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/ 23Siam Commercial Bank PCL. | Investor Presentation | October 2017

Investor Presentation

October 2017

IMPORTANT DISCLAIMER:

Information contained in this document has been prepared from several sources and the Bank does not confirm the accuracy and completeness of such

data, particularly where the data is sourced from outside the Bank. In addition, any forward looking statements are subject to change as a result of

market conditions and the final result may be different to that indicated. The Bank makes no representation or warranty of any type whatsoever on the

accuracy or completion of the information contained herein.

1H17/2Q17 Financial Results


PageAgenda

Review of 1H17/2Q17 Results 3-151.

Economic Indicators and

2017 Strategy & Outlook

17-232.


1H17 ResultsSolid performance with relatively stable asset quality

(Consolidated)

2016

Actual2017

Targets1H17

Actual

ROE 14.8% N.A. 14.0%

ROA 1.67% N.A. 1.61%

Net interest margin 3.27% 3.1-3.3% 3.19%

Non-NII growth -3.9% 3-4% -5.6%

Cost/Income ratio 38.7% 40-43% 41.3%

Total loan growth (yoy) 5.8% 4-6% 5.8%

NPLs (gross) 2.67% ≤3.0% 2.65%

Coverage ratio 134.3% ~130% 133.5%

PROFITABILITY

1H17 Highlights

1H17 net profit was Baht

23.8 billion, a 2.0% yoy

increase driven by higher

NII, higher net fee income,

and lower provisions.

NIM was at 3.19%, in line

with the annual target of

3.1-3.3%.

Non-NII declined by 5.6%

yoy largely due to lower net

insurance premiums and

lower gain on investments

despite higher net fee

income and net trading and

FX income.

NPL ratio fell slightly while

coverage ratio remained

high.

N.A. = Not Available1/ Excluding the large gains from the sale of equity investments in 3Q15. If included, 2016 Non-NII would decline by 17.5% yoy.

1/

INCOME/COST

LOANS/ASSET

QUALITY


1H17 net profit improved yoy and 2Q17 profit continued its good momentum

Profitability

1/ Net profit before impairment provisions, non-controlling interest, and taxes.

The 2.0% yoy growth in 1H17 net profit was largely driven by higher NII, higher fee income, and lower provisions. On a

qoq basis, the Bank can maintain reasonably good momentum of net profit in 2Q17.

Net Profit and Operating Profit1/

(Baht billion)

1H16 1H17 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17

23.4 23.8

10.5 12.8 11.5 12.7 11.9 11.9

42.5 39.4

18.1

24.4 21.4

17.8 19.7 19.7

-7.2% yoy

+2.0% yoy

-19.1% yoy

0.0% qoq

-7.1% yoy

0.0% qoq

OperatingProfit

NetProfit


In the first half of 2017, NII rose by 4.4% due mainly to loan growth of 5.8% yoy. On a qoq basis, 2Q17 NII growth of

1.0% was driven by loan growth of 0.9% qoq, despite a decline in loan yield from one-sided lending rate cuts in May

2017.

NIINII growth was driven mainly by moderate loan growth

1H16 1H17 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17

4.60% 4.35% 4.55% 4.51% 4.55% 4.57% 4.39% 4.34%

5.66% 5.41% 5.71% 5.63% 5.55% 5.59% 5.44% 5.40%

1.61% 1.46% 1.61% 1.58% 1.54% 1.56% 1.48% 1.46%

1.58% 1.40% 1.58% 1.52% 1.47% 1.49% 1.40% 1.41%

43.4 45.3

21.7 21.8 22.2 22.8 22.6 22.8

3.29%3.19% 3.24% 3.24% 3.33% 3.33%

3.21% 3.18%

2.5%

5.8%

0.3% 1.3%2.7%

1.4% 0.7% 0.9%

+4.4% yoy

+4.7% yoy

+1.0% qoq

Net Interest Income(Baht billion)

Yield on Earning Assets

Yield on Loans

Cost of Funds

Costs of Deposits

Net Interest Margin(NIM)

Loan Growth(%yoy)


Given continuous lackluster economic momentum, loan demand remains moderate in 2017

Credit Cycle

2.0%

5.8%

-10.0%

0.0%

10.0%

20.0%

30.0%

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017F

3.5-4%2

4-6%

Loan Growth(%yoy)

SCB Loan Growth

Global

financial crisis;

