Susta i nabi l i ty Repor t 2020 TMB Bank Public Company Limited Well-being Fo r Yo u r Be t t e r Financial
Make REAL Change
Mi ss i on V i s i on To become the recommended bank of choice by our customers To improve our customers’ life-long financial well-being 4 I n t r odu c t i o n Cu s t ome r s En v i r o nme n t a l & So c i a l I mp a c t s Pe op l e Go v e r n a n c e App e nd i x Su s t a i n a b i l i t y Re po r t 2 0 2 0
Make REAL Change เ ป ลี่ ย น . . . เ พ�่ อ ใ ห ชี ว� ต คุ ณ ดี ข�้ น 6 8 10 11 15 19 21 23 26 Message from Chairman and CEO About TMB Strategy and Business Sustainability at TMB Integration 18 Customers Responding to COVID-19 Financial Well-being Digitalization Customer Experience 28 Environmental & Social Impacts Responsible Lending Sustainable Finance Our Environmental Impacts Social Development 29 31 33 34 50 54 58 62 About This Report Sustainability Performance GRI Content Index Assurance Statement 42 Governance Corporate Governance & Business Ethics Risk Management Market Conduct Data Privacy & Cybersecurity 43 44 46 48 People 36 Integrated Workforce Diversity Competency Development Successor Development Exploring New Career Paths Employee Well-being 37 39 39 40 40 41 5 I n t r odu c t i o n Cu s t ome r s En v i r o nme n t a l & So c i a l I mp a c t s Pe op l e Go v e r n a n c e App e nd i x Su s t a i n a b i l i t y Re po r t 2 0 2 0
6 Su s t a i n a b i l i t y Re po r t 2 0 2 0 I n t r odu c t i o n Cu s t ome r s En v i r o nme n t a l & So c i a l I mp a c t s Pe op l e Go v e r n a n c e App e nd i x MESSAGE FROM OUR CHAIRMAN AND CHIEF EXECUTIVE OFFICER After successful financial closingof theTMB-Thanachartmerger transaction last year, the year 2020 saw initial realization of synergies and the integration proceeding as planned, despite the COVID-19 pandemic and all the limitations it brought. The pandemic had a devastating impact on livelihoods, crippled the global economy, and spread unlike anything we have seen in recent history. During this time, we strived to ensure business continuity and support our customers who have been affected by the pandemic as well as the economy at large. In parallel, we went through internal realignment of the two banks’ operating models, as part of our integration exercise, to ensure the two banks are ready to operate as one legal entity by mid-2021. Equally important, we tried our best to live up to our social responsibility through various safety measures to protect our customers and employees from COVID-19 virus and to prevent further spread of the pandemic. It has been a time of significant change for us, during which we have combined two mid-sized banks to become the sixth largest bank in Thailand by asset size. The merger between TMB and Thanachart allowed us to leapfrog our competitors by strengthening our business model to become more sustainable and competitive. We achieved this during a time of fast-changing technological disruption and a pandemic crisis by harnessing our complementary strengths and economies of scale. Doubling in size and resources make us better equipped to “Make REAL Change” to a newly expanded customer base of 10 million through a comprehensive suite of products and services, an increased number of touchpoints of the combined network, and a larger investment pool that will help us drive innovative digital solutions to address unmet customers’ needs. Ultimately, this reconfirms our belief that the merger was critical in ensuring a sustainable and defensible business model in the long run. In 2020, integration was of utmost importance for the merged bank. Despite the COVID-19 crisis, the integration has remained a priority, with the Board of Directors, management and employees all working together diligently to ensure that it is progressing according to plan in preparation for the Entire Business Transfer in July 2021. In line with our integration plan, we have accelerated the realization of synergies in a number of ways – from pursuing balance sheet optimization, capitalizing on economies of scale to achieve higher cost efficiency, and enhancing digital capabilities while rationalizing the overlapping branch networks. Mr. Ekniti Nitithanprapas Chairman of the Board of Directors Mr. Piti Tantakasem Chief Executive Officer
7 Su s t a i n a b i l i t y Re po r t 2 0 2 0 I n t r odu c t i o n Cu s t ome r s En v i r o nme n t a l & So c i a l I mp a c t s Pe op l e Go v e r n a n c e App e nd i x During the COVID-19 crisis, we, as a bank, also have a responsibility to help our customers overcome the financial difficulties they face. At the onset of the pandemics, our immediate attention was directed to supporting customers by providing debt relief programs consisting of two phases. Both phases were comprised of measures designed to alleviate financial hardship in the form of repayment deferrals of both principal and/or interest payments, the reduction of interest, extension of installment periods, and soft loan facilities. Our programs have helped more than 750,000 customers across all segments, which is equivalent to approximately 40% of our total lending portfolio. By the end of 2020, most of our customers had resumed normal payments and exited the program, leaving only 15% remaining in the program. The pandemic has only confirmed our belief that the financial journey of all our customers should be transformed for the better. Our mission for the merged bank is to improve customer’s financial well-being, to allow them to comfortably meet their current commitments and to have financial resilience for the future. To deliver on this commitment, we have defined four foundational pillars for financial well-being – mindful spending and maximized savings, healthy borrowing, investing for the future, and sufficient protection. Internally, these pillars underpin the way we work and are embedded in how we design new products and services. Externally, they represent a long-term journey for us to uplift financial literacy among millions of Thai consumers, equip them with appropriate uses of financial tools and ultimately transform their mindsets and behaviors towards prudent financial management. As lending is an important part of the business, it is our responsibility to assess the ramifications of unsustainable activities that are linked to environmental and social risks and will, over time, threaten socioeconomic and financial systems. Our Environmental and