Financial Highlights · 2017-11-17 · Communications Office Commercial Credit Group Retail Credit...

� A n n u a l R e p o r t 2 0 0 8

Financial Highlights

0

5

10

15

20

0.0%

3.0%

2.0%

1.0%

4.0%

2.29%

2.24% 2.55%

2.70%

2004 2005 2006 2007 2008

THB b

n

2.30%

Improved earnings capability Continued improved margin

Better cost income ratio Improved liquidity

Dec 50 Mar 50 Jun 51 Sep 51 Dec 51

80%

85%

90%

95%

100%

105%

105%

93%

95%

89% 90% 90%

87%

100% 99%

94%

-55

-45

-35

-25

-15

-5.0

5.0

-43.7

0.4

THB b

n

20082007

Net profit NII (LHS) NIM (RHS)

Cost to income Cost to income (exc. extra items)

154%

65%75%

62%

2007 2008

0%

50%

100%

150%

200% LDR LDR+ST borrowing

�T M B B a n k P u b l i c C o m p a n y L i m i t e d

(Unit : Million Baht) Consolidated Financial Statements Bank Only Financial Statements

2008 2007 2006 2008 2007 2006FinancialStatementInformation Total Assets 601,985 622,161 751,877 599,389 619,151 750,689 Total Liabilities 556,939 577,641 703,877 555,132 575,829 703,528

Shareholders’ Equity 45,046 44,520 48,000 44,257 43,322 47,161 Interest and Dividend Income 29,152 33,724 36,111 29,181 33,429 36,052 Interest Expenses 13,359 17,282 20,970 13,179 17,293 20,975 Net Interest and Dividend Income 15,793 16,442 15,141 16,002 16,136 15,077 Non-Interest Income 7,014 6,591 6,323 5,745 2,121 3,919 Fees and service 5,011 5,420 4,734 4,136 4,340 3,848 income Gain on exchange rate 951 1,095 787 940 1,115 788 Other income 1,052 76 802 669 (3,334) (717) Non-Interest Expenses 17,114 35,459 20,431 16,386 31,172 19,661 Non-interest expenses exclude 14,889 15,037 14,893 14,206 14,468 14,224 loss on impairment of assets/ goodwill and obligation from the transferred non-performing assets Total Income 36,166 40,315 42,434 34,926 35,550 39,971 Net Profit (Loss) 424 (43,677) (12,292) 289 (43,916) (12,515)

FinancialRatioNet Profit (Loss) to Total Income Ratio (%) 1.17 (108.34) (28.97) 0.82 (123.53) (31.31) Return on Equity (%) 0.95 (94.42) (24.77) 0.66 (97.07) (25.54) Return on Asset (%) 0.07 (6.36) (1.68) 0.05 (6.41) (1.71) Basic Earnings (Loss) Per Share (Baht) 0.01 (2.60) (0.86) 0.01 (2.61) (0.87) Diluted Earnings (Loss) Per Share (Baht) 0.01 (2.31) (0.75) 0.01 (2.33) (0.76) Book Value Per Share (Baht) 1.03 1.02 2.59 1.02 1.00 2.55 NPLs to Loans (%) 14.30 16.06 11.32 13.55 15.17 10.23

Net NPLs to Net Loans (%) 7.53 8.88 7.18 6.98 8.21 6.33 Capital Adequacy Ratio (%) 16.81 14.35 10.43 13.91* 14.43 10.44 * *Note: As required by BOT, the Bank only CAR ratio in 2008 includes the effect of using the Basel II approach.

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Credit CommitteeNomination, Remuneration

and Corporate Governance Committee

Board of Directors

Chief Executive Officer

Chief Retail BankingOfficer (CRBO)

Branch Banking Group

Retail Marketing Group

Wealth Management Group

Unsecured LendingBusiness Group

Secured Lending Business Group

Retail Banking Strategy & Key Projects

Business Planning & Analysis

Alternative Channels Group

Deposit & PaymentProducts Management

Chief SME Banking Officer (CSBO)

Chief Wholesale BankingOfficer (CWBO)

SME Business Marketing and Product

Group

SME Business Relationship

Management Group

Corporate Banking Relationship Management

Group

Lending & Structured Products Group

Transactional Banking Group

Capital Markets Group

Investment Banking Group

Credit Product

Corporate Marketing & Business Channel

Management

Corporate Portfolio and Profitability Management

11T M B B a n k P u b l i c C o m p a n y L i m i t e d 11T M B B a n k P u b l i c C o m p a n y L i m i t e d

February 16, 2009

Board of Executive Directors

Risk Management Committee

Audit Committee

Chief Risk Officer (CRO)

Strategy and Transformation

Group

Human Resource Group

Corporate Governance

Group

Corporate Communications

Office

CommercialCredit Group

Retail Credit Group

NPA Management Group

Market Risk Management

Group

Operational Risk Management

Group

Risk Analytics and Research

Group

Compliance Group

Legal Group

Credit Administration Dpt.

Chief Financial Officer (CFO)

Chief Operating Officer (COO)

Finance Group

Management Accounting

Group

Balance Sheet Management

Group

IFRS Reporting Project

Information Technology Group

Operations and Services Group

CorporateServices Group

Data Warehouse and Data Management Dpt.

Business Continuity Management Office

Audit Group

Organization Chart

TMB’s Directors As of December 31, 2008

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Dr. Sathit Limpongpan Age 58 years old Position at TMB - Chairman of the Board Education and - Ph.D.(Development Directorship training Administration), National Institute course of Development Administration (NIDA) - Master of Laws, Tulane University, U.S.A. - MA (Economics), Sukhothai Thammathirat Open University - Barrister-At-Law, Office of Law Study of The Thai Bar - Bachelor of Laws, Thammasat University - Leaders in Development : Managing Political & Economic Reform, Harvard University - Advanced Management Program, Oxford University - The Role of Chairman, Director Certification Program and Audit Committee Program, Thai Institute of Directors Association Position in other Businesses Apr 2008 - Present - Director and Chairman of the Audit Committee, Ratchaburi Generating Holding Plc. Apr 2008 - Present - Chairman, CAT Telecom Plc. 2007 - Present - Deputy Permanent Secretary, Ministry of Finance Working Experience in the Last 5 Years 2007 - Apr 2008 - Director, The Bangchak Petroleum Plc. 2006 - Feb 2008 - Director, CAT Telecom Plc. 2006 - 2007 - Director, Siam City Bank Pcl. 1995 - 2007 - Director, Kuang Pei San Food Products Plc. 2004 - 2006 - Director - General, Customs Department, Ministry of Finance 2000 - 2006 - Director/ Chairman, TOT Plc. 2002 - 2004 - Director - General, Excise Department, Ministry of Finance 2002 - 2004 - Chairman, Thailand Tobacco Monopoly

General Anupong Paojinda Age 59 years old Position at TMB - Director of the Board Education and - Master of Public Administration Directorship training (Honor), Directorship training course National Institute of Development Administration (NIDA) - Bachelor of Arts (Political Science), Ramkhamhaeng University - Command and General Staff College, RTA - Chulachomklao Royal Military Academy - National Defence College - Director Accreditation Program, Thai Institute of Directors Association Position in other Businesses Oct 2007 - Present - Commander - in - Chief Working Experience in the Last 5 Years 2005 - Aug 2008 - Chairman of the Audit Committee, Mida - Medalist Entertainment Plc. 2003 - Aug 2008 - Chairman of the Audit Committee, Mida Assets Plc. 2006 - Sep 2007 - Assistant Commander - in - Chief 2005 - 2006 - Commanding General, First Army Area 2004 - 2005 - Deputy Commanding General, First Army Area 2003 - 2004 - Commanding General, First Division, the King’s Guard

15T M B B a n k P u b l i c C o m p a n y L i m i t e d

Mr. Vijit Supinit Age 67 years old Position at TMB - Director of the Board - Chairman of the Audit Committee - Independent Director Education and - MA (Economics), Yale University, U.S.A. Directorship training - BA (Economics) (Honors), course The University of Manchester, U.K. - Southend College of Technology, U.K. - Faculty of Engineering, Chulalongkorn University - National Defence College - Senior Executive Program Certificate, Capital Market Academy (The Stock Exchange of Thailand) - Director Accreditation Program and the Role of Chairman, Thai Institute of Directors Association Position in other Businesses Apr 2008 - Present - Chairman, Office of the Securities Exchange Commission 2007 - Present - Dean, Graduate school of Management (MBA) Siam University 2006 - Present - Chairman, G Steel Public Co., Ltd. 2006 - Present - Advisor, Thai – Laos Association for Friendship 2005 - Present - Board member, Capital Market Development Fund Foundation 1998 - Present - Director, Institute of Social and Economic Policy 1993 - Present - Director, Wat Kaew Pichitre Foundation 1990 - Present - Director, Puey Ungphakorn Foundation Working Experience in the Last 5 Years 2006 - 2007 - Consultant, Bangkok Commercial Asset Management Co., Ltd. 2005 - 2007 - Chairman, The Stock Exchange of Thailand Foundation 2004 - 2007 - Chairman, Thailand Future Exchange Co., Ltd. 2003 - 2007 - Chairman, Asset Management Corporation of the Ministry of Finance 2003 - 2007 - Chairman, The Stock Exchange of Thailand 2003 - 2007 - Chairman, Thailand Securities Depositories Co., Ltd. 2003 - 2007 - Chairman, Set Trade.com Co., Ltd. 2003 - 2007 - Chairman, Family Knowhow Co., Ltd. 2003 - 2007 - Member, The National Corporate Governance Committee 2003 - 2006 - Director, Public Enterprises Supervisory Board 2003 - 2006 - Director, Small and Medium Size Enterprises Promotion Board

Mr. Philippe G.J.E.O. Damas Age 58 years old Position at TMB - Director of the Board - Chairman of the Executive Director - Member of the Nomination, Remuneration and Corporate Governance Committee Education and - MBA, Concentration Accounting & Directorship training International Finance, Columbia course University, U.S.A. - Military Service, Belgiam Army - Advanced Automatics, Ecole Nationale de I’Aeronautique et de I’Espace, Toulouse - Ingenieur Civil Electricien Mecanicien, Universite Libre de Bruxelles, Brussels Position in other Businesses 2005 - Present - CEO, Retail Banking Asia & Global Private Banking, ING Group (Singapore) Working Experience in the Last 5 Years 2002 - Dec 2008 - CEO, Global Private Banking and ING Trust, ING Group (Amsterdam)


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Dr. Juanjai Ajanant Age 60 years old Position at TMB - Director of the Board - Chairman of the Nomination, Remuneration and Corporate Governance Committee - Independent Director Education and - Ph.D. Economics, Temple University, Directorship training Philadelphia, U.S.A. course - M.Sc International Economics, University of Surrey, Guildford, U.K. - BA (Honors) (Economics), University of Lancaster, U.K. - Postgraduate Diploma International Economics, University of Surrey, Guildford, U.K. - Director Certification Program, Thai Institute of Directors Association Position in other Businesses 1994 - Present - Executive Director, Artlink Co., Ltd. Working Experience in the Last 5 Years May 2008 - Dec 2008 - Director, Industrial Estate Authority of Thailand 2007 - Mar 2008 - Managing Director, Chulalongkorn Unisearch Center 2004 - Mar 2008 - Director, Chulalongkorn Uniserach Center 1973 - Mar 2008 - Associate Professor, Faculty of Economics, Chulalongkorn University 2004 - 2005 - Chairman of Student Recruitment, Faculty of Economics, Chulalongkorn University Remark : Appointed as TMB director and the Chairman of the Nomination, Remuneration and Corporate Governance Committee on April 18, 2008

Mrs. Saowanee Kamolbutr Age 56 years old Position at TMB - Director of the Board - Chairman of the Credit Committee - Executive Director - Member of the Nomination, Remuneration and Corporate Governance Committee Education and - Master of Public Administration, Directorship training Thammasat University course - Bachelor of Public Administration, Thammasat University - National Defence College - Senior Executive Program (Kellogg - Sasin) - Senior Executive Program (SES 39) - The Management Development Program, Wharton School - Senior Executive Program Certificate, Capital Market Academy - Director Certification Program, Thai Institute of Directors Association Position in other Businesses Oct 2008 - Present - Inspector - General, Ministry of Finance Working Experience in the Last 5 Years 2004 - Oct 2008 - Member of the Board, Member of the Audit Committee and Chairman of Labor Relation Committee, Thailand Institute of Scientific and Technological Research (Tistr) 2007 - Sep 2008 - Principal Advisor on Performance Improvement, Ministry of Finance 2008 - Apr 2008 - Member of the Audit Committee, KTB Leasing Co., Ltd. 2004 - Apr 2008 - Director, KTB Leasing Co., Ltd. 2004 - 2007 - Deputy Director - General, Revenue Department 2002 - 2004 - Director, Bureau of Tax Collection Standards, Revenue Department Remark : Appointed as TMB director on April 25, 2008 and as the Chairman of the Credit Committee on May 14, 2008


Mr. Willem Frederik Nagel Age 52 year old Position at TMB - Director of the Board - Chairman of the Risk Management Committee - Executive Director - Member of the Credit Committee Education and - Master of Economics, University of Directorship training Amsterdam, Netherlands course Position in other Businesses Mar 2008 - Present - Chairman, ING Asia Private Bank Ltd. (Singapore) 2006 - Present - Commissioner, PT ING Securities Indonesia 2005 - Present - CEO & Head of Wholesale Banking, Asia, ING Bank N.V. (Singapore) 2005 - Present - Director, ING Vysya Bank Ltd. (India) 2005 - Present - Chairman of Risk Management Review Committee, ING Vysya Bank Ltd. (India) 2005 - Present - Director, ING Asia Private Bank Ltd. (Singapore) Working Experience in the Last 5 Years 2002 - 2005 - Head of Group Credit Risk Management, ING Group (Netherlands)

Mr. Nipon Poapongsakorn Age 60 years old Position at TMB - Director of the Board - Member of the Audit Committee - Member of the Risk Management Committee - Independent Director Education and - Ph.D. (Economics), University of Hawaii, Directorship training U.S.A. course - MA (Economics) (Honors), Middle Tennessee State University, U.S.A. - BA (Economics) (Honors), Thammasat University - Director Certification Program, Thai Institute of Directors Association Position in other Businesses Oct 2008 - Present - Chairman, Thailand Development Research Institute (TDRI) 2002 - Present - Board of Directors, Institute of Trade Strategy 1999 - Present - Public Information Disclosure Tribunal for the Public information on National Economy and Finance 1984 - Present - Visiting Professor of the Executive MBA Program and Mini MBA Program, Faculty of Commerce and Accountancy, Thammasat University Working Experience in the Last 5 Years 2006 - Sep 2008 - Dean Faculty of Economics, Thammasat University 2003 - Sep 2008 - Associate Professor, Faculty of Economics, Thammasat University 2007 - Feb 2008 - Director, Public Warehouse Organization Board 2006 - Feb 2008 - Director, Port Authority of Thailand Board 1998 - 2006 - Senior Consultant, The Sectoral Economic Program, TDRI 2001 - 2005 - Board of Directors, The National Economic and Social Development Board


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Mr. Vaughn Nigel Richtor Age 52 years old Position at TMB - Director of the Board Education and - BA (Honors) (Economics), South Bank, Directorship training London, U.K. course - Corporate Finance Diploma, London Business School - General Management Program Cedep, Insead, Fontainbleu (France) - Management in International Banking Cedep, Insead, Fountainbleu (France) Position in other Businesses 2006 - Present - Managing Director & CEO, ING Vysya Bank Ltd. (India) Working Experience in the Last 5 Years 2001 - 2005 - Chief Executive Officer, ING Bank (Australia) Ltd.

Mr. Amorn Asvanunt Age 60 years old Position at TMB - Director of the Board - Executive Director - Member of the Risk Management Committee - Member of the Credit Committee Education and - MBA, Bowling Green State University, Directorship training Ohio, U.S.A. course - BA (Accountancy), Chulalongkorn University - Stanford-NUS Executive Program, Stanford University and National University of Singapore - Changing Organizational Behavior Program, Wharton School, University of Pennsylvania, U.S.A. - Director Accreditation Program and CEO Performance Evaluation, Thai Institute of Directors Association Position in other Businesses Mar 2006 - Present - Member of the Audit Committee, Sahacogen (Chonburi) Plc. 2005 - Present - Independent Director, Krungdhep Sophon Plc. 2003 - Present - Member of the Audit Committee, I.C.C International Plc. 2003 - Present - Chairman of the Audit Committee, People’s Garment Plc. 2003 - Present - Member of the Audit Committee, Far East DDB Plc. 1988 - Present - Independent Director, BNH Medical Center Co., Ltd. Working Experience in the Last 5 Years 2003 - Mar 2006 - Chairman of the Audit Committee, Sahacogen (Chonburi) Plc. 1997 - 2005 - Director, Christiani & Nielsen (Thai) Plc. 1984 - 2004 - Director, T.L. and Sons Co., Ltd.


Mr. Christopher John King Age 64 years old Position at TMB - Director of the Board - Member of the Audit Committee - Member of the Nomination, Remuneration Corporate Governance Committee - Independent Director Education and - Bachelor of Laws (LL.B) (Honors), Directorship training University of Bristol, U.K. course - Postgraduate Practical Certificate in Law, University of Singapore - Director Certification Program, Thai Institute of Directors Association Position in other Businesses 1997 - 2004 - Partner and Director, Linklaters (Thailand) Ltd. Working Experience in the Last 5 Years 2005 - Present - Director, Singer Thailand Plc. 1992 - Present - Director, Thivatharn Ltd.

Mr. Boontuck Wungcharoen Age 52 years old Position at TMB - Director of the Board - Executive Director - Member of the Risk Management Committee - Member of the Credit Committee - Chief Executive Officer Education and - MBA, New York University, U.S.A. Directorship training - BCE, Chulalongkorn University course - Director Accreditation Program , Thai Institute of Directors Association Position in other Businesses 1982 - Present - Director, Benjaboon Enterprise Co., Ltd. Working Experience in the Last 5 Years 1999 - 2007 - First Executive Vice President, KASIKORN BANK Plc.