SCB tightened

credit

underwriting

standards

Outcome of

SCB’s market

share growth

strategies in

mortgage, auto

and SME segment

1/ In 2006, the Bank increased its holding in SCB Leasing (then Thai Panich Leasing PCL) from 37.6% to 95.5%.2/ SCB EIC’s estimation as of October 2017

Source: Bank of Thailand’s website (for sector loans growth)

SCB’s

acquisition of

SCB Leasing1/

and market

share gains in

SME segment

Sharply lower

loan growth as

a result of the

economic

slowdown

2017 SCB Loan

Growth Target

Banking Sector Loan Growth

Estimated Sector

Loan Growth by EIC


Corporate and retail segments remained key drivers for loan growth

Loans Breakdown1/ as at 30 June 2017

Corporate Loans1/ (Baht billion) SME Loans1/ (Baht billion)

Retail Loans1/

(Baht billion)

Loans1/

(Baht billion)

( ) : Loan breakdown as at 30 June 2016

Loans grew by 5.8% yoy and 0.9% qoq. This was contributed by the corporate and retail segments despite a decline in

SME loans. At the end of 2Q17, loan growth of 5.8% yoy remained in line with the Bank’s full year target of 4-6%.

1/ Including loans classified as NPLs2/ Mainly credit cards and unsecured consumer loans

Loan Growth

+5.8% yoy

+0.9% qoq

1,862 1,912 1,939 1,952 1,970

2Q16 3Q16 4Q16 1Q17 2Q17

+12.9% yoy

+1.7% qoq

654

703 712 726 738

2Q16 3Q16 4Q16 1Q17 2Q17

-1.5% yoy

-0.4% qoq

364 363 365 360 359

2Q16 3Q16 4Q16 1Q17 2Q17

SME18.2%

(19.6%)

Corporate37.5%

(35.1%)

Mortgage31.1%

( 32.0%)

Auto8.8% (9.0%)

Others4.5% (4.3%)

Retail44.3%

(45.3%)

Retail +0.8% qoq

Others2/ +3.1% qoq

Auto +1.0% qoq

Mortgage +0.5% qoq

+8.8% yoy

+2.7% yoy

+3.9% yoy

+3.5% yoy

596 602 607 609 612

167 165 169 172 173 81 79 86 85 88 844 846 862 866 873

2Q16 3Q16 4Q16 1Q17 2Q17


Provisions(Consolidated, Baht billion)

Troubled Debt Restructuring(Consolidated, Baht billion)

Asset QualityNPL ratio improved qoq, with relatively stable coverage ratio

NPL ratio stood at 2.65% in 2Q17, declining from 2.77% in

2Q16 largely from corporate segment. Meanwhile, NPL

coverage ratio rose slightly to 133.5% at the end of June

2017 and was above the Bank’s target of 130%.

In 2Q17, loan loss provisions amounted to Baht 5.0

billion, equivalent to credit cost of 102 bps, which was

adequate based on prudential provisions for future

uncertainty.

Coverage Ratio

Gross NPL %

Non-Performing Loans

(Baht billion)

57.1

61.4

57.6 59.6

61.2

2Q16 3Q16 4Q16 1Q17 2Q17

2.77% 2.85%2.67% 2.70% 2.65%

130.0% 128.9% 134.3% 133.4% 133.5%

+7.1% yoy

+2.5% qoq

2Q16 3Q16 4Q16 1Q17 2Q17

184 149 41 103 102

-41.1% yoy

+0.0% qoq8.5 7.0

2.0

5.0 5.0

Credit cost(bps)

NPL

PL

+13.9% yoy

-0.7% qoq

28.2 24.9 30.8 29.2 28.0

6.2 6.9

9.7 10.3 11.1 34.4 31.7

40.5 39.5 39.2

2Q16 3Q16 4Q16 1Q17 2Q17


Special Mention(Baht billion)

New NPL slightly increased due largely to SME segment

Special mention loans stood at Baht 45.8 billion atthe end of June 2017, a significant increase of 35.8%yoy, mainly as a result of the reclassification fromNPL to special mention loan of one large corporatecustomer in 4Q16. On a qoq basis, special mentionloans rose by 4.7% largely driven by housing loans.

In 2Q17, new NPL formation (gross) was at 0.45%, edgingup slightly from 0.41% in 1Q17, which was due mainly toSME’s new NPL.

Asset Quality

1/ Shows change vs 1Q16.Green / Red fonts indicate decrease / increase in new NPL formation as a % to total loans from the previous period.