Social Responsibility Policy has been updated to strengthen and establish a clear objective and more stringent guidelines for indirect environmental and social risk assessments and impacts from our banking activities. Key elements of this updated policy include five sector specific guidelines (Defense/ weapons, Alcoholic beverages, Tobacco, Natural resources/energy/ chemicals, and Radioactive materials,) and an exclusion list of 27 business activities that pose high risk to the environment and society. The bank has also committed to no longer financing coal-fired power plants due to climate change. Moreover, we continue to offer customers of all segment sustainable financial solutions to meet customers’ needs where we integrate environmental, social and governance factors in our product and services. We also proactively engage with clients to support them in reducing negative impacts and improving their businesses to become more sustainable. This builds long-term partnerships and creates win-win solutions that benefit customers, the environment and society without compromising the bank’s bottom line. For instance, TMB ALL FREE offers free protection including basic accidents and life insurance with just a minimum saving of 5,000 Baht. This product addresses a gap in the society where 9 out of 10 Thais do not have protection, a necessity for life stability. Another product is TMB Smart Port, a full-service investment portfolio management. A service which was previously exclusive only to private banking customers, is now available for mainstream customers. The primary objective is to promote smart investment and financial inclusion. Moreover, SME loans with positive social impacts – valued at over 319 million Baht, compared to a target of 220 million Baht – have been approved to allow doctors to either establish or upgrade 126 medical clinics in 47 Provinces across Thailand. This has allowed people in remote areas to have access tomedical services. The bank also expanded green financing by providing 1.5 billion Baht of long-term project financing to a renewable electricity firm. The deal represents one of our key transactions in renewable energy and one of the largest C&I deals in the ASEAN region in 2020. Through a continuous effort, our overall sustainability performance based on both national and global benchmarking has continued to improve. The bank has retained first place in the Fair Finance Thailand ranking for two consecutive years, a proof that we are leading Thai financial institutions towards sustainable banking, while we have been selected to be in SET’s Thailand Sustainability Investment (THSI) for three consecutive years. Lastly, we are extremely proud of our employees, who have shown the utmost dedication, risen up to support our customers and the broader community amid the pandemic. While it has been a challenging and arduous year, we all demonstrated perseverance and unity. As we go forward on this path of sustainable banking and become the recommended bank of choice, it is imperative for us to always strive to deliver the best-deal personalized solutions relevant to customers’ life stage or event to uplift the customers’ financial well-being and ultimately become their trusted advisor. Above all, we are committed to making REAL Changes and continuing to do better by all our stakeholders to truly create long-term value for a sustainable future.
ABOUT TMB Founded in 1957, TMB Bank Public Company Limited (TMB) initially had limited scope as a bank exclusively serving military units and their personnel. Since then, it has expanded its financial services, becoming a commercial bank in 1973 and being listed on the Stock Exchange of Thailand in 1983. TMB has also been through several mergers, including with DBS Thai Danu Bank and the Industrial Finance Corporation of Thailand in 2004, ING Bank N.V. in 2007, and Thanachart Bank in 2019. The recent merger has made TMB the sixth largest commercial bank in Thailand by asset size. Today, we provide a full range of banking services and platforms to our retail and commercial customers. Our Products and Services TMB’s financial products and services include deposits, loans, investment products and bancassurance. As a customer-centric organization, understanding customers’ needs is a key factor in our success. TMBbusiness is organized into two key customer segments: commercial banking and retail banking. Commercial Banking Group Retail Banking Group Deposit • Business accounts (TMB One Bank) Loan • Working capital • Supply chain solutions • Letter of guarantee • Special funding program for SME (TMB SME Smart Biz) Payment and collection • Payment service • Collection service • Liquidity management International trade • International trade finance service • Capital market risk management Insurance • Bancassurance & Business Protection Others • Corporate card • Agency service • Investment banking Deposit • Transactional account (All Free) • Savings account (No Fixed) Loan • Personal loan • Home loan • Auto loan • Credit card loan Mutual fund • TMB Open Architecture Insurance • Savings towards future securities • Life and health protection • Properties protection Wealth banking • Wealth banking • Superior banking 8 Su s t a i n a b i l i t y Re po r t 2 0 2 0 I n t r odu c t i o n Cu s t ome r s En v i r o nme n t a l & So c i a l I mp a c t s Pe op l e Go v e r n a n c e App e nd i x
TMB Open Architecture TMB is the first Thai bank to offer an open architecture platform to all customers. The bank has set a long-term strategy to use this open-architecture platform to offer a wide variety of mutual fund products that match various client needs and risk-return profiles. In 2020, TMB had 11 strong partnerships with leading asset management companies, both domestic and international, including TMB Asset Management Co, Ltd. , UOB Asset Management (Thailand) Co., Ltd., Aberdeen Asset Management Co, Ltd., CIMB-Principal Co., Ltd., Manulife Asset Management Co., Ltd., TISCO Asset Management Co., Ltd., One Asset Management Co., Ltd., Kasikorn Asset Management Co., Ltd., Krungsri Asset Management Co., Ltd., Krung Thai Asset Management Co., Ltd., and Thanachart Asset Management Co., Ltd. These enable TMB to offer a broad range of products and asset classes that suit the different risk profiles of our customers. TMB recently entered into a strategic bancassurance partnership with Prudential Life Assurance (Thailand) Public Company Limited (“Prudential Thailand”), a subsidiary of Prudential plc, for an initial term of 15 years. Taking effect fromJan 1, 2021, the partnershipwill provide Prudential’s leading health and wealth solutions to the entire network of the merged entity under TMB. The remaining term of the bancassurance contract with FWD Life Insurance, the bank’s previous bancassurance partner, will be entirely transferred to Prudential Thailand on 31 December 2020. FWD will continue to honor its obligations and to service customers who have bought FWD insurance policies through TMB for the remainder of their policy terms. For the non-life insurance sector, TMB offers insurance for loan collateral in association with non-life insurance companies. TMB also provides other non-life insurance products such as personal accident, health and motor insurance. 