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Mr. Boontuck Wungcharoen Age 52 Years Chief Executive Officer Position - DirectoroftheBoardofDirectors - DirectoroftheBoardofExecutive Directors - MemberoftheBoardRisk ManagementCommittee - MemberoftheCreditCommittee - ChiefExecutiveOfficer (AppointedonJuly14,2008)Education - MBAinFinanceandInternational BusinessfromNewYork University,U.S.A - B.Sc.inChemicalEngineering fromChulalongkornUniversity - DirectorAccreditationProgram, ThaiInstituteofDirectors Association Working Experience in the Last 5 Years 2008–PresentChiefExecutiveOfficer,TMBBankPcl. 1982–PresentDirector,BenjaboonEnterpriseCo.,Ltd. 1999–2007 ExecutiveVicePresident, KASIKORNBANKPcl.

Mr. Bart F.M. Hellemans Age 53 Years Chief Risk Officer Position - ChiefRiskOfficerEducation - BachelorinAppliedEconomics, CatholicUniversityofLeuven, BelgiumWorking Experience in the Last 5 Years 2008–PresentChiefRiskOfficer,TMBBankPcl. 2005–2008 ManagingDirector,HeadCredit Capitals,INGBank,Amsterdam, TheNetherlands 2003–2005 ManagingDirector,INGVysyaBankLtd. 1999–2002 DeputyManagingDirectorandBBL representative,TheVysyaBankLtd.

Mr. Donald Joseph Koch Age 47 Years Chief Operating Officer Position - ChiefOperatingOfficerEducation - MasterinBankingandFinance fromUniversityofTechnology, Sydney,Australia Working Experience in the Last 5 Years 2008–PresentChiefOperatingOfficer,TMBBankPcl. 2006–2008 ChiefOperatingOfficer,INGVysya Bank,India 2004–2006 VicePresident,Memberof ManagementBoardDeputyChairman, INGBankSlaski,Poland

Mr. Ramakrishnan Subramanian Age 40 Years Chief Retail Banking Officer Position - ChiefRetailBankingOfficer (UptoFebruary28,2009)Education - MasterofCommerce,Madras University,India - BachelorofCommerce,Madras University,India - CharteredAccountant–The InstituteofCharteredAccountants ofIndia - CostAccountant–TheInstitute ofCost&WorksAccountantsof IndiaWorking Experience in the Last 5 Years 2008–PresentChiefRetailBankingOfficer, TMBBankPcl. 2007–2008 ManagingDirector,RetailBanking- Asia,INGBank,Singapore 2005–2007 RegionalDirector,GlobalConsumer Bank,AsiaPacific,CITIBANK,Singapore 1999–2005 SeniorVicePresident&CountryHead -RetailAssetsGroup,HDFCBank,India


Mr. Piti Tantakasem Age 38 Years Chief Wholesale Banking Officer Position - ChiefWholesaleBankingOfficerEducation - Ph.D.inStrategicManagement underthecollaborationprogram betweentheUniversityof NebraskaatLincolnandBangkok University - MasterofBusinessAdministration, TheUniversityofNorthCarolinaat ChapelHill - BachelorofEngineering(Industrial), ChulalongkornUniversityWorking Experience in the Last 5 Years Nov.2008–Present ChiefWholesaleBanking Officer,TMBBankPcl. Jan.2007–Jul.2008 FirstSeniorVicePresident, KASIKORNBANKPcl.

Mr. Sayam Prasitsirigul Age 39 Years Chief SME Banking Officer Position - ChiefSMEBankingOfficerEducation - MBAinFinancefromThePeter F.DruckerCenter–Claremont GraduateSchool,California,U.S.AWorking Experience in the Last 5 Years 2008–PresentChiefSMEBankingOfficer,TMBBankPcl. 2007–2008 FirstVicePresident,HeadofSupply ChainFinancingandHeadofCash ManagementDepartment, KASIKORNBANKPcl. 2006–2007 SeniorVicePresident,HeadofLocal ProductManagement,Standard CharteredBank(Thai)Pcl. 2003–2006 SeniorVicePresident,HeadofSupply ChainFinance,StandardChartered Bank(Thai)Pcl.

Mrs. Chandraleka Wiriyawit Age 55 Years Acting Chief Financial Officer Position - ActingChiefFinancialOfficer (FromJuly1,2008) - SeniorExecutiveVicePresident, HeadofFinanceGroupEducation - DoctorateDegreeinEconomics, ClarkUniversity,U.S.A.Working Experience in the Last 5 Years 2008–Present ActingChiefFinancialOfficer, TMBBankPcl. 2004–Present SeniorExecutiveVicePresident, HeadofFinanceGroup,TMBBankPcl. 2003–2004 SeniorExecutiveVicePresident, TMBBankPcl. 1995–2003 ExecutiveVicePresident, TMBBankPcl.

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Mr. Pradit Leosirikul Head of Branch Banking Group Mr. Sopon Kluaymai-Na-Ayudhya Head of BKK Branch Banking Group (until January 5, 2009) Mr. Vasan Choophaichitr Head of UPC Branch Banking Group (retired on December 31, 2008) Mrs. Kanchana Rojvatunyu Head of Retail Marketing Group Mr. Luecha Sukrasebya Head of Alternative Channels Group Mr. Willem Feyo Alexander Baron Van Heemstra Head of Secured Lending Business Group (appointed on March 5, 2009) Mr. Paphon Mangkhalathanakun Head of SME Business Marketing and Product Group Mrs. Vallapa Posyanond Head of SME Business Relationship Management Group Mr. Vikran Paovarojkit Head of Corporate Banking Relationship Management Group Mr. Sopon Kluaymai-Na-Ayudhya Head of Corporate Banking Relationship Management Group (since January 5, 2009) Miss Yiu Chung Mei Sandra Head of Lending and Structured Products Group (appointed on January 28, 2009) Mr. Silawat Santivisat Head of Transactional Banking Group (until March 31, 2009) Mr. Satian Tantanasarit Head of Capital Markets Group Mr. Siripong Sombatsiri (until December 31, 2008) Mr. Teerapong Ninvoraskul (appointed on February 18, 2009) Head of Investment Banking Group

Mr. Agapol Na Songkhla Head of Strategy and Transformation Group Mr. Thawatchai Techawatanawana Head of Human Resource Group M.L. Ayuth Jayant Head of Corporate Governance Group Mr. Paradai Theerathada Head of Corporate Communications Group (appointed on March 9, 2009) Miss Utoomphorn Kunakorn Head of Commercial Credit Group Mr. Martin Alan Searle Head of Retail Credit Group Mr. Surakiat Wongwasin (Acting) Head of NPA Management Group Miss Oranuj Tantimedh Head of Market Risk Management Group Mr. Surakiat Wongwasin Head of Operational Risk Management Group Miss Sutapa Amornvivat Head of Risk Analytics and Research Group M.L. Siriwan Kasemsant Head of Compliance Group Mr. Somsak Woravijak Head of Legal Group Mrs. Chandraleka Wiriyawit Head of Finance Group Miss Saipin Kittipornpimol Head of Information Technology Group Mr. Charan Mongkolchan Head of Corporate Services Group (retired on December 31, 2008) Mr. Peera Chinwannabutr Head of Audit Group

Executive Officers (Group Level)


Executive Officers (Department Level)

Branch Banking Group Mr. Amorn Sukhonpitumart BKK Branch Banking Region 1 Mr. Pichai Chirungsapprasuk BKK Branch Banking Region 2 Mrs. Thanita Vongruamlarp BKK Branch Banking Region 3 Mrs. Nuanwan Sanvises (until February 1, 2009) Mr. Vichien Vithayaveroj (appointed on February 2, 2009) BKK Branch Banking Region 4 Mr. Kitti Kokpol (until February 1, 2009) Mr. Choompong Hutananda (appointed on February 2, 2009) Northern Branch Banking Region Mr. Sompop Pookkapund Northeastern Branch Banking Region Mrs. Sakulrak Watanasitisin (until February 1, 2009) Miss Sukanya Dechjiratham (appointed on February 1, 2009) Central Branch Banking Region Mr. Suvit Vithayasai Eastern Branch Banking Region Mr. Vorayuth Charoenloet Southern Branch Banking Region Retail Marketing Group Mrs. Wacharaporn Mahadthai Marketing Operation Wealth Management Group Mr. Jittiwat Kantamala Private Banking Mrs. Nanda Sethi Affluent Relationship Management Miss Rachada Rukponspibul Wealth Management - Bancassurance Mrs. Naravadee Jaijongkit Wealth Management – Mutual Fund Alternative Channels Group Mr. Luesak Lohjitsieng Bureau de Change

Unsecured Lending Business Group Mrs. Waroon Soison (Acting) Credit Cards Mrs. Waroon Soison Personal Loan Secured Lending Business Group Mr. Willem Feyo Alexander Baron Van Heemstra (until March 5, 2009) Mortgages Business Deposit & Payment Products Management Ms. Tamara van den Ban Business Planning & Analysis Miss Kanokwan Tantivongskorn SME Business Marketing and Product Group Miss Mantinee Akarasern SME Marketing and Integrated Marketing Communications Mrs. Panicha Buraparat SME Sale Management and Support SME Business Relationship Management Group Mrs. Chulida Tanpetcharat SME Regional Office - Bkk 1 Miss Duangkamol Limpuangthip SME Regional Office - Bkk 2 Mr. Bunsak Sriprasertying SME Regional Office - Northern Mrs. Usa Subthavorn SME Regional Office - Migration and Retrofit Corporate Banking Relationship Management Group Miss Savitri Chaichavalit Corporate Banking Relationship Management 1 Mr. Suttichai Tiranuchit Corporate Banking Relationship Management 2

Mr. Jarin Pintusopon (appointed on February 3, 2009) Corporate Banking Relationship Management 3 Mrs. Nuanual Swasdikula (until December 31, 2008) Mr. Ekanat Kieatinapasin (appointed on February 3, 2009) Corporate Banking Relationship Management 4 Mr. Anuphun Tungsnga Corporate Banking Relationship Management 5 Miss Arpaporn Palungvitvatana Corporate Banking Relationship Management 7 Miss Tientip Narach Corporate Banking Relationship Management 8 Miss Yuwadee Chawawatnapong (until February 16, 2009) Corporate Banking Relationship Management 10 Mr. Kittipat Peanthum Corporate Banking Relationship Management 11 Mrs. Kalaya Chaiyawan Financial Institution Relationship and Global Network Management Transactional Banking Group Miss Ninlawan Jeeraboon Cash Management Department Mrs. Wadaporn Techasuwanna Trade Finance Department Mrs. Srisunan Dutiyabodhi Agent and Securities Services Department Capital Markets Group Mrs. Arunee Sinswas Capital Markets Product Sales Mr. Woraboon Chinwatanakit Capital Markets Product Trading Mr. Somchai Yongkrittaya Capital Markets Business Analytics and Supports

26 A n n u a l R e p o r t 2 0 0 8

Executive Officers (Department Level)

Credit Product Mrs. Pachana Rujirek Corporate Marketing and Business Channel Management Mrs. Chaowapat Lertwongsatien Corporate Portfolio and Profitability Management Miss Piyamas Aengkhumsub Strategy and Transformation Group Mr. Thawat Hirancharukorn Corporate Strategy Department Mrs. Ratanaporn Thepchatri Corporate Development Department Miss Sansanee Pangmanee Corporate Transformation Office Human Resource Group Mrs. Chuenjit Potranun Compensation and Performance Management Department Corporate Governance Group Mrs. Suchewin Chantrasuriyarat Business Principles and Governance Department Mr. Passakorn Linmaneechote Investor Relations Department Corporate Communications Group Miss Onticha Rattanawannathip Corporate Communications Office Commercial Credit Group Mr. Sunthorn Ruckpanich Corporate Credit Department 1 Mr. Kraisit Tanpaitoonditi Corporate Credit Department 2 Mr. Maarten Jurriaan den Otter Corporate Credit Underwriting Department Mrs. Nattaya Booncharoen Commercial Asset Management Department Mrs. Chariwan Chatikavanij SME Credit Department 1

Miss Chalaiporn Tharatip SME Credit Department 2 Mr. Sornchai Pongsuwan SME Credit Department 3 Mr. Somporn Limpworawon SME Credit Department 4 Mr. Franciscus Gerardus Rokers SME Credit Underwriting Department Mr. Jaroonsak Hengtragul Credit Policy Department Retail Credit Group Mr. Sithipong Narkvajara Small and Micro SME Credit Approval Department Mr. Sittibhan Supasornadiwat Consumer Credit Approval Department Mr. Niti Sirovetnukul Retail Collection Department Mrs. Anchalee Sekanandana Retail SAM Department Miss Somsri Likitpreeda Retail Credit Policy and Process Management Department Mr. Khajohnsak Argephul (Acting) Fraud Management Department NPA Management Group Mr. Sirichai Phirom NPA Sales Department Market Risk Management Group Miss Areerat Sulanchupakorn Market Risk Policies and Development Mrs. Nantapak Kaewkedthong Market Risk Support Operational Risk Management Group Mr. Apiwat Jariyavilas Operational Risk Management Department Mr. Bart Wilhelmus Roelofsma Information Risk Management Department

Pol. Col. Pavares Ganjanarintr Security Department Mrs. Harintorn Uthayopas Reporting and Support Department Mrs. Thientong Saenghiranwatana Internal Control Department Risk Analytics and Research Group Miss Wipaporn Techamaitrechit Credit Risk Management Department Mrs. Ratana Lengsiriwat Industry Analysis Mrs. Chamaree Ananatsiri Independent Credit Review Department Compliance Group Mrs. Nuntawan Suwannasri Banking Business Compliance Department Mrs. Haruthai Sukying Securities Business Compliance Department Legal Group Mrs. Vipada Kromplasak Legal Advisory and Documentation Department Mr. Somsak Khuncharoen (until February 1, 2009) Mr. Charoon Chaivichean (appointed on February 1, 2009) Litigation and Execution Department Mrs. Supanee Tharanon Legal Management Credit Administration Department Miss Puangpet Orankitvanit Finance Group Miss Supamas Woranantakul General Accounting Department Miss Nisa Laohasomboon Financial Reporting Department Mrs. Ruamporn Nanthawong Cost Management and Control Department


Management Accounting Group Mr. Kamran Rafi Performance Measurement Mrs. Voraluck Chokchaitam Management Reporting & Analysis Department Mr. Chanpichai Chinsamran Financial Application System Support Department Balance Sheet Management Group Miss Supaporn Taechachokewiwat Asset – Liability Management Department Mrs. Soontaree Rojanapenkul Liquidity Management Department Miss Pranee Chiemprabha Balance Sheet Management Support Department Information Technology Group Mr. Somsak Phokhawannakorn IT Infrastructure Department Mr. Surachai Manaso Information Security Department Mrs. Sunisa Lapruttanatrai Planning and Vendor Management Department Miss Ubolluck Luevoravinyu IT Development Department 1 Mr. Dhanis Klongnarong IT Support and Services Department Operations and Services Group Mr. Paichit Koamornsup Banking Services Department Mr. Pichet Triratanavanit Card Operations Department Mr. Prasert Thongpracharn Credit Operations Department Mrs. Waewdao Jirangpitakul Credit Registration and Insurance Operations Department Mr. Prakit Pilungasa Customer Information Monitoring and Management Department

Mrs. Vajira Ditsarapong Treasury and Markets Operations Department Miss Chayaporn Luannapavan Securities Services and Investment Banking Operations Department Mr. Thaworn Lohaviriyasiri International Banking Operations Department Corporate Services Group Mr. Kuasak Laorsuwan General Administration Group Mr. Uthai Monthawornwong Procurement Department Mr. Prasert Krongsaksree Premises and Building Management Department Mr. Phonglert Roeksasuttphairach Asset Appraisal Department Data Warehouse and Data Management Department Mr. Surin Matayatana Audit Group Mr. Buntoon Tohtong Branch Audit Department 1 Mrs. Tantila Pholpoke Branch Audit Department 2 Mr. Sorachoat Kuntiseth Credit Audit Department Miss Wanvipa Sringangam IT Audit Department Mr. Narong Preedanan Financial Market Audit Department Mr. Tipakorn Boonsuwan Professional Practices Management Department

28 A n n u a l R e p o r t 2 0 0 8

World Economic

Review 2008 and

Outlook 2009

World Economic Review 2008

TheIMFreportedthatworldeconomicgrowth

ratedroppedfrom5.0%in2007to3.7%in2008

following theeconomicslowdown in the leading

developedcountries.TheU.S.,theEuro-zone,and

Japan expanded only 1.4%, 1.2% and 0.5%,

respectively,downfrom2.0%,2.6%and2.1%in

2007duetosoaringworldoilpriceinthefirsthalfof

theyear,and theU.S. financialmeltdownwhich

quicklyspreadedintoEurope.Duringthecourseof

theyear,several large financial institutionswent

bankrupt,exacerbatingtheglobalcreditcrunchas

financialinstitutionstriedtopreservecashandhalt

theirlendingactivitiesaltogether.Theliquidityfreeze

culminated in a widespread global economic

downturnaffectingfinancialmarkets,stockmarkets

andrealsectors.Thisadverseenvironmentprompted

eachcountry’sgovernmenttoinjectmassiveamount

ofliquidityintotheeconomytoincreasebankcapital

reserve,inadditiontoprovidingloanguaranteefor

financial institutionstorestoretheprivatesector’s

confidence.Consequently, theFederalReserve,

theEuropeanCentralBankandtheBankofJapan

havesuccessivelycuttheirpolicyratesfrom4.25%,

4.25%,and0.5%,respectively,to0-0.25%,2.50%

and0.1%bytheendof2008.

With the industrializedeconomies, themain

exportmarkets,stalling,theoverallAsianeconomy

decelerated to8.3%growth in2008,down from

10.0%in2007.Theeconomicactivityinthelatter

halfof theyearshowsaclearsignofslowdown,

particularly in theexportsector.Thevolatilityof

capital flowsundermines the stability ofAsian

financialmarkets,sendingthestockindicestumbling

down.Moreover, the tightened credit condition

makesconsumptionandinvestmentloanincreasingly

moredifficult.