2Q16 3Q16 4Q16 1Q17 2Q17

NPL% 2.77% 2.85% 2.67% 2.70% 2.65%

New NPL% 0.40% 0.50% 0.52% 0.41% 0.45%

NPL% 3.29% 3.36% 2.29% 2.27% 2.29%

New NPL% 0.00% 0.28% 0.18% 0.04% 0.03%

NPL% 5.08% 5.21% 6.37% 6.46% 7.22%

New NPL% 0.60% 0.70% 1.08% 0.60% 1.02%

NPL% 2.15% 2.42% 2.25% 2.62% 2.33%

New NPL% 0.65% 0.68% 0.61% 0.76% 0.70%

NPL% 1.85% 1.86% 1.83% 1.63% 1.72%

New NPL% 0.43% 0.40% 0.50% 0.41% 0.50%

Total

Loans

Auto

Loans

Corporate

SME

Mortgage

1/

+35.8% yoy

+4.7% qoq

33.7 36.0

44.6 43.7 45.8

2Q16 3Q16 4Q16 1Q17 2Q17


1H17 Non-NII declined yoy but fee income registered positive growth

1/ Other income includes income from equity interest in affiliated companies, dividend income, and other operating income.

Non-NII in the first half of 2017 decreased by 5.6% due to lower net insurance premiums and lower gain on investments

while net fee income and net trading and FX income increased by 5.7% yoy and 12.7% yoy, respectively. On a qoq

basis, non-NII in 2Q17 rose by 5.3% qoq from higher net trading and FX income, higher dividend income, and recovery

from insurance claims.

Non-NII

23.1 21.8

+49.9% yoy

+5.3% qoq

+6.0% qoq

-2.1% qoq

-20.5% qoq

1H16 1H17 2Q16 1Q17 2Q17

34.7% 32.5% 41.0% 32.0% 32.9%

26.7% 24.7% 34.1% 25.6% 23.8%

-5.6% yoy

-48.0% yoy

+5.7% yoy

-69.1% yoy

+12.7% yoy

4.1 2.1

6.0

1.2 0.9

13.7

14.4 6.6

7.3 7.1

3.1 3.4

1.4

1.7 1.8

15.1

10.6 11.2

Net Insurance Premium

Net Fee Income

Net Trading

and FX Income

Other Income1/

Gain on Investments

Non-Interest Income(Baht billion)

%Non-NII to Total Income

%Net Fee and Net Insurance

Premium to Total Income


In the first half of 2017, fee from mutual funds and bancassurance contributed to the 5.7% growth in total fee income.On a qoq basis, fee income declined by 2.1% qoq.

1/ Others include brokerage fee, fund transfer, remittance, etc.2/ GMTS stands for Global Markets and Transaction Services, which includes cash management, trade finance, corporate finance andcorporate trust.

Fee income in 1H17 continued to perform well Fee Income

Net fee income Breakdown

(Baht billion)

13.7 14.4 6.6 7.3 7.1

1H16 1H17 2Q16 1Q17 2Q17

Net Fee Income by Segment

Corporate 22% 21% 19% 21% 21%

SME 10% 8% 10% 8% 8%

Retail 68% 71% 71% 71% 71%

30% 27% 31% 27% 27%

16%15%

15%15% 16%

7% 8% 7%8% 9%

19% 24% 21% 25% 23%

12% 10% 10% 10% 10%

16% 15% 16% 15% 15%Others 1/

Loan related fee

Mutual fund

Bancassurance fee

GMTS 2/

Bank cards


Deposits rose significantly yoy mainly from low cost deposits

Deposits grew by 10.0% yoy, mainly driven by higher savings and current deposits. On a qoq basis, deposits rose by

1.6% resulting from higher savings deposits. Thus, the Bank’s CASA went up to 63.9% in 2Q17 from 62.5% in 2Q16 and

1Q17.

Deposits(Baht billion)

Deposit

Growth

-3.6% qoq

+4.3% qoq

-2.2% qoq

2Q16 3Q16 4Q16 1Q17 2Q17

Current & Savings Accounts (CASA)

62.5% 60.7% 59.7% 62.5% 63.9%

+10.0% yoy

+16.1% yoy

+12.3% yoy

+5.7% yoy

+1.6% qoq

702 743 816 759 742

1,110 1,087 1,149 1,195 1,246

59 58 62 71 69 1,871 1,887

2,026 2,025 2,057

Savings

Current

Fixed


L/D ratio was within the Bank’s comfortable level and liquidity ratio remained high

As loans grew by 5.8% yoy while deposits rose by 10.0%

yoy, the loan-to-deposit ratio declined to 95.8% at the

end of June 2017 from 99.5% at 2Q16.