9 Su s t a i n a b i l i t y Re po r t 2 0 2 0 I n t r odu c t i o n Cu s t ome r s En v i r o nme n t a l & So c i a l I mp a c t s Pe op l e Go v e r n a n c e App e nd i x
STRATEGY AND BUSINESS Strategic Intents The bank has formulated seven strategic intents that will drive TMB to achieve targets in line with the bank’s vision and strategy over the next five years. 1 Customer Centricity TMB places emphasis on the customer at a center of business operation by gathering and analysing customer’s behaviour in order to develop financial products and services to meet their needs and provide better customer experience. Moreover, TMB also measures customer satisfactory to continuously improve the Bank’s products and services. TMB will continue to support our customers in need of help from the impact of the COVID-19. 2 Build Deposit and Transactional Banking Products Excellence TMB has usedDeposit-led strategy to differentiate customer value proposition in deposit products and transactional banking services. With this strategy, TMBcandeepen relationshipwith customers andunderstand customers better which will result in TMB becoming main bank of customers. 3 Build Sustainable and Recurring Non-Interest Income TMB continued to emphasis on building sustainable non-interest income capability. Building non-interest income capability allows the Bank to effectively manage capital because of the minimal capital requirement compare to credit-related income, for example, bancassurance products and mutal fund products. Moreover, non-interest income will help ensure sustainable bottom line through business cycles. TMB applied businessmodel of distributor and open architecture by searching for suitable business partners and best product to be available on the Bank’s shelf. This is to ensure the best offering which cater to variety needs of our customers. 4 Continue Leading in Auto Loan and Lending Products After the merger, the Bank has leveraged the strength of TBANK’s auto loan which equipped with available personnel, car dealer network, and brand’s strength to further expand the business and to cater customer’s needs. For example, the offering of TBANK’s auto loans to TMB’s customers. With comprehensive financial product offerings and services, it enhances the Bank’s ability to cope with the change inmarket environment and competition, and to maintain its leadership position in auto lending. 5 Optimize Capital Utilization and Liquidity Management TMB is strongly committed to delivering the level of profit expected by investors and has set the target to earn same level of ROE with top bank performers within the next 3-5 years. To achieve this, the Bank continues to put our focus on selectively growing balance sheet to generate incremental return. 6 Enhance Digital Capability and Solutions The current financial transaction is continuously growing in the digital channel due to the shift in customer’s behaviour and rapid technological development. To be prompt in these changes, TMB has continually invested in IT infrastructure, cyber security and customer data privacy system, as well as developing staff’s competencies, corporate culture in alignment to the digital era and digitalizing business processes to speed up product development cycle and enhance better customer experience. 7 Capture Synergy Realization After the merger, the Bank has realized benefits from Balance sheet synergy, investment & cost synergy andRevenue synergy. The integration plan has been progressing and is on track for smooth business transition at EBT in July 2021. 10 Su s t a i n a b i l i t y Re po r t 2 0 2 0 I n t r odu c t i o n Cu s t ome r s En v i r o nme n t a l & So c i a l I mp a c t s Pe op l e Go v e r n a n c e App e nd i x
SUSTAINABILITY AT TMB We strive to integrate sustainability into our business and to ensure that our strategic objectives do not only fulfil short-term goals, but also contribute to long-term sustainable growth. Overseeing sustainabi l i ty management and i ts ef fect iveness across the organization is the Nomination, Remuneration and Corporate Governance Committee and Chief Executive Committee. At the working level, the Sustainability Department works with relevant functions to raise sustainable practices above standards and improve awareness among bank staff across four key areas: business sustainability, environmental sustainability, social sustainability, and corporate governance and business ethics. Business Sustainability To shift towards a sustainable business model in order to create long-term financial growth and embed responsible practices Social Sustainability To continuously enhance human capital management and contribute to the sustainable development of youth and community Corporate Governance and Business Ethics To ensure effective governance, risk management and internal controls, and to foster ethical culture Environmental Sustainability To minimize our direct and indirect environmental impacts Sustainability Framework 11 Su s t a i n a b i l i t y Re po r t 2 0 2 0 I n t r odu c t i o n Cu s t ome r s En v i r o nme n t a l & So c i a l I mp a c t s Pe op l e Go v e r n a n c e App e nd i x