World Economic Outlook in 2009

According to the IMF’s report released in

November2008,theIMFforecaststhattheworld

economicgrowthin2009wouldslowdowntoonly

2.2%.TheU.S., theEuro-zone, and Japan to

contractedforthefirsttimesinceWorldWarII,by

T M B B a n k P u b l i c C o m p a n y L i m i t e d 29

0.7%,0.5%,and0.2%,respectively.TheU.S.will

shrinkinthefirstthreequartersoftheyearasthe

realeconomydeteriorates.TheEuropeaneconomy

willsufferfromsimilarfactorstotheU.S.economy

as the realsectorweakensand further financial

glitches unfold. Japanwill be heavily affected

by falling in export demand coupledwith the

strengtheningoftheyen.

Tobattlewith the economic and financial

downturns, the central authorities in themajor

industrializednations,especially in theU.S.with

Barack Obama leading the ef for t , push for

expansionarymeasures tobeenactedasswiftly

aspossible.These include large fiscalpackages

andunconventionalmonetaryoperations.These

measuresmaypavetheroadtorecoverybythe

latterhalfof2009.

AsfortheAsianregion,theIMFforecastsan

economicgrowthrateof7.1%in2009,downfrom

8.3% in2008.Themain factorscontributing to

World Economic Outlook

%

2007 2008 f 2009 f

World 5.0 3.7 2.2

US 2.0 1.4 -0.7

Euro 2.6 1.2 -0.5

Germany 2.5 1.7 -0.8

Japan 2.1 0.5 -0.2

Asia 10.0 8.3 7.1

China 11.9 9.7 8.5

India 9.3 7.8 6.3

SouthKorea 5.0 4.1 2.0

HongKong 6.4 3.7 2.0

Taiwan 5.7 3.8 2.2

Singapore 7.7 2.7 2.0

Indonesia 6.3 6.0 4.5

Philippines 7.2 4.4 3.5

Malaysia 6.3 5.7 3.8

Vietnam 8.5 6.3 5.5

Thai 4.8 4.5 4.0

Note:f=forecast

Source:IMF,asofNovember2008.

30 A n n u a l R e p o r t 2 0 0 8

theAsianeconomicslowdownincludedecreasing

global t rade volume and vanish ing fore ign

investments.Asmajor tradepartners descend

deeper into recession, export-oriented Asian

economies,suchasTaiwan,Singapore,HongKong,

andSouthKorea,willbeseverelyaffectedbythe

spillover.Withthewesternworldstilldisentangling

the financial cobweb, there remains the riskof

continuingcapitaloutflowscausingfurthervolatilities

andweakeningtheregionalcurrencies.

Thai Economic Review 2008 and Outlook 2009

Thai Economic Review 2008

In2008,Thaieconomyfacedseveralnegative

factorscontinuingfrom2007,includingtheunrestin

the threeSouthernborderprovinces, in inflation

duringthefirst7monthsoftheyear,thedomestic

political uncertainty, and the global economic

slowdown.Despitethesefactors,Thaieconomygrew

by5.7%inthefirsthalfof2008withthehelpoflow

basesfrom2007forconsumptionand investment

andthefavorableshiftintermsoftradefromrising

prices of commodities.Moreover, the robust

economicgrowthofAsiantradepartnerssuchas

Chinaand Indiaandstronggrowthofexports to

emergingmarkets contributed to theeconomic

expansionintheearlypartof2008.Exportsalone

expanded24.7%compared to16.7% from the

previousyear.

Theprivatesector’sconfidencedwindledinthe

latterpartof2008aspoliticalunrestinducedmore

violenceandthecentralgovernmentwasreplaced

twice.Thissignificantlydelayedthepublicbudget

disbursementandconsequentlypublic investment

projects.Thesedomestic factors, coupledwith

externaldemand’sdeterioration,began toweigh

down Thai economic growth. Globally,many

industrializedeconomiesentereda recession in

thethirdquarterof2008.Global factors, together


with theclosureof the twoBangkok’sairports,

causedThaitourismindustryanexportstoplungein

thefourthquarter.Frompreviouslygrowingbyan

averageof5.1%inthefirstthreequartersof2008,

Thaieconomycontractedsharplyby4.3%in the

fourthquarterandoveralleconomicexpansion in

2008was2.6%,sloweddownsignificantly froma

4.9%growthin2007.

Thai Economic Outlook 2009

Thailandisexpectedtogrowataslowerratein

2009thanin2008.Inparticular,theeconomywill

growtheslowestinthefirstquarter,sufferingfurther

fromtheglobalfactors.Risingunemploymentandan

expectedslidingofthecommoditypriceswilldirectly

weakenprivateconsumptionandexports.Positive

driverswillonlycomefromthenewgovernment,

whosepriority is tocombat theeconomicwoes.

Thegovernmentproposesaneconomicstimulus

packagetotalingBt115billion for2009mid-year

supplementary budget. The package includes

targetingaidtowardsthemost troubledeconomic

sectors,suchasrealestate,exports,andtourism,as

wellasusingtaxprovisionstostimulateconsumption

andinvestment.Withlowinflationarythreatsin2009,

theBankofThailandhascutitspolicyrate,whichwill

helpaccommodatetheexpansionaryfiscalpolicy.

Together,fiscalandmonetaryeasingwillhelpshoreup

32 A n n u a l R e p o r t 2 0 0 8

Thai Economic Estimates

% growth rate 2007 2008 f 2009 f

GDP growth 4.9 2.6 0.4

TotalConsumption 2.7 2.2 3.6

PrivateConsumption 1.6 2.5 2.5

PublicConsumption 9.2 0.4 9.7

Totalinvestment 1.3 1.1 -2.3

PrivateInvestment 0.6 3.2 -4.8

PublicInvestment 3.4 -4.8 10.2

Exports 7.1 5.5 -9.9

Imports 3.4 7.5 -10.2

TradeBalance(BillionUS$) 11.6 0.2 4.8

ShareofGDP 4.8 0.1 1.9

CurrentAccount(BillionUS$) 14.0 -0.2 2.6

ShareofGDP 6.1 -0.1 1.0

Inflationrate(%) 2.3 5.5 (-1)-(0)

Note:fisforecastedbyRARG,TMBBank,asofFebruary,2009.

the falteringaggregatedemand in theeconomy.

Itisexpectedthatthegovernment’sstimulusmeasures

willproducepositiveeffectsby theendofsecond

quartertouplifttheThaieconomyinthesecondhalfof

theyear.TMB’sRiskAnalyticsandResearchGroup

(RARG)forecastsinFebruary2009thatThaieconomic

growth in2009wouldbe0.4%and theheadline

inflationwouldcontinueataverylowlevelastheoil

price risk subsided.Nevertheless, if the global

economyentersadeeper recession thanexpected

anddomesticpoliticalunrestdisruptsthegovernment’s

stimulusactivities,theThaieconomymaygrowless

thanprojected.


Commercial Banking in

2008 and Competitive

Trends in 2009

Intheperiodsincethe1997financialcrisis,

Thailandhaswitnessedagreatreforminitsfinancial

sector.Regulatorymeasureshavebeenupgradedto

conform to internationalpractice, reinforcing the

stability of the financial institution systemand

increasing long-termcompetitiveness.Meanwhile,

commercialbankshavemadeimprovementstotheir

operations,accelerated thedevelopmentof their

competitiveness,andwelcomed foreignpartners

toenhancetheirstrengths.Allof thishasplaced

Thai commercial banks in a stronger position.

Yetthevolatileeconomyandfinancialenvironment

havecontinuedtotestthecommercialbanks’ability

toadjust.

In 2008 commercial bankingwas facing

significantchallenges,oneofwhichwasthesevere

global financial crisis which started from the

subprime problems in theUnited States and

eventuallyledtoliquidityproblemsformanyofthe

world’s leadingcompaniesandfinancial institution.

Thedirect impactonThai financial institutions’

investment in foreignassetswas limitedassuch

investmentsaccountedforonly1.3%oftheirtotal

assets,andliquidityintheThaifinancialsystemwas

stillsufficienttoaccommodatefinancialfluctuations,

withcommercialbankshavingexcessliquidassetsof

1.1trillionBahtabovewhatwasrequiredby law.

Yettheimpactontherealsector,i.e.theproduction

sector,fromthesluggishworldeconomybeganto

intensify.This, togetherwith thepressure from

politicalinstability,especiallytheairportclosuresat

theendoftheyear,ledtoandincreasingslowdown

intheThaieconomy.Consumptionandinvestment

visiblyslackened.Theresultwasaslowdowninloan

growthduringthelastquarteroftheyear,compared

totheloangrowthofover10%duringthefirsthalf

of the yearwhen increased demand for loans

accompaniedasharp increase in thepricesof

goodsandservices.

Overall, commercial banking in 2008was

characterisedbyahigh levelofcompetition for

deposits as each banks aimed tomaintain its

customerbaseandminimizetheliquidityriskafter

theDepositProtectionAgencyAct tookeffect in

August.Nevertheless,theextraprovisioningrequired

ofcommercialbanksundertheIAS39asmandated

byBOTdecreasedsharplycomparedtotheprevious

year.Thisfactor,andthehighgrowthperformance

34 A n n u a l R e p o r t 2 0 0 8

during the first half of the year, and improved

managementefficiency,werethekeyelementsthat

led tosignificantly improvedperformanceby the

listedcommercialbanks,withtheiraggregatednet

profit rising from3,134millionBaht in2007 to

76,092millionBaht.

As2009began, theworldeconomyandthe

Thaieconomywereseeingcontinuedslowdown.This

puttheoperationsofThailand’scommercialbanks

under greater risk, despite their considerable

strengths.Theaveragecapitaladequacyratiowasat

15%andexpectedtodroptoapproximately14%in

2009 following theBasel II implementation in

Thai land at the end of 2008. This was st i l l

considerablyhigherthantheminimumrequirement

and could provide some immuni ty f rom the

fluctuations inglobalmoneymarkets.Still, the

directionof commercialbankshasshifted from

focusingongrowthtosurvivingandminimizingthe

effectsofthisroundofeconomiccrisis.Thekeyissues

forcommercialbankingthisyearwillbecustomer

relations,especiallysmallandmediumsizedcustomers

thatarevulnerabletotheeconomicdownturn,credit

quality control, riskmanagement and liquidity

management.Competitionin2009isnotexpectedto

beintenseintermsofeitherdepositsorloans.


Withregardtoloans,mostbankshaveloweredtheir

loangrowthtargetfrom2008.Theemphasiswillbe

ongoodrelationshipswithexistingqualitycustomers.

Fordepositsandliquidity,despitemostbanks’high

liquidity that canmeet the demand for loans

--a resultof thecompetition to raisedeposits

throughspecialfixeddepositproductcampaignsin

thepreviousyear--itisstillessentialforbanksto

raisemoredeposits to increase liquidityandbe

preparedtocopewithabruptchangesintheglobal

moneymarketthatcanhappenatanytime.There

willbemoreshort-termproductsbecauseinterest

ratesaregoingdown.Atthesametime,therewillbe

highcompetitiontogenerateincomefromfeesfor

servicessuchasbancassurance,cashmanagement,

andfromservingasfinancialadvisorstocompensate

fortheimminentdecreaseininterestincome.

Ingeneral,2009willbeasignificantlychallenging

yearforthecommercialbankingsystem.Ifcommercial

bankscanmakeadjustmenttocopewithpressure

and revise theirbusinessstrategies todealwith

var iables such as loan qual i ty control , cost

management,andtheability tosustainprofitand

competitiveness, theywillbetakingastepfurther

towardbecoming strongand stable bankswith

potential tosustaingrowth,competitiveness,and

profitabilityinthefuture.

36 A n n u a l R e p o r t 2 0 0 8

The Bank’s main targets

in business operations

Main targets for 2009-2011

Towards its vision to be “the Leading Thai Bank with

World Class Financial Solutions”, TMB has set

the main targets for the initial three years 2009-2011,

as detailed below:

1. Market leadership

• Obtain deposit market share of 14% with 50%

contribution from savings and current deposits

• Be the main operating bank for our target

customers

2. Sustained profitability & shareholder return

• Gain 40% contribution from consumer banking

and 35% from non-interest income

• Generate total shareholders’ return within the top

quartile for Thailand’s financial services sector

3. Stakeholders’ satisfaction

• Achieve top tier customer satisfaction/

engagement level

• Ensure good corporate governance with good

ratings by regulators

• Build employee engagement and be the employer

of choice in the financial services sector


Key Strategic Focus for 2009

To achieve the main targets, the Bank has set its

strategic focus as follows:

1. Customer centricity: TMB builds its business

around three business groups: Wholesale, SME, and

Retail. Their unique requirements are further distilled

into seven customer segments. Since November 2008,

the Bank has implemented a new organizational

structure that focuses on understanding their needs,

developing customer value propositions, and delivering

these service in a way that allows the Bank to

continuously improve.

2. Deposit-ledgrowth: A critical element in building

market leadership for TMB is its deposit-led growth

strategy. With this strategic focus, the Bank will grow

the TMB franchise through deposit relationships with its

customers. Deposit-led growth will help TMB increase

its cross-selling and deepen the Bank’s share of wallet.

TMB’s strong transactional banking capabilities, such

as cash management and retail savings products,

contribute to support the strategy.

3. Service excellence: TMB focuses on creating

customer satisfaction and customer engagement as

the foundation to our long term growth. Starting in

2009, TMB will leverage a world class research

company to systematical ly measure customer

engagement across its touch points. This initiative

covers a comprehensive plan to upgrade the

capabilities of the Bank’s staff through training as well

as continuous interaction with each of its target

customer segments.

38 A n n u a l R e p o r t 2 0 0 8

Concerted teamwork drives performance


ING is a global financial institution of Dutch origin offering banking, investments, life insurance and retirement services to over 85 million private, corporate and institutional clients in more than 40 countries. With a diverse workforce of about 125,000 people, ING is dedicated to setting the standard in helping our clients manage their financial future. In the Asia Pacific region, ING Group is active in insurance, banking and asset management across 14 major economies. ING Retail Banking’s operations in Asia include a 16.07% stake in Bank of Beijing, China; a 44% stake in ING Vysya Bank, India. In December 2007, ING acquired a 30% stake in TMB Bank, marking its retail banking entry into Thailand. Making a difference at TMB The strategic investment provides ING with a unique opportunity to enter a major growth market in Asia. The partnership leverages ING’s expertise in retail banking and TMB’s superior distribution platform, thereby greatly enhancing the quality of service and breadth of financial products to be offered to TMB’s customers. When ING takes a strategic stake, ING devotes active management resources and expertise and works in close partnership with our retail affiliates to build sustainable growth. This means that beyond capital, ING also believes in providing critical resources to the partnership with TMB. We send key senior staff and direct substantial knowledge transfer

programmes, and replicate successful processes and systems into our partnership. At the most immediate level, ING has appointed senior, experienced executives in Retail Banking, Operations and Risk, and they form part of the core management under Khun Boontuck’s leadership to spearhead the transformation of TMB into a leading Thai bank, with strong financial performance, focused on customer-centricity. ING/TMB partnership going well, plan is on track and key milestones have been met Working in close collaboration with TMB, ING also brought strong capabilities in risk management, retail distribution, wholesale banking, private banking, product origination in insurance and mutual funds, operational & IT processes to help transform the bank into a leading Thai bank with international standards. Overall, integration activates at the operational level have progressed well in terms of functional alignment,business initiatives and bank transformation. The journey of turning TMB into a leading Thai bank requires teamwork on all fronts. It requires strong leadership and vigour in driving transformation, and the support of all employees to embrace a culture of change to become a high-performing, customer-centric bank. Only then can the entire organization col laborate as one, wi th understanding and commitment to a common vision of always putting the customers first.

About ING

40 A n n u a l R e p o r t 2 0 0 8

For Society

and the Environment

Corporate Social Responsibility

As a Thai company that employs nearly 10,000

people nationwide, TMB feels responsibility to give

back to the society in which operates by positively

contributing to the nation’s communities, institutions,

and individuals.

In 2008 TMB was involved in a number of

programs that benefited Thai society. These included

activities for youth, educational and religious activities,

along with activities to alleviate the hardship of needy

people and disaster victims throughout the country.

TMB also advocates conservation of the environment

and encourages Bank employees to participate in

constructive activities for society and the environment

organized regularly by the Bank. In addition, TMB Bank

coordinates with the public and private sectors to

promote energy and environment conservation as

well as to encourage entrepreneurs to operate their

businesses in an environmentally friendly manner.

Enriching Youth Knowledge 24th Young Investors Training Program

The 24th Young Investors Training Program

organized in 2008 attracted a record number of

applicants. Over 1,500 students from various higher

education institutions applied and 80 were accepted. At

the completion of the program, trainees were required

to prepare and submit their business plans to the

judges comprising qualified and experienced personnel

from the Bank. The Outstanding Business Plan Awards

were presented to those with exceptional achievements.

This annual program for third and fourth year university

students provides skills development and foundations

for business and investments to prepare them for their

future careers. To date, over 2,000 students have

participated in this program, with a large number now

operating successful small and medium enterprises.


2008 New Entrepreneur Creation (NEC) Program

Over the past seven years, TMB Bank, in support

of the government ’s pol icy to nurture new

entrepreneurs, has joined the “New Entrepreneur

Creation” training program initiated by the Department

of Industrial Promotion, Ministry of Commerce. This

program, implemented for new graduates, unemployed

persons, and heirs of business owners or those

aspi r ing to at ta in entrepreneurship, prov ides

prospective entrepreneurs with knowledge in project

analysis and sustainable and systematic business

operations while enhancing their creativity in setting up

new businesses. The program also emphasizes

business ethics and concern for the impact on the

environment. In 2008, three classes were organized for

120 selected participants. So far 37 classes have been

organized for over 2,900 trainees. The Bank has

extended special credit facilities to these trainees to

stimulate potential entrepreneurs and assist them to

actually achieve their business goals.

Support to Education Scholarships for Children of Military Personnel and

General Public

The Bank has offered scholarships to children of

military personnel for 45 consecutive years. These

scholarships are allotted to various military agencies

such as the Office of the Permanent Secretary of

Defence, the Royal Thai Supreme Command

Headquarters, the Royal Thai Army, the Royal Thai

Navy, and the Royal Thai Air Force, to be granted to

selected military children as they deem appropriate.