Loan to Deposit Ratio

The Bank currently maintains a daily liquidity ratio of

20% or higher as measured by total liquid assets (at a

bank-only level) to total deposits. If the ratio falls below

20%, corrective action will be immediately considered.

Liquidity Ratio(Bank-only)

Liquid assets primarily comprise cash, deposits, bilateral repo with the Bank of Thailand and investment in government securities.

Liquidity

99.5%

101.3%

95.7%

96.4%95.8%

90%

92%

94%

96%

98%

100%

102%

104%

2Q16 3Q16 4Q16 1Q17 2Q17

27.6%

25.0%

28.8% 28.7%30.0%

19%

22%

25%

28%

31%

34%

37%

2Q16 3Q16 4Q16 1Q17 2Q17

20%

The Bank’s comfortable level (94-96%)


OPEX in the first half of 2017 increased by 15.3% yoy due to higher staff costs, higher marketing expenses as well as

higher premises and equipment expenses. The increase in cost income ratio to 41.3% in 1H17 was still within the full

year target range of 40-43%.

Cost EfficiencyHigher cost-to-income ratio was to support future growth

Operating Expenses and Cost-to-Income Ratio

Cost-to-Income

Ratio

Operating

Expenses

(Baht billion)

1H16 1H17 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17

24.0

27.7

11.5 12.5 12.8 14.8

13.5 14.3

36.1%41.3% 38.9%

33.9% 37.3%45.5%

40.6% 42.0%

+5.9% qoq

+14.0% yoy

+15.3% yoy


Tier 2

Common Equity Tier 1 / Tier 1

Capital Adequacy Ratio (Basel III)

1/ Excluding net profit for 1H17 in accordance with regulatory requirements. If included, the total capital ratio and CET1 capital ratio under Basel III on a

consolidated basis would have been 18.4% and 16.4% respectively, and on a bank-only basis would have been 17.9% and 15.8%, respectively.

The Bank believes that its strong capital position in excess of the regulatory minimum requirement, together with

adequate loan loss reserve coverage, are sufficient to help it withstand the impact of unexpected adverse events affecting

the Bank or the Thai economy. Moreover, with this solid capital position the Bank is well prepared to take up any future

growth opportunities.

With a strong capital position, the Bank is well poised to face future challenges and opportunities

2017 Regulatory

Minimum

CAR 9.75%

Tier 1 7.25%

1/

Capital Base

Consolidated

2Q16 3Q16 4Q16 1Q17 2Q17

Bank-only

CAR 17.2% 17.6% 17.4% 16.5% 16.8%

CET1/ Tier 1 14.2% 14.7% 14.5% 14.4% 14.7%

14.6% 15.0% 14.8% 14.7% 15.3%

2.9% 2.9% 2.9% 2.1%2.1%

17.5% 17.9% 17.7%16.8%

17.4%

1/


PageAgenda

Review of 1H17/2Q17 Results 3-151.

Economic Indicators and

2017 Strategy & Outlook

17-232.


Key driver estimates (%)1

GDP growth

Policy rate(end period)

Export USDgrowth

THB/USD(end period)

Loan growth(sector-wide)

2017F

3.6

7.0

1.50

33.5-34

Non-deposit wealth2

Deposit+BE(sector-wide)

8-10

3.5-4.0

3.5-4.0

2016

3.2

0.5

1.50

35.8

10.6

2.0

3.2

Recovery in exports helps the Thai economy to accelerate in 2017, while domestic consumers remain weak. Expect more investment activities in 2018.

1. %YOY except for policy rate (% per annum) and exchange rate (THB/USD)

2. Includes bonds, insurance, mutual funds, private funds, pension funds, and retirement funds

Source: SCB Economic Intelligence Center


Strategic roadmap towards our vision

Foundations

(Technology / People / Data / Process / Coverage)

Where we are

Revamp key foundations

and build new capabilities

for long-term sustainability

Transform existing business and

operating models to extend

performance and growth momentum

1

2

Paym

ents

Mo

bile

Ba

nkin

g

Bu

sin

ess

Inte

llig

ence

Sa

les-S

erv

ice

Se

pa

ratio

n

…… …

(2017)

To be the “Most Admired Bank”

Most PREFERRED partner

Most CARING employer

Most SUSTAINABLE RETURN company

Most RESPONSIBLE corporate citizen

Most PRUDENT bank

Consumer

shift

Technology

shift

Regulatory

shift

Shifts in banking

landscape


Be agile in adopting

new technology by

migrating to cloud-

based architecture

while leveraging

standard & Open

API

Apply smart

technologies (e.g.