In 2020, TMB incorporated sustainability-related key performance indicators (KPIs) into corporate KPIs to drive our business towards sustainable growth. Point of Contact Sustainability Department TMB Bank Public Company Limited Head Office, 3000 Phahonyothin Road, Chom Phon, Chatuchak, Bangkok 10900 Tel. 0 2299 1111 Email: sustainability@tmbbank.com Reporting Platforms Website www.tmbbank.com/sustainability Annual Report 2020 Remark: * The significant decrease in resources consumption was mainly due to the work-from-home policy introduced in response to COVID-19 Sustainability KPIs Sustainability Ratings 2020 Key Performance Indicator 2020 Target 2020 Performance Good corporate governance and effectiveness of the Board ≥ 93.0% of corporate governance report score 92.0% of corporate governance report score Approval of customers’ requests for the debt relief program who are impacted by COVID-19 ≥ 90.0% 98.5% Data breach cases with customer impacts 0 case 0 case Customer experience index for complaint handling 80.0% for retail and commercial customers Retail 74.9%, Commercial 80.5% Regrettable loss < 10.0% 7.9% Positions filled by internal redeployment > 90.0% 90.7% Amount of SE loans with positive environmental and social impacts 200 million Baht 319 million Baht Green loan setup 750 million Baht 2,540 million Baht Energy and water intensity reduction 5.0% reduction from 2019 Energy intensity reduction by 30.5% and water intensity reduction by 29.7% from 2019* Sustainability Ratings 2019 2020 S&P Corporate Sustainability Assessment (S&P CSA) (score) 62 - MSCI ESG Ratings BBB A Fair Finance Thailand (ranking) 1st 1st FTSE4Good Index Inclusion Inclusion Thailand Sustainability Investment (THSI) Inclusion Inclusion ESG100 by Thaipat Institute Inclusion Inclusion 12 Su s t a i n a b i l i t y Re po r t 2 0 2 0 I n t r odu c t i o n Cu s t ome r s En v i r o nme n t a l & So c i a l I mp a c t s Pe op l e Go v e r n a n c e App e nd i x
TMB Creates Sustainable Value Throughout Our Value Chain 733 domestic branches, 114 of which are co-location branches > 4,372 TMB and Thanachart Bank’s ATM/ADM kiosks across the country 8,838 total employees 107,406 shareholders As of July 2020 Dividend 0.045 Baht per share ROE 5.1% EPS 0.1049 Baht NPS Score of 61 Customer experience index for complaint handling 74.9% and 80.5% for retail and commercial customers respectively 30 communities and over 27,000 people benefited from FAI-FAH community projects nationwide Total operating income 68,791 million Baht Net profit 10,112 million Baht 10 million customers …and giving back to our shareholders and wider society …providing exceptional products and services that enhance customer experience 13 Su s t a i n a b i l i t y Re po r t 2 0 2 0 I n t r odu c t i o n Cu s t ome r s En v i r o nme n t a l & So c i a l I mp a c t s Pe op l e Go v e r n a n c e App e nd i x
> Value to Stakeholders As a financial institution, TMB creates financial value for both investors and employees through dividends and compensation while playing a significant role in stimulating national economic growth and uplifting people’s financial well-being through responsible, inclusive, and accessible products and services. Our customers derive value from our products and services. As such, the bank invests in digital technologies and IT infrastructure to provide a better financial experience for our customers so that they experience faster, more convenient, easily accessible, and inclusive service. TMB provides training and career development programs for employees with the aim of promoting career growth and opportunities within the bank. Such value creation in terms of human capital development is not only beneficial to employees, but also to shareholders, investors and society, as it creates a skilled and well-trained workforce. The bank engages with all stakeholders on a regular basis. Stakeholders’ perspectives are taken into account and their concerns addressed appropriately. We believe that having a robust relationship with our stakeholders will enable us to operate responsibly and deliver innovative need-based products and services to customers and society. The bank is continuously mitigating its direct environmental impacts and also its consumption of natural resources while complying with environmental regulations in order to alleviate the bank’s impact on climate change. Input > Financial Capital All financial assets including assets, deposits and equity. Manufactured Capital External resources such as suppliers and contractors are required for business operations; and product and service development. Human and Intellectual Capital Time, skills and knowledge of our workforce; systems; technology; and innovation which contribute to business operations. Social and Relationship Capital Engagement and relationship building with stakeholders including customers, employees, investors, shareholders, regulators, and society. Natural Capital The consumption of natural resources by business activities, i.e., energy consumption and water withdrawal. > Output Financial Capital • 68,791 million Baht of operating income • 10,112 million Baht of net profit • Return on equity: 5.1% Manufactured Capital • 98.0% of transfer service via TOUCH • 25.0% increase in TOUCH active users compared to 2019 • 99.9% uptime of systems for key customer touchpoint applications • Zero data breach cases with customer impacts Human and Intellectual Capital • 8,576 million Baht of employee compensation and benefits • Development programs such as TMB Hackathon and Objective and Key Results (OKR) • Launch of new products and services such as Business ONE, Payroll Plus, Cash Your Car, etc. Social and Relationship Capital • The Bank’s NPS score: 61 • 2,573 volunteers for 23,224 hours • Community investment of 31 million Baht Natural Capital • GHG Scope 1 emissions: 1,177 tonnes of carbon dioxide equivalent • GHG Scope 2 emissions: 15,409 tonnes of carbon dioxide equivalent • GHG Scope 3 emissions from business travel: 266 tonnes of carbon dioxide equivalent TMB inspires people to Make REAL Change by using our financial expertise to address the needs of our customers for better financial well-being. TMB strategic intents: • Focus on customer centricity • Build deposit and transactional banking products excellence • Continue leading in auto loan and lending products • Build sustainable and recurring non-interest income • Optimize capital utilization and liquidity management • Enhance digital capability and solutions • Capture synergy realization TMB Value Creation Saving Investment Protection Transactional Financing 14 Su s t a i n a b i l i t y Re po r t 2 0 2 0 I n t r odu c t i o n Cu s t ome r s En v i r o nme n t a l & So c i a l I mp a c t s Pe op l e Go v e r n a n c e App e nd i x