In 2008, 2,750 scholarships worth Baht 5,500,000 were

granted as the Bank realizes the importance of

education and the opportunities for these students to

pursue their education to their fullest potential. Children

of military personnel, who are key elements of national

security, especially deserve support to enable them

to achieve the highest possible level of education and

can take further steps toward a bright future and

eventually become an integral part of the nation’s

quality manpower.

42 A n n u a l R e p o r t 2 0 0 8

In 2009, TMB Bank also offered 50 scholarships

to undergraduate students studying in the finance/

banking related fields such as economics, business

administ rat ion, commerce, account ing, and

management science at state universities in Bangkok

and other provinces. Commencing in 1974, this

scholarship program has been ongoing for 34 years.

The Bank has a policy to continue with the program,

which aims at alleviating the burden of parents/

guard ians of students wi th h igh academic

achievements who are in need of financial support.

Other program objectives are to instill among students

an awareness of the significance of education and

self-development for a brighter and more secure future,

and to promote human resource development

in the country’s finance and banking sector.

Creative Activities to Promote Youth Development 27th Marching Band Contest

TMB Bank and the Office of Sport and Recreation

Development jointly organized the 27th Marching Band

Contest at the National Stadium on Children’s Day in

January 2008. This contest has been organized for 27

consecutive years. The objective is to encourage

students to develop their musical talents and learn

about concentration, discipl ine, teamwork and

sportsmanship. A total of 49 marching bands entered

the competition to win the Royal trophies of His

Majesty the King, His Royal Highness Prince Maha

Vajiralongkorn and Her Royal Highness Princess Maha

Chakri Sirindhorn and scholarships worth over

two million Baht. Since the first contest in 1981,

participating marching bands have always brought

international fame to Thailand.


Religious and Development Activities in the Public Interest TMB Bank Sponsoring Royal Kathin Ceremony

On 1 November 2008, TMB Bank sponsored the

Royal Kathin Ceremony (robe offering ceremony) at

Wat Nakhon Sawan, a royal temple at Pak Nam Pho

Sub-district, Muang District, Nakhon Sawan Province.

Directors, executives and employees of the Bank,

customers, government officials in the province, and

faithful Buddhists attended the ceremony. The Bank

also presented scholarships to five educational

institutions in the province, i.e. Nakhon Sawan School,

Satri Nakhon Sawan School, Nawamindarachudhit

Matchim School, Suankularb Witthayalai (Jiraprawat)

School Nakhon Sawan, and Nakhon Sawan Buddhist

Monks College.

TMB Helps Victims of Cold Weather

2008 marked the 25th year of the Bank’s effort to

organize activities for society by encouraging its

employees, customers, and the general public to

donate money to buy blankets for needy people during

the cold season. Recipients were villagers in remote

areas in the North and the Northeast who do not have

access to amenities. Blankets were allocated through

the Bank’s branches as in the past.

Energy Conservation and Environment Protection Reforestation Project in Honor of His Majesty the King

To create and preserve forest areas that

contribute to the long-term conservation of the

country’s important water sources and the reduction of

threatening global warming, TMB has joined the

reforestation project to commemorate the occasion of

the 50 th Anniversary of His Majesty the King’s

Accession to the throne. The project, which is under

the management and care of the Rajapruek Institute

Foundation, is divided into three phases: Phase 1

(2003-2007), Phase 2 (2006-2008) and Phase 3

(2007–2009). This is a sustainable reforestation

project in the country’s water source areas that

involves the planting of new trees and close monitoring

of the growth of planted trees in order to maintain the

fertile condition of the forests. In the long run this

project will also yield maximum benefits to nearby

communities and forests. The reforestation areas

under the Banks’ responsibility during Phase 2 are

located in the national reserved forest on the right bank

of the Nan River, in Ban Nam Tae, Ban Nam Lee and

Ban Nam Mun Villages, Ta Pla District, Uttaradit

Province and at Cho Hae Sub-district, Muang District,

Phrae Province.

44 A n n u a l R e p o r t 2 0 0 8

Energy and Environment Conservation Outreach

TMB Bank recognizes the importance of the

country’s industrial and economic development in

tandem with support for efficient energy and environment

management. In line with the government’s policy to

invigorate entrepreneurs, the Bank lends support to

their investment in energy conservation projects, which

in turn will help entrepreneurs to reduce energy cost,

increase revenues and returns on their investment, and

increase their trade competitiveness.

Moreover, the Bank serves as a mechanism of

the government in the management of environment

and energy funds and projects, and also provides a

channel for entrepreneurs throughout Thailand to seek

financial support from governments and international

organizations in the form of loans at special interest

rates and financial grants. Some of the Banks’

activities along this line include:

• Co-management of the Energy Conservation

Fund with the Ministry of Energy to provide loans for

energy conservation and alternative energy projects to

the manufacturing and service sectors. This includes

cooperation with agencies and experts to provide

advice to entrepreneurs on investment in various

technologies, and working with various agencies such

as the Institute of Industry Energy, the Federation of

Thai Industries, the Thailand Greenhouse Gas

Management Organization, the Energy for Environment

Foundation, and the Energy Conservation Foundation

of Thailand to support energy conservation investment

and activities.

• Cooperation with the World Bank, the Ministry of

Finance, and the Min ist ry of Industry in the

management of the Ozone Project Trust Fund to

ensure that all the commitments ratified by Thailand

as a member state of the Vienna Convention and

the Montreal Protocol are met. In 2008 a project was

implemented to mitigate and reduce the use of ozone

depleting substances among manufacturers of

f i re-retardants and garments, automobi le a i r

conditioner repair and maintenance shops, and

refrigerator and cooler repair and maintenance shops.

Over the past decade, the Bank’s role has been that of

finance management, having managed 49 financial

assistance projects. Over 4,000 entrepreneurs have


received financial assistance for modification and

replacement of equipment and machinery as well as

technical advice. So far over 800 million Baht has been

granted free of obligation. Moreover, the Bank also

serves as a channel to disseminate information on

ozone layer conservation to students and the pubic on

various occasions.

• Co-management of the Partnership Facility

Programme (PFP) with the Danish Embassy in

Thailand is another project undertaken by the Bank.

This is part of the special assistance program

implemented by the Danish Ministry of Foreign Affairs

to improve the environment in Thailand and increase

Thai entrepreneurs’ potential in receiving technology

transfer from Denmark, which is globally acclaimed for

technologies and products relating to energy and the

environment. The program offers funds of over 100

million Baht to subsidize selected partners. The goal is

for Thai-Danish partner companies to operate their

businesses for sustainable improvement of the

environment in Thailand.

TMB Bank is committed to creating and promoting

constructive activities for the benefit of Thai society,

making it a warm and happy community where people

live in a good and safe environment.

48 A n n u a l R e p o r t 2 0 0 8

Nature of business

Background

TMB Bank Plc. (“TMB” or “the Bank”) was established on November 5, 1957 at Mansion 2, Rajdamnern

Avenue in Bangkok. At that time, Field Marshal Saridi Dhanarajata was the Chairman of the Board of Directors

and Mr. Chote Guna-Kasem was the Bank’s President, and the Bank had a total workforce of 26. TMB’s initial

registered capital was Baht 10 million, divided into 100,000 shares, each with Baht 100 par value. Most of its

shareholders in the initial stage were military personnel both in and out of service. The year 1982 marked a

milestone of the Bank as His Majesty King Bhumibol Adulyadej graciously accepted TMB as a royal bank and its

registered capital had its first increase, from Baht 10 million to Baht 100 million. To expand channels for fund

raising, the Bank was listed on the Stock Exchange of Thailand (SET) on December 23, 1983 and transformed

into a public limited company in 1994.

Thai Military Bank Plc., DBS Thai Danu Bank Plc. and the Industrial Finance Corporation of Thailand

legally merged into TMB Bank Plc. on September 1, 2004. This merger has enabled the Bank to operate as

universal banking, with total asset of about Baht 602 billion as of December 31, 2008.

Throughout all its years of operation, the Bank has focused on quality improvement and expanding its

scope of services to boost its operational efficiency to international standards. Foreign consultants were hired to

build up the fundamentals for a strong retail banking service platform and a sound risk management system.

TBM also underwent an organizational restructure to expand its product development capability and distribution

channels. A Risk Management Unit and Corporate Governance and Compliance Unit were established, along with

the implementation of a core banking service system development project to enhance service levels.

In December 2007, TMB underwent a share capital increase of Baht 37,622 million by forming a new

business partnership with ING Group, a leading financial institution from the Netherlands. After recapitalization,

the Ministry of Finance held 26.1% and ING Group held 25.2% of the entire issued and offered shares of the

Bank. ING Group also held NVDRs (Non-Voting Depository Receipts) representing rights to TBM’s securities and/

or ordinary shares for 4.92% of the entire issued and offered shares of the Bank.

Significant changes and developments in 2008 There were many significant changes and developments at TMB during 2008. After the recapitalization,

the Bank’s management was restructured to increase the flexibility and suitability of TMB’s administration.

The Bank appointed a new chairperson of the Board of Directors, a new chairperson of the Audit Committee and

a new chairperson of the Board of Executive Directors. The committees of the boards were restructured with an


Who

lesa

le

Consumer

SME

Mass

3. Set guidelines for

customer value creation

1. Customersegmentation

Mid-income

Corporate

Muti-Corporate

MediumEnterprise

Affluent

SmallEnterprise

2. Understand customer

needs in all lifecycle stages

5. Follow up & determine

customer satisfaction results

4. Deliver products & services

with customer satisfaction

objective to oversee the Bank’s operations more efficiently. In addition, the Bank recruited a new Chief Executive

Officer (CEO), replaced top management with experienced executives including ING experts seconded to TMB,

restructured its organization, and reviewed its vision and business operation strategy. The Bank also received solid

support from ING Group.

The significant changes are as follows:

1. Vision and strategy

Following the entrance of the new strategic partner and a joint consideration and analysis by the Board

of Directors and the new top management of the Bank’s expected internal and external environment over the next

three to five years, the Bank has set a vision to be “the leading Thai bank with world class financial solutions”

under a “Customer Centricity the TMB Way” strategy. TMB has conducted a customer segmentation exercise

that will contribute to the creation of optimal value and the highest satisfaction for each customer segment.

Vision : To be the Leading Thai Bank with World Class Financial Solutions

Strategy : Customer Centricity the TMB Way

TMB has a mission to achieve this vision with a view to addressing mutual interests and encouraging

pride among all concerned parties, customers, shareholders/investors, and employees, as well as contributing to

Thailand’s economic and social development for sustainable growth.

50 A n n u a l R e p o r t 2 0 0 8

2. The Bank’s customers

In its corporate transformation effort towards a customer - centric organization, TMB has divided its

customers into seven segments based on their income as follows:

Income amount

1.Wholesale

1.1. Multi-Corporate Over Baht 5 billion/year

1.2. Corporate Baht 500 million - 5 billion/year

2.SME

2.1. Medium Enterprise Baht 50 million - 500 million/year

2.2. Small Enterprise Less than Baht 50 million/year

3.Retail

3.1. Affluent Over Baht 100,000/month

3.2. Mid-Income Baht 30,000-100,000/month

3.3. Mass Less than Baht 30,000/month

3. Organizational structure

The Bank underwent an organizational restructuring in alignment with its customer centricity strategy.

TMB has adopted the following principles to develop into a customer - centric organization:

• The organizational structure allows for individual employees and business/support units to clearly identify

their customers and assume full responsibility for ensuring customer satisfaction.

• The organizational structure enhances a teamwork environment to create customer satisfaction.

• Chief officers drive the development of guidelines regarding customer value creation. Under the new

organizational structure, the top management team is comprised of:

1. Chief Executive Officer (CEO)

2. Chief Retail Banking Officer (CRBO)

3. Chief SME Banking Officer (CSBO)

4. Chief Wholesale Banking Officer (CWBO)

5. Chief Risk Officer (CRO)

6. Chief Operating Officer (COO)

7. Chief Financial Officer (CFO)


BusinessSegment

Retail SME Wholesale

BusinessSupportGroup

Risk Management

Operations and Technology

Finance

Stategy and Transformation

HR Management

Communications and PR

Corporate Governance

SupportGroup

Organizational Structure

The new organizational structure will help to reduce the overlap between work units and enhance

the alignment between business units and support units, making the Bank more efficient.

4. Support from ING Group

Since ING Group became a TMB shareholder in late 2007, TMB has obtained a wide range of support

from ING Group, which has proven to be a strategic partner that strongly contributes to the Bank’s business and

customer value creation.

TMB receives support and coordination from ING Group in the following areas:

• Products and services

- Deposits and insurance

- Internet banking and telemarketing

- Wealth management

• Risk management

• Operations and technology

• Global network

• Marketing and branding

52 A n n u a l R e p o r t 2 0 0 8

Presently, the Bank serves as a selling agent for funds and unit trusts of ING Funds (Thailand) Co., Ltd.

and has offered bancassurance products in association with ING Life Ltd.

• The Bank has entered into a Bancassurance Product Distribution Agreement with ING Insurance Co.,

Ltd. (ING Life). Under this agreement, ING Life appointed TMB as a broker and distributor to sell its life and

health insurance products through the Bank’s branches. TMB started the distribution of the ING Life’s products on

May 15, 2008.

• The Bank has entered into Distribution Agent Agreement with ING Funds (Thailand) Co., Ltd. (ING

Funds) to sell and repurchase its unit funds and fund products through TMB’s branches. The Bank started

distribution of the ING Funds’ products on June 12, 2008.

In addition to the above business cooperation, a number of high-caliber senior executives from ING

Group have joined TMB to help drive the Bank to realize its vision of being the LeadingThaiBankwithWorld

ClassFinancialSolutions.

Business overview of the Bank

TMB is a universal bank offering services to wide spectrum of customers ranging from corporate

wholesale to retail and from transactional banking business all the way up to high-end investment banking services.

TMB’s commercial banking business is carried out in accordance with the provisions of Thailand’s

Commercial Banking Act, which covers the acceptance of deposits, rendering of credit facilities, money transfer,

issuance of guarantee and aval facilities, foreign exchange transactions, international remittance, issuance of

letters of credit, ATM card and credit card services, cash management service, custodian service, and telephone

banking service. The Bank’s core business is to render services and products to a variety of customer segments

such corporate, SME and consumer groups via TMB branches nationwide.

In addition, the Bank engages in other businesses relating to commercial banking as follows:

1. Investment banking business including financial advisory services, being a securities brokerage,

securities trading, underwriting of unit trusts (Limited BDU), debt instrument trading and underwriting, and being a

selling agent of securities, bondholders’ representative, registrar and providing custodian service.

2. Other businesses as permitted by the regulatory authorities, with the businesses carried out through

the Bank’s subsidiary and associated companies such as being an alliance partner with insurance companies,

being an insurance broker (Bancassurance), providing a securities business, rental and hire-purchase services,

and so on.


Investment value % of shareholding

Name Type of business

by cost method by TMB

as of Dec 31, 2008 as of Dec 31, 2008

(Bt. million)

Subsidiary companies

1. Phayathai Asset Management Co., Ltd. NPL and NPA management 3,870 100.00

2. Designee for ETA Contracts Co., Ltd. Infrastructure - 99.40

3. TMB Asset Management Co., Ltd Fund management 188 75.00

Total investment in subsidiary companies 4,058

Less Allowanceforimpairment (3,870)

Net investment in subsidiary companies 188

Associated companies

1. Siam Resort Fund Type 4 property fund 587 56.26

2. Thai Orix Leasing Co., Ltd. Leasing 383 45.96

3. Thai Business Fund 2 Type 4 property fund 247 32.00

4. Phayathai Property Fund Type 2 property fund 180 30.00

5. The Column Property Fund Type 4 property fund 638 29.90

Total investment in associated companies 2,035

Less Allowanceforimpairment -

Net investment in associated companies 2,035

Net investment in subsidiary and 2,223

associated companies

Business description of subsidiary and associated companies

As of December 31, 2008, TMB had invested in three subsidiaries, one associated company and

four property funds, as described below:

54 A n n u a l R e p o r t 2 0 0 8

• Phayathai Asset Management Co., Ltd. - Established by TMB to manage non-performing loans and

non-performing assets and relevant collateral transferred from the Bank to ensure optimum returns.

• Designee for ETA Contracts Co., Ltd. - Specially established under an agreement made between

a group of major creditors and Bangkok Expressway Plc. (BECL) to transfer to the creditors all rights under

the second stage expressway construction and the operating concession agreement signed between the

Expressway and Rapid Transit Authority of Thailand and BECL. Such transfer will take place in the event that

BECL fails to perform the obligations or defaults on any condition under the credit facility agreement. TMB, as the

security agent, is the company’s principal shareholder.

• TMB Asset Management Co., Ltd. - Engaging in fund management in compliance with the Securities and

Exchange Act and in investment management under the permission of the Securities and Exchange Commission.

• Siam Resort Fund - A property fund and right of claim (4th Fund) established to mobilize funds from

institutional investors, with the main objective to use the proceeds obtained from the sale of the unit trusts for

purchasing or renting property and generating benefits from such property, or for investing in the right of claim or

in other assets. Such investment is aimed at solving problems in the financial sector. It is a closed-end fund, with

MFC Asset Management Plc. as the fund manager. (In this respect, Siam Resort Fund is not included in the

Bank’s consolidated financial statements as the Bank does not have the controlling power to set out the Fund’s

financial and operational policies.)

• Thai Orix Leasing Co., Ltd. - Providing leasing and hire-purchase services for office equipment,

machinery and vehicles.

• Thai Business Fund 2 - A property fund and right of claim (4th Fund) established to mobilize funds from

institutional investors, with the main objective to use the proceeds obtained from the sale of the unit trusts for

purchasing or renting property and generating benefits from such property, or for investing in the right of claim or

in other assets. Such investment is aimed at solving problems in the financial sector. It is a closed-end fund, with

Krung Thai Asset Management Plc. as the fund manager.

