Mr. Piti Tantakasem Chief Executive Officer With this direction, the Bank therefore prudently grew new loans in 2021, with a focus on low-risk secured lending, namely home loans and hire purchase, which are the Bank’s areas of expertise and we are one of market leaders. At the same time, the Bank continuously enhances loan portfolio quality by providing proactive solutions and de-risking weak loans. As a result of such a direction, the Bank reported total loans of THB 1,372 billion at the end of 2021, which declined 1.5% from 2020. Although loan growth was slowdown, loan portfolio quality was improved in terms of both diversification and staging. This can be indicated by the diversification of loan portfolio to retail-secured loans. And for loan staging, the combination of outstanding stage 2 loans and stage 3 loans reduced by approximately THB 7 billion or 4.4% from the previous year. One the deposit side, the deposit balance was THB 1,339 billion, which dropped 2.5% from 2020 as a result of a decrease in term-deposit balance from deposit optimization post-merger and liquidity management amid a slow loan growth environment. In terms of the operating revenue, the Bank realized the benefits of the balance sheet synergy from deposit and loan optimization post-merger as planned. Nevertheless, due to rising pressure from the COVID-19 situation, operating revenue declined 5.5% from previous year to THB 65,537 million. In such a revenue-constrained environment, cost efficiency was greatly crucial. The Bank executed strong cost discipline and realized the cost synergy from reducing overlapping costs between the two banks on top of boosting operational optimization. As a result, despite additional expenses incurred from the integration, operating expenses were not accelerated. Operating expense was THB 31,219 million, a 3.0% decrease from the previous year. And because the asset quality was managed in accordance with the target, the expense provision was not accelerated and remained at THB 21,514 million, which was slightly lower than in 2020 at THB 24,831 million. However, it was still at a higher level than normal and sufficient to support risks. As a result, the net profit of 2021 was THB 10,474 million, increased 3.6% from 2020. Although the Bank continued to focus on a conservative business strategy in 2021, we have worked diligently to enhance business potential and competitiveness for future growth. Our efforts included establishing business partnerships through an acquisition of a 10% stake in Thanachart Insurance and Thanachart Securities, as well as implementing digital technology to develop new products and services that will be rolled out in 2022. One Goal for Thais’ Life-long Financial Well-being The COVID-19 crisis has highlight financial fragility issues for many of Thai people. And that underscores the importance of our goals: that is, to improve Thai people’s life-long financial well-being. Thus, moving forward, TMBThanachart remains steadfast in the responsibility to raise awareness and educate Thai people about the importance of financial literacy. The Bank also determines to fully leverage great potential from the merger to continuously create financial solutions that improve customers’ financial well-being across all dimensions, including Mindful Spending & Start Saving, Healthy Borrowing, Investing for Future, and Sufficient Protection. Lastly, I would like to thank all of our customers and shareholders for supporting us along our journey of transformation and growth. Additionally, it is indispensable to recognize every one of our employees for their collaborative efforts in shaping TMBThanachart into an organization with full potential and ready to Make REAL Change for Thai people. TMBThanachart Bank Public Company Limited 10
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