INTEGRATION TMB and TBANK are committed to synergizing our banking so that our customers have access to personalized solutions suitable for any stage or event in their lives, while enjoying a better customer experience through digital banking and higher branch coverage. The integrated organization will epitomize a new definition of banking and lead the Thai banking industry by enabling customers to have better financial well-being. In 2020, the integration proceeded as planned, and by July 2021 the Entire Business Transfer (EBT) is expected to be completed. Through the integration, the merged bank is expected to transform itself to leap the full benefit of scale and enlarged quality customer base enabled by the merger. The merger strengthened our position in the industry from 2 mid-sized banks to become 6th largest bank by asset size with a comprehensive suite of products. With complimentary positioning of TMB and Thanachart Bank, our retail banking is significantly enhanced to 4th largest bank with the market share of 15%, where our key products remain in strong positions; 28% of share in auto loan, 18% of share in deposit, and 12% of share in mortgage. Building on our strengths, we focus on capturing customer relationship, driving digital solutions, and tapping into underpenetrated customers. 2 mid-sized banks Short-term product driven relationship Product champion Branch-first operating model 6th largest bank in Thailand Long-term customer relationship Total solution provider Digital-first operating model 15 Su s t a i n a b i l i t y Re po r t 2 0 2 0 I n t r odu c t i o n Cu s t ome r s En v i r o nme n t a l & So c i a l I mp a c t s Pe op l e Go v e r n a n c e App e nd i x
For successful execution of the integration, it was critical to set strategic directions and align them across both banks. Since January, a new set of c-suite executives and a governing board of directors for the merged bank have been established. Soon after, the topmanagement conducted a process of management on the ground, travelled across the country to communicate directly to both TMB and TBANK employees on the merged bank’s strategic directions, mission, values and culture. They shared ‘One Dream’, an aspiration to deliver better financial well-being to Thai people through a strong ‘One Team’, as well as a target, ‘One Goal, of becoming the recommended bank of choice by our customer. These sessions were successfully completed just before the COVID-19 outbreak occurred. Employee well-being is a key element of the integration plan because employees – the driving force of the business – are the most valuable asset of both banks. As the bank is committed to treating every employee equal ly, al l HR pol icies, such as compensation, benefits and recruitment, have been al igned in preparation for employee transfer, to ensure the fair treatment and selection of both banks’ employees for the new bank. Shortly after the introduction of the c-suite, a new organizational structure for the merged bank was definedwhere all positions were identified and vacancies forecast. Then came a selection process where the bank fairly and effectively evaluated all employees for new positions andmatched the right skills and competencies to each position with equitable pay, thereby increasing the potential for the newbank. This process successfully organized all employees within the new structure of the merged bank. Throughout the year, employee transfers have been conducted phase by phase, starting with senior management and key positions. As of 2020, 1,840 employees have been transferred to the merged bank. ONE DREAM ONE TEAM ONE GOAL 16 Su s t a i n a b i l i t y Re po r t 2 0 2 0 I n t r odu c t i o n Cu s t ome r s En v i r o nme n t a l & So c i a l I mp a c t s Pe op l e Go v e r n a n c e App e nd i x
Customer onboarding is undoubtedly of paramount importance for the integration, as we want to ensure the smoothest possible transition of customers to the merged bank with the goal of retaining all our customers. Through the integration plan, we have been accelerating synergy value through digital capabilities, serving and aiding the transition of the newly expanded customer base of 10 million to the new bank. Moreover, both bank’s digital platforms have been connected seamlessly, providing more accessibility and convenience for customers. Using the TMB TOUCH and ATMs of both banks, customers can now access the card-less withdrawal functions and make bill payments for the following TBANK products: auto loans, car insurance, home loans, personal loans, credit cards, and debit cards. Our customers can access both TMB and TBANK’s 4,372 ATM/ADM kiosks across the country to deposit, withdraw or transfer money with no fees charged. Other changes including, but not limited to, Thanachart Funds are now available and can be purchased on TMB TOUCH, while small enterprises can complete loan bookings on TMB TOUCH. Since the beginning of the year, the co-location of branches jointly operated by TMB and TBANK has officially been launched to serve customers of both banks, serving customers in transition and facilitating the bank merger. As of 2020, there were 114 co-locations nationwide. By year’s end, products and services of both banks were available for customers in all co-location branches, offering a comprehensive suite of products and services to address every need and stage of life. 17 Su s t a i n a b i l i t y Re po r t 2 0 2 0 I n t r odu c t i o n Cu s t ome r s En v i r o nme n t a l & So c i a l I mp a c t s Pe op l e Go v e r n a n c e App e nd i x
CUSTOMERS Customers are at the heart of our business at TMB. Great customer experience through the Bank’s philosophy of ‘Get MORE with TMB’ is embedded in all development of new products and services. 18 Su s t a i n a b i l i t y Re po r t 2 0 2 0 I n t r odu c t i o n Cu s t ome r s En v i r o nme n t a l & So c i a l I mp a c t s Pe op l e Go v e r n a n c e App e nd i x
