Form 56-1 One Report 2021 4.5 Impacts of the COVID-19 Pandemic The overall Thai economy was under pressure in 2021 due to the prolonged COVID-19 pandemic. Given the unprecedented crisis, the BOT has issued several COVID-19 relief measures to support Bank’s customer who affected by COVID-19 in the form of BOT relief measure phrase 3, debt moratorium for 2 months, debt consolidation, financial rehabilitation measures to support business recovery post COVID-19. The Bank has been proactively assisting customers throughout this crisis in line with the Bank of Thailand’s policy guidelines under a prudent integrated risk management approach. We provide the sustainable relief program for both retail and commercial customers to ensure customer’s long-term survival. At the end of December 2021, approximate 12% of total loan portfolio was under the relief program which decreased from 40% during a full lockdown in June 2020. As of Dec 2021, commercial customer under forbearance accounted for 10% of total commercial loans and retail customers accounted for 13% of total retail loans respectively. In terms of debt relief portfolio quality, we consider our debt relief portfolio remains healthy as over 80% of debt-relief customers requested for light modified terms and are able to service their debts with full interest payment. However, the Bank continue to monitor it closely and ensure our internal approaches are vigilant. In terms of risk management, the Bank has tightened its risk management practice while providing support to credit customers. Specifically, the Bank implemented 7 post relief schemes to track and trace their quality, so that corresponding Probability of Default (PDs) could be applied and to separate them from customers never ask for relief support. These principles are consistently applied since November 2020. The Bank has been strict to our Guiding Principle of Post Relief Risk Schemes to evaluate customers’ behavior and risk profile to ensure sufficient level of ECL. According to the uncertainties outlook from COVID-19 pandemic, the Bank continues to be vigilant and keeps monitoring customers to ensure the Bank’s asset quality as well as support customers to ensure that customers can recover in the long run. As of the uncertainties from COVID-19 pandemic, the Bank also considered forward looking economic scenarios in setting up management overlay to ensure sufficient provision. In 2021, the Bank set aside expected credit loss (ECL) and management overlay of THB21,514 million or equivalent to a credit cost of 157 bps. The Bank’s provisioning was prudent and based on forward-looking approach which includes reserve and preparation for unforeseeable future. Moreover, capital and liquidity positions were at strong level under COVID-19 situation and well above regulatory requirement. In terms of employees, the Bank managed safety protocol by allowing our employees to work from home at the highest rate and hybrid work model according to BCP plan and social distancing policy. Additionally, the Bank also provided COVID vaccine, operation sites and hospitel for our employees. The Bank applied the health and safety measures to prevent and minimize infection of the COVID-19 in the workplaces where our customers, employees and related parties are. We have completely done the case investigation, grouping related staff on their risk level with advices, sanitization and disinfection at the working areas. 143
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