• Phayathai Property Fund - A property fund (2nd Fund) aimed at solving problems in the financial sector,

with the main objective to use the proceeds obtained from the sale of the unit trusts for purchasing or renting

property or investing in the right of claim arising from the business operation of a financial institution with property

placed as collateral, and generating benefits from such property or right of claim. It is a closed-end fund, with

TMB Asset Management Co., Ltd. as the fund manager.

• The Column Property Fund - A property fund and right of claim (4th Fund) established to mobilize funds

from institutional investors, with the main objective to use the proceeds obtained from the sale of the unit trusts

for purchasing or renting property and generating benefits from such property, or for investing in the right of claim

or in other assets. Such investment is aimed at solving problems in the financial sector. It is a closed-end fund,

with MFC Asset Management Plc. as the fund manager.


Business Consolidation Policy

TMB segregates the business activities of its group members in accordance with the Bank of Thailand’s

consolidated supervision regulation, which calls for a bank’s setting up of a financial business group. The financial

business group consists of member companies divided into two categories, based on the bank’s ownership

portion and type of business, as follows:

1. Solo consolidation comprising subsidiary companies serving as credit institution in which the bank owns

75% or more of the individual companies’ issued and paid-up shares, and with its management under supervision

of the bank.

2. Non-Solo consolidation comprising companies engaging in the financial business and businesses

supporting the bank’s operations, as follows:

• Financial business group consisting of subsidiary companies conducting financial business in which the

bank owns 50% or more of the individual companies’ issued and paid-up shares, including affiliated companies

engaged in credit provision in which the bank holds between 50% and 75% of the issued and paid-up shares.

• Supporting business group consisting of subsidiary companies conducting businesses that support the

bank’s operations in which the bank holds 50% or more of the individual companies’ issued and paid-up shares.

Commercial banks in Thailand are not allowed to own more than 10% of any other company without the

specific consent of the Bank of Thailand (BoT). Under the BoT’s Consolidated Supervision Policy, TMB applied for

and on September 30, 2008, obtained approval from the BoT to establish a financial business group. TMB intends

to hold and invest in those companies with a view to enabling the Bank to render a universal banking service to

its customers. As for other subsidiaries whose businesses are not related to the financial business group and hold

more than 10%, TMB will gradually divest its investments when the price is reasonable but within the time limit for

the holding set by the BoT.

56 A n n u a l R e p o r t 2 0 0 8

TMB Bank Plc.

Solo consolidation Non-Solo consolidation

Phayathai Asset

Management Co., Ltd. Financial business

TMB Asset

Management Co., Ltd.

Designee for ETA

Contracts Co., Ltd.

Thai Orix Leasing Co., Ltd. (TOLC) (Note: TMB has asked for BoT’s permission to include TOLC in the group due to TMB’s plan to hold more shares in the future.)

100%

99.40% 45.96%

75%

TMB group structure chart

Remark : There are no persons in the Bank that may have conflicts of interest, holding share in the subsidiary or associated companies of more than 10% of the shares sold of such subsidiary or associated companies.

The Bank’s subsidiaries are classified based on this group structure as shown in the chart below:

Supporting business


Income structure TMB’s income structure consists of interest and dividend income and non-interest income. Details are in

the following Income Structure Table, which shows the Bank’s consolidated financial statements for the

accounting years ended December 31, 2006-2008:

Unit: Bt. Million

Accounting year ended December 31, Income structure

2008 % 2007 % 2006 %

Interest and dividend income

Loans 24,150 66.8 29,180 72.4 30,886 72.8

Interbank and money market items 1,581 4.4 756 1.9 1,127 2.7

Investments 3,421 9.5 3,788 9.4 4,098 9.7

Total interest and dividend income 29,152 80.6 33,724 83.7 36,111 85.1

Non-interest income

Gain (loss) on investments (353) (1.0) (831) (2.1) 77 0.2

Share of profit (loss) on equity 465 1.3 282 0.7 216 0.5

Fees and service income

- Acceptances, aval and guarantees 524 1.4 649 1.6 628 1.5

- Others 4,487 12.4 4,771 11.8 4,105 9.7

Gain on exchange 951 2.6 1,095 2.7 787 1.9

Gain on sale of assets 626 1.7 - - 171 0.4

Other income 313 0.9 626 1.6 338 0.8

Total non-interest income 7,014 19.4 6,591 16.3 6,323 14.9

Total income 36,166 100.0 40,315 100.0 42,434 100.0

58 A n n u a l R e p o r t 2 0 0 8

Description of services

TMB’s business operations

TMB’s core business activities include corporate banking services, SME banking services and retail banking

services under which the Bank offers a variety of products and services. The Bank is dedicated to developing new

and innovative products and services to serve this broad customer base, many of which are delivered to relevant

target customer segments via an extensive branch banking network.

Wholesale Banking Group

The Bank offers a wide spectrum of financial services to blue chip and other large corporate banking

customers. Key products and services for corporate banking customers include medium to long-term funding,

working capital financing, bank guarantees, trade financing, syndicated loans, correspondent banking and cash

management. The Bank also provides investment banking services such as financial advisory services,

underwriting debt securities and other investor services. Following a review of its largest corporate banking

customers in 2008, the Bank now offers a more directed menu of products and services to its corporate banking

customers. In particular, TMB has rationalized its internal working process and now offers a one-stop service.

This enables corporate banking customers to apply for credit or financial services via a single relationship

manager who has detailed knowledge of the Bank’s products and services and who can serve the customers’

needs in a timely manner.

From December, 2008, the Bank defines corporate banking customers as entities that have total annual

revenue of Baht 500 million or more. As of December 31, 2008, corporate banking customers constituted 45.1%

of TMB’s total loan portfolio, amounting to Baht 191,163 million.

The key financial services that TMB provides to its corporate banking customers are described below.

• Project and Corporate Finance

TMB provides medium and long-term loans (i.e., loans with a duration of three to seven years) for

corporate and project finance. Project financing is provided to companies in the manufacturing, construction and

service sectors. Project finance is usually provided in Baht but may be made available in foreign currencies as

needed. Interest is charged at either a fixed or a floating rate. Corporate finance is offered to corporate banking

customers based on the Bank’s appraisal of the quality of management, industry, prospects, business model and

financial strength of the firm, including the quality of security of the Project.


TMB believes that the current market climate in Thailand provides opportunities to increase its

infrastructure lending. Large infrastructure projects in Thailand benefit from some form of Government support.

The Bank provides project and infrastructure finance to private projects as well as Government projects.

• Working Capital

The most common forms of working capital financing are cash credit, working capital loans and overdraft

facilities. These loans are funded facilities usually secured by working capital assets. In most cases, facilities are

subject to an annual review. Interest is collected on a monthly basis, based on daily outstanding amounts and

typically charged at a floating rate.

• Guarantees

Guarantees, which also include stand-by letters of credit, can be drawn down in a revolving manner over

the life of the facility. Guarantees are issued for various purposes such as bid bonds, performance guarantees on

behalf of borrowers for execution of contracts, deferral/exemption from payment of statutory duties against

performance obligations, advance payments, release of retention money and other purposes. TMB also provides

shipping guarantees as part of its trade finance operations.

The term of the Bank’s guarantees is generally 12 months or less, although certain guarantees with a

longer term may be approved. As of December 31, 2008, TMB’s outstanding loan guarantees amounted to Baht

41,744 million.

• Trade Finance

Trade finance is one of the Bank’s primary growth products and a major focus area of its business.

TMB offers trade finance products and services to both its corporate banking and SME customers and has

established trade finance centers within its branch network. Trade finance products are offered as standardized

products but may be tailored to match the specific needs of corporate customers. The Bank provides a wide

range of trade finance products to facilitate the trading operations of Thai companies and multi-national

corporations, including:

- Lettersofcredit: The Bank issues letters of credit for the purchase of goods, machinery and

raw materials from overseas and provides financing as needed. As of December 31, 2008, the Bank’s

documentary credit portfolio was approximately Baht 27,691 million.

- Trustreceiptfinancing: The Bank offers bridging loans against trust receipts for underlying

trade transactions (covering both domestic and international goods purchases) until the sales proceeds are

available to settle the loans.

- Shippingguarantees: TMB issues shipping guarantees to facilitate import transactions in the

event that necessary documents have not been received.

60 A n n u a l R e p o r t 2 0 0 8

- Packingcredit: TMB provides export financing to be used as working capital both pre and

post shipment, provided that the customers will use the proceeds derived from the sale of goods to repay loans.

- ExportBillsforcollectionandBillpurchased/discounted: TMB provides collection services

as well as purchasing bills.

- Forfaiting: TMB launched its forfaiting service as another method of providing cash up-front to

exporters. The Bank discounts international trade receivables, including letters of credit, on a non-recourse basis.

- Tradecredit insurance: TMB has entered into agreements with leading world-class

international and trade insurance providers to allow it to offer trade credit insurance together with working capital

finance to its valued customers.

- Internetbanking: Trade finance services, including the issuance of letters of credit, are

offered to the Bank’s online customers via TMB BizDirect.

TMB is also planning to introduce factoring services under which it will purchase the receivables of

exporters by accepting the transfer of exporters’ claims in order to provide them with cash up-front.

• Loan Syndication

TMB has developed significant syndication capabilities while structuring and arranging large corporate

and project finance transactions. The Bank seeks to leverage these syndication capabilities to arrange project

and corporate finance for its corporate banking customers. The Bank still provides facility agent and security

agent services to groups of creditors to earn fee income.

• Investor Services

TMB provides a variety of investor services to its institutional customers in general, both domestic and

overseas. These services include bondholders’ representation, registrar and paying agency services, fund

supervisory for mutual funds and custodian/sub-custodian services for private and provident funds, safekeeping,

fund administrative, fund registrar and escrow agency services and other services as permitted by governmental

authorities.

SME Banking Group

The development of Small and Medium Enterprises (SMEs) is a key strategy to stimulate the Thai

economy while government and the private sector are focusing on encouraging the growth of SME businesses.

TMB has been aware and always supported SME business as they are major area of business and key revenue

generating base for the bank.

As of December 31, 2008, SME credit outstanding constituted Baht 165,459 million, representing 39% of

TMB’s total loan portfolio. To concentrate more on SME banking, TMB established SME Banking Group in 2008

to gain a better understanding of SME customer needs and behaviors to be able to provide them with more

relevant and targeted products and services.


TMB classifies the SME market into two segments by sales volume.

• SmallEnterprise is defined by annual sales volume not exceeding Baht 50 million.

• MediumEnterprise is defined by annual sales volume of over Baht 50 million but not exceeding

Baht 500 million.

In 2009, the Bank will concentrate on expanding its SME customer base and increasing revenue from

new and existing SME customers. TMB aims to be on of the top-ranking brands in SME customers’ minds by

efficiently supporting their day-to-day business operations with packaged financial products and services that

matched their needs and are tailored to the unique requirements of a small business.

To strengthen customer relationships, TMB is focusing on a deeper understanding of customer to define

customer behaviors and needs in greater detail. This will allow TMB to develop products and services that really

suit SME customer needs while reducing cost for the Bank and building a loyal, long-term customer base. TMB

plans to offer both transaction related and credit packages together with value-added services in form of a

completed, customer-tailored package. For existing customers, - The Bank will increase the number of main

operating accounts for existing customers by increasing the number of financial transactions, while attracting new

customers by offering trial programs. TMB will provide a variety of credit programs that are specifically designed

for each sub-segment. The key element to acquire new customers and retain existing customers is a streamlined

and improved credit process that is more predictable and reliable. By creating a new standard of service for

TMB’s SME Banking Group, the Bank will be able to build a quality portfolio.

Dedicated Relationship Managers offer SME customers rapid financial and advisory services, supported

by a SME zone office. TMB has established 37 SME zone offices throughout the country to get closer to SME

customers. In 2009, the Bank will set up six SME Regional offices and expand the network to 50 SME Zone

offices with 700 member of the Relationship Management team ready to serve SME customers in all areas.

TMB’s branch network is a key channel for SME customers in terms of regular contact and transaction

services. The Bank will serve its SME customers through the 470 branches currently operating nationwide.

To further develop its SME business in Thailand, TMB will co-operate with government departments to

conduct training courses for new entrepreneurs. The Bank considers this a social responsibility program, as it will

help increase SME competitiveness and enable them to sustain their business over the long term. Some of the

key projects under this initiative are:

• NewEntrepreneursCreation(NEC) in cooperation with Department of Industrial Promotion, Ministry

of Industry. During the last six years this program has run, The Bank has given knowledge to more than 2,800

new entrepreneurs all over the country.

62 A n n u a l R e p o r t 2 0 0 8

• YoungInvestorProgram(YIP), a course which targets senior students who aim to be entrepreneurs.

More than 2,500 students have graduate from this program.

In recent years, TMB has contributed to social responsibility by coordinating with partners including

government departments, state enterprises, and NGOs through various projects and activities related to

environmental protection such as:-

• OzoneProjectTrustFund(OTF): The World Bank provides funding to SMEs to adjust or change their air

conditioning systems to reduce the impact on earth’s ozone layer. TMB manages the project and has coordinated

program implementation with over 4,000 SME businesses.

• PartnershipFacilityProgram(PFP):In cooperation with the Danish Embassy, TMB manages the project

and gives consultation to business to help them protect environment or reduce energy consumption through

initiatives such as bio mass absorption chillers and energy saving houses.

In 2009, the bank will continue giving back to society by encouraging SMEs to run their businesses in an

environmentally-responsible way by supporting them with knowledge, finance, and technology.

Retail Banking Group

TMB has defined its vision to be “the leading Thai bank with world class financial solutions” and is

undergoing corporate transformation under a strategy of “Customer Centricity the TMB Way.” For its Retail

Banking Group, TMB has introduced an array of deposit and financial products such as home loans, personal

loans, welfare loans, and credit card loans. A network of 470 branches and 1,946 ATMs throughout Thailand

facilitate the customers’ use of and access to our products and services. The Bank, has developed branch

transformation initiatives that include strategic channel expansion, improved service excellence and efficiency,

and extensive staff training and development. Despite the economic slowdown in the past year, TMB expanded

its branch network and service channels with TMB Internet Banking, TMB M-Banking and a Call Center (1558) to

continually enhance customer services. In addition, TMB has organized ongoing marketing and sales promotion

campaigns to strengthen relationships with existing customers and acquire new ones.

To respond to the true needs of customers and ensure the highest degree of satisfaction, the Bank’s

customer segmentation approach has divided Retail Banking customers into three major groups: Affluent, Middle

Income, and Mass.


• Consumer Credit

TMB has offers a wide variety of consumer credit products such as home loans, personal loans and

credit cards, The Bank’s consumer credit portfolio as of December 31, 2008 accounted for Baht 67,583 million,

representing 15.9% of TMB’s total loan portfolio. These products are delivered directly to customers through the

Bank’s branch network. For home loans, the Bank has developed secured loans and adopted strategies to satisfy

all categories of customers who want to have their own home. These strategies include an offer of interest rates

that match customer demands, a longer repayment term, faster service, a larger sales force, and special

privileges granted upon credit approval and utilization. TMB will continue to seek new approaches to serve an

ever-expanding range of customer’ requirements.

The Bank charges special interest rates based on each type of home loans, consisting of the TMB

Easy Home Loan which is intended for general housing estate projects and the TMB Premier Home Loan which is

for projects by SET-listed developers and projects financially supported by the Bank. The interest rates are also

classified by the type of properties, whether a land and house or a condominium.

In addition to the distinct features of the individual products to satisfy all customer segments, TMB also

attracts customers to use our services with efficient sales teams who give quick, one-stop service to customers

such as information on special interest rates clearly determined by customer segments, a document pick-up

service, and fast credit analysis for prompt approval.

Therefore, by using our services, customers not only will obtain a home loan, but also can access a

one stop financial solution. Once they have maintained a loan account, they can open a savings account that is

entitled to a higher-than-usual interest rate. Also, by using our direct debit service for public utilities bill payment,

customers will also receive a higher-than-usual interest rate on their savings.

The Bank has developed unsecured personal loan products such as TMB Ready Cash, TMB Cash-2-Go

and TMB Balance Transfer. Sales campaigns for these products have been launched continually to diversify into

a new customer base while retaining the existing one. To boost its loan portfolio, the Bank will expand credit lines

for customers with good payment records and offers welfare loans to employees of state enterprises, government

agencies and private entities that used its payroll service. TMB has offered international credit and debit cards to

its customers in association with Visa and MasterCard, and also issued TMB FIT Platinum Cards for upper-

middle income consumers, TMB Top Brass Cards to high-ranking military officers and TMB G Cards to

government agency officials. This will help to build up good relationships with public sector agencies and

individual customers, increasing credit card loyalty. Thailand is one of the fastest-growing credit card markets in

the world. As of December 31, 2008, the Bank has issued approximately 250,000 credit cards and over three

million debit cards.

64 A n n u a l R e p o r t 2 0 0 8

• Other Fee-based Consumer Services

After the merger and as part of its corporate transformation to a universal bank, TMB is focused on

providing more fee-based services to its retail customers. Fee income from retail banking services is generated

from ATMs, credit cards, deposit transactions, and EDC services, as well as the products described below.

The Bank believes that by using the existing customer base, it can continually boost fee income from the retail

banking products. The Bank is also confident that it will be able to expand or modify its customer base to further

increase fee income.

Deposits

The Bank’s deposit products include:

• Savings accounts: Demand deposits that accrue interest at a fixed rate and offer a withdrawal facility

through debit cards, ATMs and pass books.

• Current accounts: Non-interest-bearing demand deposits that offer a withdrawal facility through cheques

and ATMs. The Bank may offer interest-bearing current accounts for large customers.

• Time deposits: Tenure-based deposits of a fixed amount over a fixed term that accrue interest at

a fixed rate specified by the Bank and may be withdrawn before maturity in accordance with applicable rates.

Tenures range from three to 60 months.

In addition to conventional deposit products, TMB offers a variety of special value-added products and

services that increase product offering alternatives and provide greater convenience for customers.

These value-added products and services include insurance coverage attached to deposit accounts, accounts for

government officials and state enterprise employees who are nearing their retirement, salary accounts, and

non-resident baht accounts.