As the COVID-19 pandemic has had an unprecedented impact on all of us, TMB Bank has primarily focused on the well-being of our customers, employees and broader communities by providing support wherever possible. RESPONDING TO COVID-19 In the second phase, the bank extended a debt moratorium and launched additional measures to continuously support affected customers. For retail customers, we offered additional measures such as a 6-month grace per iod for pr incipal payment (only interest payable), a reduction of installments by extending tenures, a lower ing of monthl y installments to 50% for 6 months, and the provision of debt advisory services. Additionally, portfol io management fees for TMB Smart Port and front-end fees for all funds under management of TMBAM and TFUND were waived. For commercial clients, we offered debt restructuring programs tailored to different needs and profiles, such as risk level and payment ability, new loans to support liquidity problems, and business advisory services such as financial discipline, non-core asset diversion, and M&A. By the end of 2020, approximately 15% of the total loan portfolio was under the relief program, a significant drop from approximately 40% in June 2020, while both the retail and commercial segments experienced significant reductions to 9%, from 45% in June, and to 25%, from 38% in June, respectively. Although the majority of our customers resuming their normal payments after the debt relief programs had ended was a positive sign, we continued to support customers through our debt restructuring in order to provide suitable financial relief tailored to individual circumstances. 98% approval of customers’ requests for debt relief More than 750,000 customers utilized the debt relief program Customers As banking is an essential service, our employees have worked tirelessly to support customers throughout the pandemic. The bank introduced debt relief programs to support customers of all segments through various measures in response toBankof Thailandandgovernment policies. Our support during COVID-19 consisted of two phases, both comprisingmeasures designed to alleviate financial hardship in the form of repayment deferral of both principal and interest payments, reduction of interest, extension of installment periods, and soft loan facilities. In the first phase, the bank established a debt moratorium for both retail and commercial customers. For retail customers, we suspended both principal and interest payments for three months, reduced minimum payments, and extended the installment period up to 60 months. For commercial clients, we deferred both principal and interest payments by up to six months and provided soft loans to support liquidity for business continuity to reduce the impact of unemployment. 19 Su s t a i n a b i l i t y Re po r t 2 0 2 0 I n t r odu c t i o n Cu s t ome r s En v i r o nme n t a l & So c i a l I mp a c t s Pe op l e Go v e r n a n c e App e nd i x
Employees Our priority through the crisis has been to protect our employees while remaining open for business in order to support customers, communities and the economy. We introduced several measures to protect the health and well-being of our employees. Where possible, we implemented remote working. We also split locations to reduce workplace density, lessening the risk of spreading the virus while maintaining business continuity. We provided online tools, working protocols and guidelines, as well as regular weekly updates on COVID-19 from the top management, to ensure a smooth and effective transition during this unforeseen business disruption. During lockdown, we rolled out FUN FUN MONDAY – a mental well-being initiative with weekly activities – tobuilda stronger senseof community, support employees working from home and keep them engaged during this difficult time. Due to the uncertainty and severity of COVID-19, the bank also extended health insurance for the virus to employees and their immediate families, providing them with extra protection and peace of mind and reducing fear and anxiety. Furthermore, we stepped up thecleaninganddisinfectionof all locations, set up thermal scans for screening at office buildings and temperature checks at branches, installed protective screens at counters, supplied alcohol sanitizers and providedmasks for all employees. During lockdown, transportation was also provided to branch employees to avoid the use of public transportation for their work commute. During the rapidly changing situation, some business units experienced a surge in workload that exceeded their capacity. In response, we adjusted our operating plans and reallocated employees to support and facilitate customer demand in a timely manner. As a result, a number of employees with more flexibility were diverted to support high demand functions, especially the contact center. Due to a spike in customer demand for assistance via online channels, we had to quickly train and temporary relocate 110 employees to support contact center addressing their needs. Communities In addition, the bank has launched several initiatives and campaigns during the COVID-19 crisis to help communities through its FAI-FAHandPunBoon Platform. At the peak of the pandemic, the ‘Volunteer from Home’ campaign was launched to provide DIY face shields to frontline medical workers. The campaign enlisted volunteers, both employees and members of the public, to make face shields, resulting in a total of 8,000 pieces being successfully delivered to frontline workers in eight targeted hospitals. The bank also raised funds, donated by employees and the public, to support Pranangklao Hospital’s installation of aModular ScreeningUnit, worth two million Baht. To support affected communities, a FAI-FAH Sharing Center was launched with the goal of helping more than 1,500 unprivileged children gain access to free learning tools, so they could utilize their time at home more productively. Furthermore, thePunboon Fight COVID-19 campaign, leveraged under our PunBoon Platform, helpedmore than 10 foundations and hospitals by raising funds totaling 20 million Baht. 8,000 DIY face shields delivered to 8 targeted hospitals 20 million Baht in donations raised by the Punboon Fight COVID-19 campaign 2 million Baht raised for installation of a Modular Screening Unit at Pranangklao Hospital campaign 20 Su s t a i n a b i l i t y Re po r t 2 0 2 0 I n t r odu c t i o n Cu s t ome r s En v i r o nme n t a l & So c i a l I mp a c t s Pe op l e Go v e r n a n c e App e nd i x