Big Data Analytics,

Machine learning,

cognitive and AI)

to make better

business decisions

Uplift people

capability and

cultivate new

culture

Revamp

technology

architecture

Expand

customer

coverage and

touchpoints

Create competitive

advantage through

data/advanced

analytics

Overhaul

process to

create best-in-

class customer

journey

Cultivate new set

of people

attributes to strive

in the digital age

Overhaul people

capability through

SCB Academy

Adopt new

working culture

starting from top

management

walking the talk

Set up foundation

for advanced data

infrastructure

e.g., Data lake

and BI platform

Develop

organizational

capabilities and

cultivate data-

driven culture at

every level and

function

Create new customer

experience: “anytime,

anywhere”, “simple

& seamless”,

“insight & delightful”

Develop “own it – fix

it” mindset to

continuously improve

our processes

Expand

touchpoints

(physical and digital)

and introduce new

branch formats to

serve different

needs and lifestyles

Develop new

branch operating

model incl. sales-

services separation

‘SCB Transformation’ aims to revamp the Bank’s key foundations and build new capabilities for long-term sustainability

1


Example of SCB transformation initiatives to be launched/piloted in 20171

SCB EASY, a new lifestyle mobile banking application, with extensive digital

offerings that addresses customer’s daily needs

New merchant application with fully integrated POS to accommodate sales

management while adding flexibility with a convenient and secure payment system

New mobile banking and payment platform

Data lake and Business intelligence (BI) platform setup with capabilities building

through pool of data scientists and data culture by broaden organization

SCB Abacus, a wholly owned subsidiary of SCB, focusing on the development of

AI technology to enhance business efficiency and service quality

Business intelligence/ Data capability

Innovative learning center, equipped with state-of-art technology

Tailored training programs to prepare employees for digital age (the 1st credit

training program with >65% of employees have been trained)

SCB academy

Customized branch format to serve different needs and lifestyles of each

customer segment (> 20 centers to be launched by 2017)

New branch operating model including sales and service separation

New branch formats and operating model


Customers

Short-term

Long-term

the “Most Admired Bank”

Key performance indicators have been set with clear

responsible team and are monitored closely by the

Board of directors

2020 target has been set in line with our

vision for each stakeholder

Employees Shareholders

Society Regulators

Most

convenient

digital and

physical

coverage

Strong

training and

talent

factory

Leading in

customer

satisfaction

Larger, more

engaged

customer

base

Leading

tech

foundations

Foundation for

data driven

insights

Best daily

transaction and

service experience

2017 organization’s KPI

Targets have been set to ensure clear deliverable of SCB Transformation1


In parallel, we are transforming existing business and operating models to extend performance and growth momentum

2

Increase recurring income

base (e.g., insurance,

wealth management,

advisory businesses)

Proactively manage risk

and build sufficient buffer to

absorb volatility

Actively support Thailand’s

economic agenda

(e.g., National e-payment)

Leverage existing client

relationships especially

with large corporates to

win new businesses along

the clients’ value chain

Expand strategic

partnership and capture

arising inorganic-growth

opportunities


2017 Targets2017 Targets

(Percentage)

2015

Actual2016

Actual2017

Targets

ROE 15.9% 14.8% N.A.

ROA 1.72% 1.67% N.A.

Net interest margin 3.18% 3.27% 3.1-3.3%

Non-NII growth 15.7% -3.9% 3-4%

Cost/Income ratio 35.6% 38.7% 40-43%

Total loan growth (yoy) 3.2% 5.8% 4-6%

NPLs (gross) 2.89% 2.67% ≤3.0%

Coverage ratio 109.8% 134.3% ~130%

PROFITABILITY

1/ Including a one-time expense from a fraud case in 1Q15, prior to any recoveries, the substantial additional provisions in 3Q15, and one-time gains fromthe sale of equity investments in 3Q15. Excluding these items, the 2015 ROE and ROA would stand at 17.2% and 1.9%, respectively, and cost-to-income ratio would stand at 36.5%.

2/ Including the gain on the disposal of the Bank’s investment in its non-life subsidiary in 2Q14 and one-time gains from the sale of equity investments in3Q15. Excluding these gains, the 2015 non-NII growth would stand at 3.3% yoy.

3/ Excluding the large gains from the sale of equity investments in 3Q15. If included, 2016 non-NII would decline by 17.5% yoy.

1/

INCOME/COST

1/

1/

2/ 3/

LOANS/ASSET

QUALITY

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