As of December 31, 2008, TMB had total deposits of approximately Baht 450,560 million, which included

time deposits of about Baht 276,025 million; saving account deposits of around Baht 152,536 million; current

account deposits of approximately Baht 21,999 million, and bills of exchange of about Baht 24,740 million. The

Bank intends to increase the number of savings and current accounts by offering further incentives and providing

easier access to credit for loyal deposit customers.


Distribution Network

The Bank distributes its products and services through various access points ranging from traditional bank

branches to ATMs, telephone and the internet.

• Domestic Branches

The Bank uses its branches as the primary selling points for financial products and services to retail

customers across Thailand. As of December 31, 2008, the Bank had a network of 470 branches nationwide.

Before opening a branch, TMB conducts a demographic study in strategic areas to assess the branch’s business

potential. The Bank monitors existing branches regularly and closes branches with poor performance. In 2008,

TMB shut down the Rajabhat University Sakon Nakhon Sub-Branch and the Nonthaburi Branch and opened new

branches in promising areas, which are the Ha Yaek Chalong Phuket Branch and Central Plaza Chiang Mai

Airport Branch, to serve retail and SME customers. TMB plans to open more branches which, in principle, will be

small outlets in easily accessible areas such as department stores. They will be open for service every day to

efficiently and comprehensively satisfy customer needs.

The Bank is implementing a branch remodeling program to ensure modernity, transparency, and

cleanliness and also upgrading brach service equipment and facilities.

Additionally, TMB has accelerated the enhancement of its staff’s competence and readiness to deliver a

full range of banking services at all branches through training and product development. By doing so, the Bank is

able to provide its customers with useful advice and tailor-made products as well as other non-traditional banking

services that fit their particular needs.

As of December 31, 2008, the Bank’s branches were located in all parts of Thailand. They are

geographically categorized in the table below:

Region Total Number of Branches(1) As % of Total

Bangkok and vicinity 216 46

Central and Eastern 52 11

Eastern 41 9

Northern 53 11

Northeastern 49 10

Southern and Western 59 13

Total 470 100

(1) Excluding the Bank’s three overseas branches.

66 A n n u a l R e p o r t 2 0 0 8

• Overseas Branches

The Bank also has three overseas branches in the Cayman Islands, Hong Kong and Vientiane, Lao P.D.R.

The Cayman Islands branch was registered on August 24, 1994 under Part IX of the Companies Law

(2007 Revision) of the Cayman Islands. TMB operates the branch with a Category “B” Banking License under the

Banks and Trust Companies Law (2007 Revision and its amendment in 2008) of the Cayman Islands. This allows

the branch to conduct businesses with other licensees and offshore companies, but not to engage in businesses

locally with the public or residents of Cayman Islands, subject to the terms of local regulatory requirements. The

Cayman Islands branch acts primarily as an offshore funding center for the Bank. The address of the Cayman

Islands branch is Close Bank (Cayman) Ltd., 4th Floor Harbour Place, 103 South Church Street, PO Box 1034

GT Grand Cayman, Cayman Islands, British West Indies.

The Hong Kong branch was established in 1987 and was authorized in 1992 to operate as a restricted-

license bank under the supervision of Hong Kong Monetary Authority. The Hong Kong branch offers various

services to corporate banking customers, including advisory services on letters of credit and packaging credits

and purchasing of export bills. It also provides short and long-term loans to its customers. The Hong Kong branch

is located at Room 1601, 16th Floor, New World Tower 1, 18 Queen’s Road, Central Hong Kong.

The Laos branch was established in 1993 when it was granted a full banking license by the Governor of

the Bank of Lao P.D.R. and operates under the supervision of the Bank of Lao P.D.R. The Laos branch mainly

provides commercial banking services to SME and corporate banking customers, including cross-border trading

firms and joint venture companies. It offers a range of products such as deposits, short and long-term loans,

letters of credit, guarantees and foreign money transfers. The branch is situated at 34/2 Samsenthai Road,

Chanthabouli, Vientiane, Lao P.D.R.

• SME Zone Offices

SME zone offices provide advisory and support services to SME customers and are typically located

within existing and prominent full service branches. Currently, the Bank has 37 SME zone offices across Thailand.

In 2009, the SME network will expand to 50 zone offices and six Regional offices.

• Foreign exchange offices

TMB’s foreign exchange service is offered to customers via bureau de change or foreign exchange

offices, with foreign tourists and travelers as the target market. As of December 31 2008, there were a total of

106 foreign exchange offices (including mobile units) nationwide, ranking second in the market. Of the total,

18 are located in the passenger terminal of Suvarnabhumi Airport in Samut Prakarn, with the Bank being one of

the only two banks authorized to operate a foreign exchange service in this airport. TMB has considerable

experience in the foreign exchange business and was the first Bank to offer this service at Don Muang Airport.


The Bank’s FX mobile unit offers foreign exchange services in Bangkok and the provinces.

• Trade finance centers

As of December 31, 2008, the Bank operated 13 trade finance centers around the country, with the

objective of selling its products, facilitating the provision of financial services and advising on international trade

in terms of imports, exports and international trading laws.

• Electronic Banking

As of December 31, 2008, TMB had installed 1,946 ATMs across Thailand, with 972 in Bangkok and 974

in the provinces. These ATMs are at strategic locations based on high traffic areas with high transaction volumes.

Apart from offering services to its own cardholders, the Bank’s ATMs also process Visa, Visa Electron, Plus,

MasterCard, Cirrus, Maestro card, JCB and China Union Pay transactions. The Bank has entered into ATM

sharing arrangements with other banks that also allow its customers to access their TMB accounts through the

ATM networks of these banks. Similarly, customers of these banks can access their bank accounts using TMB’s

ATM network. In 2008, TMB increased new services via ATMs that includes an SMS Alert application, Internet

Banking application and M-Banking application. In 2009, the Bank plans to expand its ATM network by 400 units

nationwide. The Bank is investing in its ATM network in order to gain greater geographic coverage to provide a

wider suite of services to more customers.

• Merchant Services

As part of TMB’s merchant services business, the Bank provides point-of-sale transactions services for

its customers. As of December 31, 2008, the Bank had 12,733 merchants using its services and 14,562 terminals

throughout Thailand.

• Internet Services

TMB offers Internet banking services to its customers through www.tmbdirect.com. The Bank expects to

expand its Internet service offerings and strengthen online security to build customer confidence and encourage

greater usage.

With TMB Internet Banking, customers have access to a range of banking services such as balance

inquiries, funds transfers, stop payments on cheques, bill payments, third-party fund transfers, interbank

transfers, and future transfer scheduling. The Bank’s Internet services are available 24 hours a day, every day

and are deployed with high standards of technology and to international security levels. TMB has successfully

implemented a Two Factor Authentication System for higher transactional security and enhanced its Internet

system design to provide customers with a more efficient interface, faster service and higher system stability.

68 A n n u a l R e p o r t 2 0 0 8

• M- Banking (Mobile Banking)

TMB has expanded its channels by introducing a new Mobile-Banking service called “TMB M-Banking”.

The service is adapted from TMB’s own Internet Banking service to use Internet technology on a modern cellular

phone to serve the Bank’s personal customers. M-Banking opens up a new alternative channel that allows

access to TMB’s services such as account balance inquiry, transfer, bill payment, and Online Real-Time Inter-

bank Transfer where the customer can send an SMS Notification to recipients free of charge. Customers can use

a mobile phone to access TMB M-Banking at www.tmbdirect.com.

In addition, TMB provides TMB SMS Alert, a notification service to customers by SMS (Short Message

Service) to inform them of funds movements in (credit) and out (debit) of their savings/current accounts.

The service is real-time. Customers can apply for this service at TMB’s ATM machine using a TMB ATM/Debit

card. TMB SMS Alert will be ready to use immediately after completing the application process.

• Call Center

TMB has a call center service, operating 24 hours a day and seven days a week. Customers can call

“1558” to contact the Bank for their banking enquires/requests or to conduct telephone banking services using

an Interactive Voice Response (IVR) system. Based on customers’ preferred choice of service, they can perform

account balance enquiries, transfer funds, pay bills, request banking statements by fax, request cheque return

information and do many other tasks. By speaking to a Customer Service Officer, customers can perform the

same transactions as well as access additional services such as obtain interest rates & foreign exchange rates,

products & services details, report lost or stolen ATM/Debit/Credit Cards, request a temporary credit line increase

for credit cards and request a change in mailing address for a credit card. The Call Center also functions as one

of the Bank’s customer contact channels to manage feedback and complaints.

• Direct Sales Force

TMB’s direct sales force is a channel for selling customer banking customers both secured and

unsecured loan products, which includes credit cards and personal loans. Unsecured loan products are sold by

Direct Sales Agents and Tele Sales Agents, who cross sell the Bank’s products by telephone. The Direct Sales

and Tele Sales Agents are contract staff and managed by Direct Sales Managers or Tele Sales Managers.

The Bank pays the agents performance-based commissions. As of December 2008, the Bank had 450 sales

agents who generated over 45,000 accounts per year. The Bank’s secured loan products are sold by Direct Sales

Agents who work with well-known property developers in order to acquire new customers and are managed by

Mobile Sales Managers.


Other services

• Correspondent Banking

TMB maintains relationships with a worldwide network of correspondent banks to bolster its international

operations. The Bank offers global transaction services through these correspondent relationships, including trade

finance, cross-border payments and other treasury services. TMB also offers non-resident Baht clearing accounts

to correspondent banks to enable them to manage their Baht payments.The Bank has exchanged Bilateral Keys

or BKEs with almost 1,000 correspondent banks to support global transaction services worldwide. Currently,

TMB has allocated credit lines to accommodate business relationships with more than 300 banks and other

financial institutions worldwide. The Bank plans to expand its network of correspondent banks in order to

support its international trade operations and foreign currency payment business.

• Cash Management

For the past four years, TMB’s Cash Management Division has been developing its Cash Management

services to meet customer needs. The Bank now offers a full range of Cash Management Services including

Cash Management Payments, Collections, and Liquidity Management. In addition, its Corporate eBanking system

called TMB BizDirect offers Account Services, Cash Management Services, and Trade Finance Services.

TMB BizDirect allows customers to transact conveniently with the bank via the Internet with security that meets

the International standards. With these offerings, TMB can service its customers with quality and efficiency.

To expand its services, TMB plan to expand Corporate eBanking to offer EBPP (Electronic Bill

Presentment and Payment), E-Payment, and Direct Debit Online. These services will provide customers with

alternative channels for making payments online. Currently, these services are under development and will be

available soon.

• Investment Banking Services

TMB provides corporate customers with investment banking services including financial advisory

services, acting as a mutual fund trustee and selling agent and bondholder representative, advising on loans, debt

underwriting, corporate restructuring, share valuation, and business partner and investor matchmaking.

To increase its portfolio of financial products, the Bank is offering more complex products such as asset-backed

securities and interests in property funds. Although investment banking services are mainly for corporate

customers, certain types of these services are also provided to SMEs. The investment banking services are

an important source of TMB’s fee income.

70 A n n u a l R e p o r t 2 0 0 8

The Bank has a license to perform debt securities underwriting activities and provides underwriting services

for public and private placement offerings of debt securities. TMB underwrites a wide spectrum of debt products,

including asset-backed securities and interests in property funds, both on its own and on a syndicated basis.

The Bank uses its extensive branch network as one of the distribution channels for the securities offerings.

To expand its brokering, trading, underwriting and investment advisory services, TMB in October 2005

acquired a 51% stake in TMB Macquarie from Macquarie International Holdings Ltd. This acquisition enabled the

Bank to enter into the equity underwriting, dealing and retail brokerage businesses, as well as to expand its

institutional brokerage and advisory services. On September 3, 2008, the Bank sold its shares in TMB Macquarie

back to Macquarie International Holdings Ltd. with the objective to reorganize its business structure under TMB’s

financial group. TMB also acts as a selling agent for equity offerings to retail investors through its branches.

• Asset Management

The Bank provides a selling agent service through TMB Asset Management Co, Ltd. (“TMBAM”), a 75%-

owned subsidiary of the Bank, and ING Funds (Thailand) Co., Ltd. (“ING Funds”), a member of the world-class

ING financial group. Both companies offer a variety of asset management products via the TMB branch network

nationwide. This enables the Bank to offer a broader range of products to its customers.

• Life and non-life Insurance

The Bank offers brokerage services for life and non-life insurance through its bancassurance service

channels. Currently, TMB is partnered with ING Life Limited to provide a range of life insurance products, with

individual life and credit life coverage. For its non-life insurance business, the Bank has offered insurance for loan

collateral in association with non-life insurance companies. TMB also provides other non-life insurance products

such as motor insurance and health insurance.

On May 15, 2008, TMB officially launched the partnership with ING Life Limited, aiming to gear the Bank

towards being the leader in universal banking in Thailand. The Bank is offering bancassurance products from ING

Life Limited to serve customers’ diverse needs through TMB’s own service channels.

• Treasury Products

TMB operates in the domestic and international money, foreign exchange and derivatives markets to

hedge customer’s risks on foreign exchange and interest rates. The provision of treasury products and services to

corporate banking and SME customers is a significant source of non-interest income for the Bank.


TMB offers a variety of products for hedging short-term exchange rate risk on foreign currency

denominated receivables and payables, such as spots, forwards, swaps and options. The Bank also offers

interest rate and currency swaps and options for hedging medium and long-term risks caused by interest rate

currency exchange rate movements. TMB is an active participant in the Thai fixed income market, primarily in

Baht-denominated government bonds. In 2008, the Bank was ranked number five in the category of “The Most

Active Member Dealer (Outright Transactions)” by The Thai Bond Market Association.

TMB believes that the demand for risk hedging products will grow and is building capabilities to expand its

product and customer bases. To further expand the Bank’s clientele and to respond to its customers’ increasingly

diverse and complex needs, TMB has focused on providing more information on these products to its sales

channels.

Apart from offering products to hedge against foreign exchange risk, TMB also provides foreign exchange

transactions, telegraphic transfers, MONEYGRAM service, foreign currency deposits, and international

remittance, all of which generated fee income for the Bank.

Competitive advantages

• Strong Relationships with Corporate, SME and Retail Banking Customers

TMB’s nationwide presence has allowed it to build a strong base of corporate, SME and consumer

banking customers. As of December 31, 2008, corporate loans, SME loans and consumer loans amounted to

45.1%, 39.0% and 15.9%, respectively, of TMB’s total loan portfolio.

• Strong Brand Recognition

The Bank currently enjoys strong brand recognition. TMB completed an extensive re-branding exercise

in November 2005 that included introducing a new logo to emphasize the new, post-merger identity of the Bank.

TMB believes its brand name is well recognized throughout Thailand.

• Extensive Branch Network

TMB has an extensive branch network. As of December 31, 2008, the Bank had a network of 470

branches across Thailand and three overseas branches, 106 Bureau de changes (Fx booths) and 1,946 ATMs.

• Strong Deposit Franchise

The Bank has established a strong deposit franchise among consumers as well as institutions, holding

approximately 7% market share by total assets as of December 31, 2008. The strength is a result of TMB’s

effective distribution network, innovative products and full range of additional services catering to the needs of

72 A n n u a l R e p o r t 2 0 0 8

customers such as asset management, cash management and payments. The Bank continues to attract

a diverse range of depositors in addition to its traditional core consumers and payroll customers.

• Innovative Business Technology

TMB aims to use technology to provide efficient services to customers, achieve product differentiation,

and support internal business units, while maintaining low IT operating costs. It has employed business-driving

technologies such as a Core Banking System that is in operation 24 hours a day, seven days a week; Corporate

eBanking, an electronic channel for corporate customers to do transactions; Internet Banking; Mobile Banking,

which features an unmatched technology enabling customers to use TMB’s services without the need to change

a SIM card and phone number; and SMS Notification, which serves the lifestyles of today’s customers for whom

technology is becoming increasingly indispensable. In terms of security, TMB has initiated the Two Factors

Authentication system, applicable with both Token and SMS authentication. Further, the Bank has introduced a

SMS Alert services for all financial transactions to strengthen customer confidence. TMB’s overall technological

capability enables the Bank to efficiently drive its business, create product differentiation and have a competitive

edge over its competitors while bolstering TMB’s Customer Centricity strategy.

TMB has established an IT infrastructure, known as a Service Oriented Architecture (“SOA”), and

“infrastructure virtualization” to improve its IT service capability and operational efficiency while better supporting

business needs. This infrastructure enables customers to conduct their business with increased flexibility and

responsiveness to address new market opportunities and challenges.

In 2007, the Bank was recognized for its technological innovation in the financial industry both in Thailand

and abroad. TMB was awarded the “SOA Innovation Award” from Financial Insights, a provider of business and

technology advice and strategic planning for the financial services industry. The award highlights TMB’s SOA

technology application of a Straight Thru Process for an unsecured personal loan project, which helps to

automate and quicken the loan approval process with greater more efficiency.

• Well-established Asset Management Company

The Bank offers asset management products to middle-income and affluent customer segments.

These products are managed by TMB Asset Management Co, Ltd. (“TMBAM”) and ING Funds (Thailand) Co.,

Ltd. (“ING Funds”). TMBAM is 75% owned by the Bank and ranks number four in market share with assets under

management worth Baht 128,236 million (excluding special fund and Vayupak Funds) or a 10.48% market share.

ING Funds is a member of the world-class ING financial group and ranks number six in market share with assets

under management worth Baht 51,498 million, representing a market share of 4.21%. As a selling agent for both

TMBAM and ING Funds, TMB is able to offer the widest variety of products to its clients.


Provision of products and services

Sources of funds

Major sources of funds for TMB are deposits, borrowings, interbank and money market items, securities

sold under repurchase agreement, and liabilities payable on demand. As per December 31, 2008, TMB had total

deposits of Baht 450,560 million, which represented 85.1% of total funds, comprised of time deposits of Baht

276,025 million, savings accounts of Baht 152,536 million, and current accounts of Baht 21,999 million,

representing 52.1%, 28.8%, and 4.2% of total funds respectively. In addition, the Bank recorded total borrowings

of Baht 66,342 million, interbank and money market items of Baht 9,299 million, and liabilities payable on demand

of Baht 3,297 million, making up 12.5%, 1.8%, and 0.6% of total funds respectively.