Hitting the highest level for 17 years, and expected to rise further, household debt has become a national crisis. Due to this alarming trend, TMB Bank set out a new mission in 2020 to redefine Thailand’s financial landscape and to create financial well-being for Thai people. We believe better day-to-day financial health is fundamental to achieving life’s goals. The unprecedented COVID-19 crisis has only confirmed our belief that customers’ financial journey needs to be transformed so that they can comfortably meet their current commitments and enjoy financial resilience for the future. Recognizing the importance of our role and the responsibility we have to our customers, we saw a need to change the way we serve them. Instead of adopting the traditional role of a financial facilitator, we aim to become a trusted advisor by building a long-term relationship and focusing on creating value for customers through the provision of life-long financial solutions that improve their financial well-being. In a shift from a product-led approach to a solution-led approach, we now focus on providing personalized financial solutions, catering to different needs at every moment and stage of life. To deliver on this commitment, the bank defines financial well-beingusing four fundamental pillars. To help customers reach financial well-being, these four pillars underpin the way we work and are embedded into our product and service development and management. Differentiating us from other banks is our focus on quality products and holistic solutions for customers, rather than quantity, so that we can truly benefit them by uplifting their financial well-being. Hence, we continue to innovate new products and services and improve existing ones to incentivize better financial behaviors such as spending management, long-term saving habits, loan repayment discipline, risk-based long-term investments, and securing protections. Moreover, our products are designed to complement each other so that they can be tailored to personalized financial solutions addressing the needs of sub-segments through all stages of life. FINANCIAL WELL-BEING Sufficient Protection Mindful Spending &Maximizing Savings Mindful spending consists of lifestyle-based money management, creating awareness of how spending supports life goals and needs. Being disciplined about saving creates a financial foundation and security that provides a safety net in case of future emergencies. Healthy Borrowing Borrowing only when necessary using the appropriate loans and suitable tools ensures a right balance between today’s needs and future liabilities. The ability to pay back in full and on time to avoid additional interest is crucial. Having appropriate protection ensures financial stability and enables the mitigation of loss for you and your family. Investing for the Future Smart investing with appropriate asset allocation using risk profiles is the crucial next step for managing savings in preparation for the future and life-long stability. 21 Su s t a i n a b i l i t y Re po r t 2 0 2 0 I n t r odu c t i o n Cu s t ome r s En v i r o nme n t a l & So c i a l I mp a c t s Pe op l e Go v e r n a n c e App e nd i x
TMB ALL FREE Since its launch in 2014, the TMB ALL FREE, a transactional account, has been continuously improved to add value and address customers’ needs, allowing more freedom in terms of financial management, reducing costs and providing necessary protections. Since 2017, customers have been able to withdraw, transfer, pay bills and top-up nationwide using every banks’ ATMs. These services are free of charge for an unlimited number of transactions. Recently, the bank also removed the 2.5% currency exchange fee when using the card overseas, and introduced free insurance for online shopping. Moreover, customers with a minimum saving of 5,000 Baht are also eligible for free basic accident and life insurance protection – no fees or registration are required. Accident insurance is covered up to 3,000 Baht per accident while life insurance coverage is 20 times the deposit, up to a value of 3 million Baht. In 2020, we upgraded our accident insurance to allow for an unlimited number of accidents claims without having to pay the medical expenses upfront. Lastly, we launched the TMB ALL FREE Digital, which offers the same benefits as TMB ALL FREE, but charges zero fees. This Digital account is designed to fulfil the lifestyles of new generations while simultaneously helping them make the first important step towards financial well-being. Cash Your Car The toll of both rising household debt and the economic impact of the pandemic will be long-lasting. In an effort to intervene before the long-term effects can further damage the financial situation of the Thai people, the Bank launched Cash Your Car (CYC): the debt consolidation program to combine debts accumulated from credit cards, cars and personal loans into a single low-interest rate loan that uses the customer’s car as collateral. This program addresses the struggles faced by customers with multiple high-interest rate debts to manage, especially those who have suffered a loss of income but still have the same amount of debt to repay. The goal of this program is to simplify repayments for customersbyconsolidatingall debtswith thebank, aswell as from other banks, into one account that they can keep track of. There is only one annual fee to pay, and one fixed repayment date to worry about. Offering a fixed end-date for the loan which customers can work towards, CYC empowers them to better budget their finances and work towards a more sensible – and shorter – payback plan. Payroll Plus Since its launch in 2019, TMBPayroll Plus – an all-in-one digital platform– continues to support SME and corporate customers by effectively managing employees’ salary payments and offering all-in-one employee care (provident fund, group insurance and human resource management program). In October 2020, we launched a pilot programof Payroll Plus, a newly-improved version that focuses on supporting the employees of SME owners so they can achieve greater financial well-being. This pilot program was designed to incentivize better financial behavior and habits across four key areas: tax deductions, investment trials and discipline, healthy borrowing, and sufficient protection for the individual and family. This pilot program covered 22 companies, reaching more than 20,000 employees. Due to the success of the program, we aim to scale it up with a view to covering all payroll customers by 2021. 22 Su s t a i n a b i l i t y Re po r t 2 0 2 0 I n t r odu c t i o n Cu s t ome r s En v i r o nme n t a l & So c i a l I mp a c t s Pe op l e Go v e r n a n c e App e nd i x
