131 Fax. : +65 6533-0930 Mumbai Branch +65 6533-0932 General Manager : Ms. Nuannapha Wongthawatchai Swift : KRTH SG SG & Vice President th E-mail : br.singapore@ktb.co.th Address : 6 Floor, 62 Maker Chambers VI

ktbs@pacific.net.sg Nariman Point, Mumbai 400-021, India Vientiane Branch Telephone : +91 22 2287-3741 -3 General Manager : Mr. Jaturong Bunnag +91 22 2283-7693 +91 22 2287-5458 & Assistant Vice President Address : 80 Lanexang Road, Fax. : +91 22 2287-3744 B. Xiengngeuanthong Swift : KRTH IN BB M. Chanthabouly, Vientiane E-mail : br.mumbai@ktb.co.th People’s Democratic

ktbmbin@bom3.vsnl.net.in Republic of Lao Telephone & Fax. : +856 21 213-480 Phnom Penh Branch +856 21 222-761 General Manager : Mr. Pisit Buranakitpinyo +856 21 222-762 & Vice President E-mail : br.vientiane@ktb.co.th Address : 149 Road 215, Sangkat Deipo 1 Market, ktblao@laotel.com Tuankok District, Phnom Penh City, Cambodia

225


Summary of Items in accordance with Form 56-2

Annua l Report 2008 Krung Thai Bank Pcl.

Item

Page

Message from the Chairman and the President 12-13 The Board of Directors’ Responsibility for Financial Reports 122 Report of the Nominating and Remuneration Committee 106 Report of the Audit Committee 121 Report of the Corporate Governance and Social and Environmental Responsibility Committee 105 1. General Information 1.1 Company information 193 1.2 Brief history and key changes 193-194 1.3 Other companies where shareholding is 10% or more 198-202 1.4 Other references 196 2. Financial Highlights 11, 94-95 3. Business Operation 3.1 Business operation of the Bank and affiliated companies 45-67 3.2 Income structure 55, 57 3.3 Major changes in business operation 60-64 4. Risk Factors 96-104 5. Shareholding and Management Structure 5.1 Shareholders 1) Top 10 shareholders 68 2) Shareholders who have influence on the Bank’s policy significantly 68, 70 5.2 Management 1) Management structure (1.1) Structure and scope of power and duty of the committees 14-15, 68-77 (1.2) Names of Directors and Names of Independent Directors with 17-20, 25-30, 70-76, 73, 116-117 Knowledge and experience in review of financial statement (1.3) Independent Directors nomination process 74-76, 77-78 (1.4) Board of Directors meeting 80 (1.5) Profile of Executives and Corporate Secretary 21-24, 31-35, 80-81 (1.6) Information of business relation transactions between Independent Directors 26-30, 76, 81 and the Bank, the Bank’s parent company or affiliated companies 2) Nomination of Directors and Executives and Minority Shareholders’ Rights 77-80, 108-117 3) Remuneration for Directors and Executives 114-116 4) Corporate Governance 107-120 5) Supervision of the use of inside information 109-110 6) Internal control and audit 71, 102, 116-119, 121 5.3 Dividend payment policy 196 6. Related Party Transactions 110-111, 175-177 7. Analysis of Operating Performance and Financial Standing 84-93 8. Financial Statements 8.1 Consolidated and the Bank’s financial statements 124-192 8.2 Auditor’s fee 196 9. Industrial Situation and Competition 41-44 10. Other Factors that may affect Investment Decision 197 11. Information on Debentures or Financial Instruments 168-171, 195-196

226


Produced by: Business Research Department Risk Management Sector Risk Management & Compliance Group Krung Thai Bank Public Company Limited Printed by: Sirivatana Interprint Public Company Limited



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