TMB’s sources of funds during the specified period are as follows:

As of December 31

2008 2007 2006

Amount As % of Amount As % of Amount As % of

(Bt.million) total fund (Bt.million) total fund (Bt.million) total fund

Time deposits 276,025 52.1 271,531 49.2 415,179 60.4

Savings accounts 152,536 28.8 174,286 31.6 131,431 19.1

Current accounts 21,999 4.2 19,808 3.6 16,101 2.3

NCD 0 0.0 3 0.0 5,963 0.9

Total deposits 450,560 85.1 465,628 84.3 568,674 82.7

Interbank and money market items 9,299 1.8 25,081 4.5 21,786 3.2

Liabilities payable on demand 3,297 0.6 3,610 0.7 3,518 0.5

Securities sold under repurchase agreements - - 4,765 0.9 - 0.0

Borrowings 66,342 12.5 53,215 9.6 93,271 13.6

Total 529,498 100.0 552,298 100.0 687,249 100.0

74 A n n u a l R e p o r t 2 0 0 8

• Policy on funding and pricing

TMB has a policy to mobilize funds from the sources mentioned above with the amount and tenor that is

closest aligned to its requirements. Other factors taken into account are proper liquidity for the Bank’s operation

and comparison of funding costs from various sources. Meanwhile, the suitable deposit interest rates are

determined based on liquidity in the money market and of the Bank itself, together with external factors such as

interest rate trend, the BoT’s monetary policy, competition in mobilizing deposits, national economic trends and

other such factors.

• Policy on liability management

TMB has adopted a policy to manage its liabilities to match with the assets or customers’ demands for

loans. In order to hedge against both interest rate and FX risks, various financial instruments such as FX swaps,

interest rate swaps and cross currency swaps are applied with an aim to implement this policy efficiently, which

constitutes the alignment of the Bank’s cash inflow and outflow. As of December 31, 2008, outstanding swaps

and derivatives were approximately USD 270 million for long term and USD 95 million for short term.

Credit extension

• Credit Risk Management

Lending can expose TMB’s earnings and capital to credit risk. Effective management of the portfolio and

credit functions is crucial to the Bank’s safety and soundness. Credit portfolio management is a process by which

risks that are inherent in the credit processes are managed and controlled. The Bank ensures that credit portfolio

is well diversified and generates the required risk-adjusted return. TMB’s core credit risk principles are as follows:

Credit Portfolio Management

The Bank strategically formulates composition of its credit portfolio and sets limits to cap concentration risk

at an acceptable level.

Checks and Balances

TMB has established Credit Delegation of Authority to segregate the duties of a recommending authority

from an approving authority. Credit approval may not be given at the sole discretion of any one bank officials.

Sound Credit Granting

Operational procedures are set out in writing with sufficient details to provide guidance to staff throughout

the credit process.


Standard for Professionalism

The Bank ensures that staff who are involved in the credit process comply with all applicable policies,

appropriate laws and regulations, and the Bank’s code of conducts.

Monitoring and Control

Adequate reporting standards are defined to monitor and maintain effectiveness of credit portfolio

management.

• Credit Risk Policies

The credit risk policies are developed with a clearly-defined guideline under the common framework and

standard documentation requirement, as follows:

Core Credit Risk Policy:The policy provides guidance on sound practices in credit risk management and

ensures that the Bank formulates all supplementary credit policies, processes, and procedures under common

principles and standards.

Single Exposure Limit Policy:The policy provides guidance to business units to prudently manage the

growth of portfolios in a manner that is adequately diversified.

Country Risk Management Policy: The policy sets out operational guidelines to establish country

exposure limits to ensure appropriate diversification of the portfolio and avoid concentration of country risk.

Industry Concentration Framework: The policy provides guidance to establish a bank-wide industry

concentration limit structure to protect the Bank from excessive credit risk exposure to any major industry sectors

or sub-sectors.

Core Credit Risk Policy on Conflict of Interest: The policy supplements the Bank’s code of conduct by

outlining specific policies on conflict of interest that could arise in the course of TMB’s lending activities.

Core Retail Credit Risk Policy: The policy is established to highlight additional minimum requirements

and standards for retail credit. This policy is an annex of the Core Credit Risk Policy.

Collective Provision for Loan Portfolio Policy:The policy sets out a consistent framework for collective

provisioning for the Bank’s credit portfolio to minimize impacts from unexpected events or changes.

76 A n n u a l R e p o r t 2 0 0 8

Credit Quality Review Policy:The policy outlines the scope of credit quality review function, which is an

independent assessment of all aspects of credit risk exposure.

Credit Risk Mitigation Policy: The policy provides guidance in credit risk mitigation practices to reduce or

transfer credit risk to which the Bank is exposed. This policy is an annex of the Core Credit Risk Policy.

• Credit Policies

TMB has implemented a policy on credit extension covering corporate loans, SME loans and consumer

loans. The loans are not provided for businesses that are against the law and the code of ethics.

This policy covers the following:

1. As a basis for the Bank’s operations, policies and customer qualifications are set out according to risk

levels, divided into three groups-credit that is prohibited/suspended, credit that is discouraged, and credit

requiring special attention.

2. Credit portfolio management is carried out to prevent the concentration of the credit extension, for

example, to any particular industrial/business sector or group of borrowers. To ensure a check and balance in the

approval process, the Bank clearly separates the roles and duties of the business relationship management unit,

credit risk analysis unit and parties with approval authority.

3. The working procedures and practices of credit analysis are set out in writing to provide officials with

guidelines for customer screening, customer payment ability analysis, risk analysis, collateral consideration, and

risk mitigation through financial covenants.

TMB’s retail credit portfolios comprise consumer and small/micro SME exposures and are now managed

on a product portfolio basis. Policy scope and product terms & conditions are packaged and standardized in

order to achieve maximum efficiency and reliability in portfolio underwriting, management and collections.

Scorecards and credit risk rating tools are also used where available.

The key policies used for managing consumer products and developed for small/micro SME products

include:

- Product or Service Approval Process (PSAP), which describes the product target market, terms and

conditions, and product features as well as eligibility criteria

- Product Credit Policy, which describes the policy criteria and required checks and controls for the

particular product

- Underwriting Standards, which give detailed instructions to credit officers on the assessment and

approval of applications


- Risk Appetite Statements, which set the boundary of a particular product and, where necessary, specify

higher risk segments within it in terms of outstanding and also identify the probability of default and loss given default

• Credit approval and monitoring

The Bank has a separate credit process for commercial credit (Corporate and SME) and retail credit and

has segregated the role by credit process into ‘relationship management’ and ‘credit management’ for proper

checks and balances. Relationship groups report to their respective Chief Officers, while credit management

group reports to Chief Risk Officer. Relationship managers (RMs) for Commercial Credit are responsible for

marketing, sales and deal origination, customer service, and preparation of credit applications that will be

forwarded to credit officers for further credit risk assessment. RMs also have duties to endorse the proposed

facilities structure, terms and conditions that match the borrowers’ financial position, cash flow, and risk involved.

The credit applications are then proposed to the relevant credit committee that has the authority to approve

based on the credit limit and the policy and qualitative justification. Credit beginning to run into problems or

delinquent customers are forwarded to the Commercial Asset Management Committee.

For Retail Credit, the credit process is structured on a product basis. Again, marketing and credit

management are separated into different groups, with the BU handling the marketing reporting to the Chief Retail

Banking Officer and the credit management group reporting to the Chief Risk Officer. Customer acquisition is

either through branches or direct sales under the marketing and sales guidance of the product manager.

Consumer credit applications for unsecured products are processed through the credit scoring system and for

secured products through the predefined underwriting standard under the expert judgment system. The collection

team, currently under the Retail Credit Group, will then continue with the preventive collection and recovery

collection process.

In terms of credit risk measurement, the Bank is using a credit risk rating system developed by an

external advisor for its commercial credit. Plans are in place for further risk-based credit management such as on

customer exposure limits, portfolio risk limits, and pricing. TMB has prepared and economic capital framework

that will be implemented in 2009 and will be the basis for further improvement in risk management and will be the

basis for single exposure limits, portfolio risk limits and pricing.

Funding or lending through parties related to the Bank’s executives or major shareholders

As of December 31, 2008:

- The proportion of deposits accepted from businesses related to executives

or major shareholders was 2.22%.

- The proportion of loans and accrued interest receivable to businesses related to executives

or major shareholders was 3.84%

78 A n n u a l R e p o r t 2 0 0 8

Shareholders

Below is the list of the 10 largest shareholders as of the latest share register closing date on April 4, 2008,

in order to determine the right to attend the Annual General Meeting of Shareholders no. 1/2008 held on April 25, 2008:

Numberofordinary NumberofclassB %

Majorshareholders shares preferredshares

1. Ministry of Finance 9,372,279,805 1,991,992,200 26.11

2. ING Bank N.V. 10,970,893,359 - 25.20

3. DBS BANK A/C 003 2,977,989,892 - 6.84

4. Thai NVDR Co., Ltd. 2,975,491,074 - 6.84

5. JPMorgan Special Situations(Mauritius) Limited 1,560,000,000 - 3.58

6. Deutsche Bank AG, London Prime Brokerage 1,393,212,978 - 3.20

7. J.P. Morgan Ireland (Nominees) Limited 564 833,118,889 - 1.91

8. Royal Thai Army 596,879,860 - 1.37

9. Gerlach & Co. – Orbis Sicav 398,281,377 - 0.92

10. State Street Bank and Trust Company, for London 338,312,766 - 0.78

Source: Information on the latest share register closing date on April 4, 2008 prepared by Thailand Securities Depository

Co., Ltd. Investors may look for the list of shareholders fromwww.set.or.th

Thenumberofsharesorimpactsonshareholders’votingrightsfromtheissuanceofNon-VotingDepository

Receipt(NVDR)

Non-Voting Depository Receipt (NVDR) is a trading instrument issued by Thai NVDR Co., Ltd., a

subsidiary wholly owned by Stock Exchange of Thailand (SET). By investing in NVDRs, investors will receive all

financial benefits including dividends, right issues or warrants, as if they had invested in a company’s ordinary

shares. Unlike ordinary shareholders, NVDR holders are not entitled to voting rights in a shareholders’ meeting

except for the case of voting to pass a resolution concerning the delisting of shares from the SET. If the Bank’s

shares are issued as NVDRs in a great number, its shares with voting rights will decrease and the voting rights of

other shareholders will increase.

As of April 4, 2008, the latest share register closing date to determine the right to attend the Annual

General Meeting of Shareholders no. 1/2008 held on April 25, 2008, Thai NVDR Co., Ltd. issued NVDRs with

TMB shares as reference asset amounting to 2,975,491,074 shares or 6.84% of TMB’s issued and paid-up

ordinary shares. However, the issuance of NVDR securities does not fall within the realm of the bank’s control.

Investors may check the information on NVDR shares from website of the SET at www.set.or.th/nvdr

Shareholding and Management


Managementstructure

TMB’s management structure comprises the Board of Directors and five board committees which has been

appointed by the Board of Directors. At the Board of Directors meeting no. 5/2551 held on May 14, 2008,

a resolution was passed for the board committee restructure to include five committees, namely the Audit

Committee, the Board of Executive Directors, the Credit Committee, the Nomination, Remuneration and

Corporate Governance Committee and the Risk Management Committee. All the committees aforementioned are

responsible for overseeing the Bank’s operations and are tasked to scrutinize crucial issues to be in accordance

with good corporate governance before submission to the Board of Directors.

The duties and responsibilities of each board committee are clearly determined in writing. Committee

members have profound knowledge, skills, and experience that are aligned with their responsibilities. Most of the

Committee member are not the Bank’s executives with some acting as independent directors providing a balance

and separation of authorities for governance and management.

1. BoardofDirectors

The Board of Directors as of December 31, 2008 consisted of 12 members, one holding executive position,

seven holding non executive positions, and four being independent directors to ensure a balance of the board’s authorities.

The Board of Directors as of December 31, 2008:

Name Position

1. Dr. Sathit Limpongpan Chairman 2. General Anupong Paojinda Director

3. Mr. Philippe G.J.E.O. Damas Director/Chairman of Board of Executive Directors

4. Mr. Vijit Supinit Director/Independent director/Chairman of

Audit Committee

5. Dr. Juanjai Ajanant Director/Independent director/Chairman of

Nomination, Remuneration and Corporate

Governance Committee

6. Dr. Nipon Poapongsakorn Director/Independent director/Audit Committee Member

7. Mr. Amorn Asvanunt Director

8. Mrs. Saowanee Kamolbutr Director/Chairman of Credit Committee

9. Mr. Willem Frederik Nagel Director/Chairman of Risk Management Committee

10. Mr. Vaughn Nigel Richtor Director

11. Mr. Christopher John King Director/Independent director/Audit Committee Member

12. Mr. Boontuck Wungcharoen Director/Chief Executive Officer

M.L. Ayuth Jayant is Secretary to the Board. The Board meeting is held at minimum on a monthly basis

or as deemed necessary.

80 A n n u a l R e p o r t 2 0 0 8

Authorizedsignatories

Dr. Sathit Limpongpan, Chairman, or Mr. Boontuck Wungcharoen, Chief Executive Officer and in his

capacity as the President, or any two directors are authorized to co-sign with the Bank’s seal affixed.

ThescopeofresponsibilitiesoftheBoardofDirectorsisasfollows:

Policy

1. To set the overall strategic direction and targets for the Bank, review and approve business policies,

operational direction, business plans and yearly budgets.

2. To appoint some of the board members as the Board of Executive Directors to operate the Bank’s

business as assigned by the Board of Directors.

3. To approve the scope of responsibilities of board committees and their composition as well as other

significant changes to their activities.

4. To review the Bank’s Memorandum and Articles of Association and communicate them to the

shareholders.

5. To consider plans for capital injection, whenever appropriate.

Management

1. To oversee management’s operations of the business that enhances the Bank’s competitiveness and

operational effectiveness and efficiency with core focus upon the interest of the Bank and the shareholders. These

operations are in alignment with the Bank’s vision and mission as defined by the Board.

2. To ensure management has in palce established policies and procedures of risk management with

regard to approvals, reviews, and practices encompassing credit risk, market risk, investment risk, operational

risk, reputational risk, legal and compliance risk, asset and liability management risk, liquidity risk, interest rate

risk, and others according to the regulations of the Central Bank (BOT)

3. To set approval powers and delegation of authority for transactions that are binding for the Bank and for

a third party.

4. To effect reporting by Management and the Board of Executive Directors in a timely and appropriate

manner on issues to the Board of Directors.

5. To follow up meeting minutes and monitor performance of all board committees.

6. To delegate authority to subcommittees to approve transactions within their respective approval limits.

The Board of Directors shall delegate authority to subcommittees for approval of transactions according to credit

limits and authority as determined by the Board.


Oversightandinternalcontrol

1. To ensure high transparent in Bank’s management with check and balance in place for good corporate

governance.

2. To review the Bank’s management report and accounting report on a quarterly basis.

3. To ensure the Bank strictly complies with the regulatory rules and requirements through a monthly

review.

4. To ensure the Bank has adequate and effective internal control and audit systems and to appoint and

supervise the Audit Committee and the Risk Management Committee to perform their duties with best integrity.

5. To establish codes of best practices and business ethics for the directors, the executives and staff

members as internal operational guidelines.

Humanresource

1. To approve the employment, appointment, rotation, remuneration, disciplinary action, severance of

employment, and resignation of top executives, as well as the recommendations of the Nomination,

Remuneration and Corporate Governance Committee.

2. To assess twice a year the performance of the following executives: Chief Executive Officer, Chief

Financial Officer, Chief Operating Officer, Chief Risk Officer, Chief Retail Banking Officer, Chief Wholesale

Banking Officer and Chief SME Banking Officer.

The delegation of authority and responsibilities of the Board of Directors shall not be the delegation or sub-

delegation that will allow for the Board of Directors or the persons so authorized to approve any transactions that

they themselves or their related parties (as defined in the SEC’s notification or by other concerned authorities) have

vested interest or conflict of interest with the Bank or any of its subsidiaries, unless it is an approval of the transactions

that is in accordance with the policies and regulations approved by the shareholders’ meeting or the Board of Directors.

BoardofDirectorscompositionandappointment

The composition, appointment, discharge or removal of the directors are determined in the Bank’s Articles

of Association, which could be summed up as follows:

1. There shall be a Board of Directors to run the TMB business, consisting of at least nine but not more

than twenty two directors as periodically determined by the meeting of shareholders of the Bank, provided that not

less than half of the total number of directors shall have residence in the Kingdom of Thailand.

2. Election of directors shall be effected in accordance with the following rules and procedures:

(1) Each shareholder shall have one vote for each share held.

(2) Each shareholder shall cast his votes in accordance with clause (1) to elect one or several

directors as decided by the Meeting but each shareholder may not divide his votes into portions and assign them

to various candidates.

82 A n n u a l R e p o r t 2 0 0 8

(3) The candidates who receive the highest votes, in descending order of votes, shall be elected as

directors in the number equal to the required number of the directors of the Bank or the number of the directors to

be elected at such Meeting. In the event of a tie which causes the number of candidates to be elected in exceed

of the number of directors of the Bank or the number of the directors to be elected at such Meeting,

the chairman of the Meeting shall have a casting vote.

3. At the annual ordinary meeting of shareholders, one-third of the total number of the directors of the

Bank shall retire. If the number of directors cannot be equally divided into three parts, the number of directors

nearest to one-third shall retire. The directors to retire from their office in the first and second years following the

registration of the Bank shall, unless otherwise agreed, be determined by drawing lots. In any subsequent years,

the directors who have been in office the longest shall retire. Retired directors may be re-elected.

4. Any director wishing to resign from his office shall submit his resignation letter to the Bank.

Such resignation shall be effective on the date the resignation letter reaches the Bank.

5. In case of vacancy in the Board of Directors (for reasons other than retirement by rotation), the Board

of Directors shall elect a person who has the qualifications without any prohibited characteristics under the laws

as a replacement at the following meeting of the Board of Directors, unless the remaining duration of the

director’s term of office is less than two months. The replacing directors shall hold office only for the remaining

term of office of the directors whom they have replaced. The resolution of the Board of Directors shall be

supported by a vote of not less than three-fourths of the number of remaining directors.