Never before has the banking industry been faced with so many competitive challenges from disruptive forces. Continuing the same conventional practices will put us and the rest of the industry on an unsustainable path. While the shift is fundamental, we already have most of the building blocks in place to put customer’s financial well-being at the heart of a new strategy. Technological advancements have been the engine of banking sector transformation and have turbocharged access to digital financial services. The COVID-19 pandemic, meanwhile, has brought a heightened awareness of the critical importance of ensuringour digital services are accessible, useful and usable by all. In addition to using digital capabilities to accelerate synergies for the merged bank (see Integration chapter), the bank has rolled out a “Digital First” operating model to drive digital adoption while pursuing continuous improvements of the omni-channel customer journey and experience. DIGITALIZATION The Proportion of Retail Services Completed over TMB TOUCH: 98% 89% of Transfers of Bill Payments 39% 66% of customers opened TMB Smart Port via TMB TOUCH of customers opened individual mutual fund via TMB TOUCH 4.1in App Store TMB TOUCH received rating of 25% increase in TMB TOUCH active users 23 Su s t a i n a b i l i t y Re po r t 2 0 2 0 I n t r odu c t i o n Cu s t ome r s En v i r o nme n t a l & So c i a l I mp a c t s Pe op l e Go v e r n a n c e App e nd i x
‘Digital-First’ Operating Model The Digital First model is based upon our goal of delivering better customer experience by putting digital at the center of TMB Bank’s omni-channel offerings. To achieve it, we have changed the way we work, both within the organization and in terms of our in-branch service. Internally, we havemoved toward a decentralized platform of innovation that fosters a more rapid launch of new solutions across the bank. In our branches in 2020, we leveraged digital technology to enhance the offline experience and to ultimately onboard offline customers to online. For example, instead of using typical paperwork we began servicing branch-first customers via highly secured tablets or navigated them to TMB TOUCH, in order to familiarize them with our digital platform and to make their experience more convenient, faster and easier. In some pilot branches, floor managers can now help customers waiting in line with their transactions via ATM or TMB TOUCH. Branch at the Center of Banking Mobile Banking Platform at the Center of Banking Wealth Banking Wealth Banking Outbound Tele Sales Outbound Tele Sales Contact Center Inbound Services Contact Center Inbound Services Small Business Owners Small Business Owners Branch Banking Digital Banking Mobile Mortgage Sales Mobile Mortgage Sales 24 Su s t a i n a b i l i t y Re po r t 2 0 2 0 I n t r odu c t i o n Cu s t ome r s En v i r o nme n t a l & So c i a l I mp a c t s Pe op l e Go v e r n a n c e App e nd i x
Innovative Digital Solutions Leveraging our banking expertise and technological advancements, we are focused on improving the experience and financial well-being of our customers by continuously innovating new digital solutions and improving existing ones. In 2020, Our TMB TOUCH application is constantly updated to provide a seamless experience. Its new design features make it simpler, faster and easier to use, with a more intuitive navigation and homepage offering more convenience. With the newly launched TMB ALL FREE Digital, our customers are provided with a digital version of a debit card via TMB TOUCH, addressing the rapid consumer shift towards a cashless society, especially in light of the pandemic. Furthermore, the bank launched two new digital banking solutions, TMB Business One and TMB Smart Shop, to uplift customers’ businesses. Business One TMB Business One is not just another internet banking app, but rather a digital business management platform integrated with digital tools that efficiently helps manage both finances and operations. This application differs from others due to three highlights: One Platform, One Control, and One Command. One Platform is a one-stop solution allowing customers to complete transactions, such as domestic or overseas transfers, payments and new loan applications via any electronic device. One Control enables customers to simply monitor cashflow in real-time. As well as providing full visibility of their cashflow, it proactively alerts them about any irregular activities, analyzes cash flow projections and gives recommendations for the future. It also offers personalized menus tailored to each user’s needs within the organization via overview dashboards. One Command seamlessly combines both financial and non-financial solutionswhileBusinessOne connects other applications such as HR management to help customers efficiently manage their human resources and payrolls. TMB Smart Shop TMB Smart Shop is a business management application designed to make it easier for SMEs to manage their financials and inventory – a smart choice for managingbusiness better. The application allows money to be received easily via QR Code or all banking applications, provides real-time in-app notification upon every successful payment, informs the user of all sales transactions, and offers access to insightful online sales performance reports. COVID-19 Relief Initiatives Through our proactive efforts to respond to COVID-19, the bank delivered numerous initiatives via digital channels to help customers experiencing financial hardship. For example, the bank maximized all online channels, making sure customers have access to our services and support. Customers could find information and seek support on COVID-19 debt relief measures, aswell asself-service registration for debt relief programs, via the bank’s website and Line application. To alleviate customers’ financial hardship, the bank waived transaction fees for tax payments via digital channels such as the e-payment channel of the Revenue Department, ATMs, mobile banking (TMB TOUCH, Thanachart Connect, and Thanachart iNet) and internet banking (BIZ TOUCH, TMB Business CLICK, Thanachart iBiz) . This fee waiver has been extended unt i l 31 December 2021. Furthermore, we leveraged our PunBoon Platform to helpmore than 10 foundations and hospitals raise funds, totaling 20 million Baht, during the COVID-19 crisis as part of the Punboon Fight COVID-19 campaign. 25 Su s t a i n a b i l i t y Re po r t 2 0 2 0 I n t r odu c t i o n Cu s t ome r s En v i r o nme n t a l & So c i a l I mp a c t s Pe op l e Go v e r n a n c e App e nd i x
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