TMBThanachart Bank Public Company Limited Interest income As of 31 December 2021, total interest income of the Bank and its subsidiaries was THB51,000 million, decreased by 5.2% from 2020. Such decline was mainly due to lower interest on loan from multiple rate cuts, pressure from adjusted effective interest rate (EIR) approach and loan contraction as a part of loan quality focus strategy amidst unstable economic environment. Key items are as follows. • Interest on loans contracted by 12.7% YoY to THB39,832 million from previous year. • Interest on hire purchase and financial lease decreased by 3.1% YoY to THB22,034 million. • Interest on interbank and money market items dropped by 44.8% YoY to THB1,060 million. • Interest on investments in debt securities declined by 35.1 % YoY to THB1,247 million. Interest expense At the end of 2021, total interest expenses of the Bank and its subsidiaries was THB13,240 million, a decrease of 28.5% from last year, due mainly to efficient balance sheet optimization resulting in cost of deposits reduction and lower funding cost. Details are shown below. • Interest expense on deposits decreased by 38.0% YoY to THB7,158 million. • Interest expense on interbank and money market items fell by 48.6% YoY to THB277 million. • Interest on debt issued and borrowing contracted by 14.3% YoY to THB2,510 million. Net interest margin (NIM) was recorded at 2.97% in 2021, slightly decreased by 3 bps from 3.00% in 2020. Such a slight decrease was because pressure from lower yield on earning assets, conservative EIR approach and low rate environment was alleviated by balance sheet optimization and efficient funding cost management. Note: Consolidated financial statements FY2019 FY2020 FY2021 2.81% 2.97% 3.00% Figure 3: Net interest margin (NIM) 130
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