Selectionofindependentdirectors

The Bank realizes the key role of independent directors is in protecting the benefits of the Bank and small

shareholders. The Bank has promoted directors’ independence and managed conflicts of interest to be in

compliance with the principles laid down by the authorities and good corporate governance guidelines. The Board

of Directors therefore set a guideline for a selection of independent directors. The nominated persons shall be

selected from among the various fields of professions with appropriate qualifications and experience.

The Nomination, Remuneration and Corporate Governance Committee then screen qualified persons before

proposing to the Board of Directors for further election.

As of December 31, 2008, the Bank’s Board of Directors consists of 12 members, four of whom are

independent directors. The minimum number of independent directors is set to be one-third of the total number of

directors and not less than three persons.

Independent directors shall be selected from the persons in various fields of occupations with appropriate

qualifications and experience. The shareholders or the Bank’s Board of Directors (as the case may be) shall

appoint the independent directors. The preliminary qualifications of the independent directors are in accordance

with the provisions as prescribed by the Office of the Securities and Exchange Commission, the Stock Exchange

of Thailand and the Bank of Thailand and in line with the good corporate governance and guidelines on board

structure to promote good governance of commercial banks. Definitions of independent directors are as follows:


1. Holding not over 0.5% of paid-up shares of the Bank, its subsidiary companies, associated companies,

or related companies, inclusive of shares held by related persons.

2. Not participating in the administration of the Bank, or being employees or officials or advisers who

receive regular salaries from the Bank, or being the persons with controlling power of the Bank, its subsidiary

companies, associated companies, related companies or the Bank’s major shareholders, or not being or related

with professional service providers, auditors, lawyers or any professionals that will constrain them from giving

independent opinions to the Bank, its subsidiary companies, associated companies, related companies or the

Bank’s major shareholders. Moreover, they shall not be the persons who may have conflicts of interest and must

not have had vested interest in the manners mentioned above or in other manners for at least one year before

they become fully qualified to be independent directors, except that the Board of Directors have carefully

considered that such vested interest will not affect their performing of duties and giving of independent opinions.

3. Not having business relationship, benefits, or interests, either directly or indirectly, in financial or

administrative aspects in the Bank, its subsidiary companies, associated companies, or the Bank’s major

shareholders or persons with possible conflicts of interest in such manner that may cause a lack of independence.

4. Not being related to or being close relatives of the Bank’s executives, major shareholders, subsidiary

companies, associated companies, or persons with possible conflicts of interest.

5. Not being appointed as representatives to protect the benefits of the major shareholders or being

shareholders who are related to the Bank’s major shareholders.

2. BoardofExecutiveDirectors

The Board of Directors at the meeting no. 5/2551 on May 14, 2008 approved to segregate Board of

Executive Directors into 2 committees, namely Board of Executive Directors and Credit Committee, with matters

related to credits and investments that are normal transactions of the Bank to be under the purview and

responsibility of the Credit Committee. The purpose of this is to clearly distinguish the policy management and

credit approval, thereby enhancing its efficiency and effectiveness. The Credit Committee approval authority in

relation to such normal credit and investment transactions shall be equivalent to that of the pre-segregated Board

of Executive Directors.

As of December 31, 2008, the Board of Executive Directors was composed of members as follows:

Name Position Note

1. Mr. Philippe G.J.E.O. Damas Chairman Non executive position

2. Mr. Willem Frederik Nagel Executive Director Non executive position

3. Mrs. Saowanee Kamolbutr Executive Director Non executive position

4. Mr. Amorn Asvanunt Executive Director Non executive position

5. Mr. Boontuck Wungcharoen Executive Director Executive position

M.L. Ayuth Jayant is Secretary to the Board of Executive Directors.

The Board of Executive Directors’ meeting is usually held twice a month or as deemed essential and

instructed by Chairman of the Board of Executive Directors.

84 A n n u a l R e p o r t 2 0 0 8

Thescopeofresponsibilitiesisasfollows:

1. To screen the Bank’s business policies, strategies, plans, and budgets before submitting for the Board

of Director’s approval as well as regularly follow up the Bank’s performance.

2. To monitor and recommend to the Board of Directors the level of the Bank’s capital as well as the

amendment to the Bank’s Memorandum and Articles of Association.

3. To consider and approve strategic investments, other than the usual transactions, expenditure, equity

participation, and human resource management which are beyond the Management’s approval authority.

4. To oversee and manage the Bank’s transformation project, conduct an analysis and conclusion on the

Bank’s situation to devise and propose strategies to the Board of Directors, and approve an organization and

human resource restructuring within the delegated authority.

5. To approve the employment, appointment, rotation, dismissal, fixing of remuneration, disciplinary

action, severance of employment, and resignation of executives in the ranks specified.

6. To examine the performance of the Chief Executive Committee and report the examination results to

the Board of Directors; provide advice to the Chief Executives on urgent or important issues, and to monitor and

screen the critical issues raised by the Management and propose to the Board of Directors.

The delegation of authority and responsibilities of the Board of Executive Directors shall not be the

delegation or sub-delegation that will allow for the Board of Executive Directors or the persons so authorized to

approve any transactions that they themselves or their related parties (as defined in the SEC’s notification or by

other concerned authorities) have vested interest or conflict of interest with the Bank or any of its subsidiaries,

unless it is an approval of the transactions that is in accordance with the policies and regulations approved by the

shareholders’ meeting or the Board of Directors.

3. CreditCommittee

Set up as a seperate entity from Board of Executive Directors, the Credit Committee is to approve all

matters which related to credits and investments that form part of the normal transactions of the Bank. The Credit

Committee approval authority in relation to such normal credit and investment transactions shall be equivalent to

that of the pre-segregated Board of Executive Directors. (The Board of Directors at the meeting no. 5/2551 on

May 14, 2008)


As of December 31, 2008, the Credit Committee was composed of members as follows:

Name Position Note

1. Mrs. Saowanee Kamolbutr Chairperson Non executive position

2. Mr. Willem Frederik Nagel Committee Member Non executive position

3. Mr. Amorn Asvanunt Committee Member Non executive position

4. Mr. Boontuck Wungcharoen Committee Member/ Executive position


5. Mr. Bart F.M. Hellemans Committee Member/ Management

Chief Risk Officer

Miss Puangpet Orankitvanit is Secretary to the Credit Committee. The Credit Committee’s meeting is

usually held twice a month or as deemed essential as instructed by Chairperson of the Credit Committee.


1. To consider and approve credits that are beyond the Management’s approval authority.

2. To consider and approve investments of the usual transactions, and debt restructuring that are beyond

the Management’s approval authority.

3. To review the medium- and large-sized NPLs.

4. To set and review the strategies and carry out credit-related development so as to achieve the Bank’s

targets and make appropriate recommendations to the Board of Directors.

5. To review credit and investment performance of the Bank.

4. AuditCommittee

As of December 31, 2008, the Audit Committee was comprised of members as follows:

Name Position

1. Mr. Vijit Supinit Chairman of the Audit Committee/Independent Director

2. Dr. Nipon Poapongsakorn Committee Member/Independent Director

3. Mr. Christopher John King Committee Member/Independent Director

Mr. Peera Chinwannabutr is Secretary to the Audit Committee. The Audit Committee’s meeting is usually

held once a month or as deemed essential as instructed by Chairman of the Audit Committee.


1. To review and ensure that the Bank’s financial reports are adequate and accurate.

2. To oversee the Bank’s internal control system that has in place all appropriate and effective internal

audit processes as well as to ensure that Audit Group has appropriate and adequate personnel to effectively

perform its duties.

86 A n n u a l R e p o r t 2 0 0 8

3. To ensure that the Bank strictly operates in compliance with the laws and regulatory requirements.

4. To recommend the nomination of the Bank’s auditor and adjust appropriate auditing fee by taking into

account the reliability, experience, personnel adequacy and independence of such audit office.

5. To approve the hiring or the design of agreement with the auditor for services other than the audit work.

6. To ensure that the Bank’s disclosure of information is accurate and adequate for concerned

transactions or transactions that may involve conflicts of interest.

7. To prepare a report on the Audit Committee’s supervisory; review activities; disclose the report in the

Bank’s annual report; and secure the sign off from the Chairman of the Audit Committee.

8. To report to the Board of Directors so that remedial guidelines would be set out when any of the

following observations is made: conflicts of interest, frauds or suspected fraudulent acts, activities that contain risk

exposure; Administrative errors; and acts againts the relevant laws or regulatory rules.

9. To investigate complaints made by the Bank’s employees and customers.

10. To consider the examination results and orders of the Bank of Thailand, the Office of the Securities and

Exchange Commission, the Stock Exchange of Thailand and other relevant agencies, and to consider the

appropriateness of the measures and remedial actions taken by the Management.

11. To carry out any assignment given by the Board of Directors as consented by the Audit Committee.

12. To comply with the regulations of the Bank of Thailand, the Office of the Securities and Exchange

Commission, the Stock Exchange of Thailand and other relevant agencies.

It is noted that the scope of responsibilities of the Audit Committee had reviewed in February 2009.

5. Nomination,RemunerationandCorporateGovernanceCommittee

The Board of Directors at the meeting no. 5/2551 on May 14, 2008 approved the following integrate

corporate governance (CG) issues to the Nomination and Remuneration Committee(NRC), as the CG issues

have always been given high degree of importance by the BoD and changed the name to Nomination

Remuneration and Corporate Governance Committee (NRCC)


As of December 31, 2008, the Nomination, Remuneration and Corporate Governance Committee was

comprised of the directors not holding executive position, namely:

Name Position Note

1. Dr. Juanjai Ajanant Chairman Independent director

2. Mr. Philippe G.J.E.O. Damas Committee Member Non executive position

3. Mrs. Saowanee Kamolbutr Committee Member Non executive position

4. Mr. Christopher John King Committee Member Independent director

Mr. Thawatchai Techawatanawana is Secretary to the Committee. The meeting of this Committee is

usually held four times a year or as deemed necessary as instructed by Chairman of the Nomination,



Nominationandremuneration

1. To set policies, criteria and methodology for nomination of directors and top executives for the Board of

Director’s consideration and approval.

2. To select and nominate qualified persons to be appointed as members of the Board of Directors, senior

executives and directors on the board of any company in which the Bank holds at least 50% of its equity for

the Board of Directors’ consideration.

3. To set a policy on the payment of remuneration and other benefits as well as on the amount of

remuneration and other benefits for directors and top executives in a clear and transparent manner for the Board

of Director’s consideration and approval.

4. To ensure that the Board members and top executives of the Bank receive remuneration appropriate

and commensurate with their roles and responsibilities.

5. To lay down guidelines on performance assessment for the Board members and top executives

in relation to annual adjustment of their remuneration based on the scope of their responsibilities and the risks

involved and also on the increase shareholder’s value in the long term.

6. To set a succession plan for the top-executive level.

Corporategovernance

1. To assist the Board of Directors in monitoring and ensuring that the operations of the Bank and its

practices and operations of the Board of Directors, relevant committees, the Management and staff members

are in compliance with good corporate governance. Moreover, it is to formulate, follow up and communicate

the guidelines on corporate governance practices to the internal and external relevant parties.

88 A n n u a l R e p o r t 2 0 0 8

2. To formulate guidelines and all policies related to good corporate governance principles for the Bank.

3. To regularly review the relevant policies, principles and guidelines and make recommendations on the

business ethics and code of conduct.

4. To follow up the new development on good corporate governance guidelines of government agencies

and international organizations and adopt the suitable ones for bank practices.

5. To supervise and ensure the continuity and suitability of good corporate governance in the Bank.

6. To report to the Board of Directors the Bank’s good corporate governance with recommendations

for improvement.

6. RiskManagementCommittee

As of December 31, 2008, the Risk Management Committee was comprised of members as follows:

Name Position Note

1. Mr. Willem Frederik Nagel Chairman Non executive position

2. Dr. Juanjai Ajanant Committee Member Independent director

3. Dr. Nipon Poapongsakorn Committee Member Independent director

4. Mr. Amorn Asvanunt Committee Member Non executive position

5. Mr. Boontuck Wungcharoen Committee Member Executive position

Mr. Buntoon Tohtong is Secretary to the Committee. The meeting of this Committee is usually held on a

monthly basis or as deemed necessary as instructed by Chairman of the Risk Management Committee.


1. To approve the Comprehensive risk management strategies in a holistic manner.

2. To approve significant policies and frameworks that govern the management of risks including risk

governance matters which are required by the authorities to be approved by the Board of Directors.

3. To recommend the risk levels and its concentration for the Board of Directors’ approval.

4. To approve the supplemental risk limits as defined in the relevant policies and frameworks.

5. To review and monitor all risks and risk management including preparedness for Basel II compliance.

6. To approve the appointment, review of committee structure and composition, and roles and duties of

the management-level risk management committees.

7. To report the risk management performance and all risk management matters and measures to the

Board of Directors and the Audit Committee.


7.Othercommittees/workinggroups

Policyissues (5 main committees)

1. ChiefExecutiveCommittee: To supervise and ensure the Bank’s operations are aligned with its

vision, objectives and strategies; to develop business strategies and plans, and annual budgets; to supervise,

manage, encourage, and follow up the operations and performances of all functional groups to ensure they meet

the targets.; execute orders, supervise a remedy of critical situation, and solve problems in all situations including

liquidity crisis or when damage has been incurred to the Bank to ensure business continuity.

2.AssetandLiabilityManagementCommittee: To review/endorse, under the scope provided by the

Board of Directors, the policies, guidelines, standards, processes and risk tolerance levels related to liquidity and

money market risk management which impacts both banking book and trading book; and to review and supervise

the asset and liability management of the Bank to be in compliance with the rules and regulations of the

concerned authorities.

3. CreditPolicyCommittee: To review/endorse the credit risk policies, credit underwriting standards

and criteria, and non-transactional credit risk limits; to review the firm-wide credit risk profile, credit risk tolerance

level and instruments for credit-risk control; and to provide guidelines related to the credit risk management for

current situation and also after new product launch.

4. OperationalRiskManagementCommittee: To review/endorse the operational risk management

policies, standards, processes and operational risk tolerance levels; to monitor and review the firm-wide

operational risk profile and issues; and to provide guidelines on the operational risk management.

5.BaselIISteeringCommittee: To supervise and ensure that Basel II project implementation is aligned

with the Bank’s direction and strategy; and to monitor the Bank’s direction and highlight any business need

changes that necessitate changes in the project objectives.

90 A n n u a l R e p o r t 2 0 0 8

CreditManagement (10 main committees)

1.CreditUnderwritingCommittee: To consider loans proposed by Commercial Credit Group and Retail

Credit Group within its approval authority; and to scrutinize the matters within the approval authority of the Board

of Directors and the Credit Committee.

2.CommercialCreditUnderwritingCommitteeandRetailCreditUnderwritingCommittee: To consider

loans proposed by Commercial Credit Group and Retail Credit Group within their respective approval authority.

3.AppraisalConsiderationandApprovalCommittee (4committees): To approve list of outside

independent appraisers; to formulate appraisal procedures; and to approve the appraisal result or revaluation

result conducted by independent external appraisers and internal appraisers for every property value.

4. CommercialAssetManagementCommittee: To review and monitor and to consider the issues

related to NPLs and NPAs within it approval authority; and to scrutinize the matters within the approval authority

of the Board of Directors and the Credit Committee.

5.RetailAssetManagementCommittee: To review and monitor and to consider the issues related to

NPLs of Retail Credit Group.

6.CollateralBiddingCommittee: To approve the purchasing price of collateral for bidding with Legal

Execution Department as per the Bank’s criteria.

In addition, the approval given by the authorized officers and committees for credit underwriting and

asset management, based on credit limit, business type and collateral type, shall be subject to the authority limit

as approved by the Board of Directors.

Products (1 committee)

NewProductandServiceCommittee: To approve product/service conditions offered to customers; and

to adjust or cancel the existing products/services as deemed appropriate.


Informationtechnology (1 main committee)

ITCommittee: To devise the policies and plans on IT system development in the short and long term;

to follow up the progress and review the plans on IT and work process development.

Humanresources (1 main committee)

HumanResourceCommittee: To propose the principles, policies, strategies and plans on manpower

and the regulations on human resource management as well as staff’s annual remuneration, salary structure,

compensation and welfare; to review manpower plans, rotation plans, training plans, and performance

management methods; and to approve the employment, appointment, and rotation of staff within the scope

assigned.

Healthandsafety:To organize projects encouraging and supporting safety-related activities; and to

define regulations on safety, occupational health and working environment to be in compliance with the

regulations of the Ministry of Labor and Social Welfare.

BoardofDirectors’meeting

A whole-year board meeting schedule shall be set in advance so that the directors could spare time to

attend each meeting. Besides normal meetings, special meeting sessions may be arranged as deemed necessary

with consent from the Board Chairman. The meeting agenda shall be set, with clearly-divided items, by the Chief

Executive Officer and approved by the Board Chairman. The Board Secretary shall deliver an invitation letter

together with the meeting agenda and meeting documents to the directors at least 7 days in advance of the

meeting date, except in an urgent case, so that the directors would have sufficient time to study the information.

In this regard, the directors may propose other issues to the meeting as deemed appropriate.

In each meeting, the directors will take time in considering each item and expressing independent opinions

for the best interest of the Bank. The Chairman will process the comments and conclude results of the meeting.

The Board Secretary is responsible for preparing the meeting minutes to be adopted by the meeting as well as for

storing the meeting minutes for future reference and for inspection by concerned parties.

Besides, the directors having related interests to the issue proposed to the meeting shall not join the

deliberation of such issue. The Board of Directors is able to hold a meeting, where the directors holding executive

position are not present with consideration of Bank and management performance.

In 2008, there were 16 meetings of the Board of Directors. Details of the meeting attendance of the Board

of Directors and board committee members are as follows:

92 A n n u a l R e p o r t 2 0 0 8

Meetingattendanceofboardandcommitteemembersin2008istabulatedbelow:

(Unit: Times)

Nomination,

Board of Board of Credit Audit Remuneration

Name Directors Executive Committee Committee and

Directors Corporate

Governance

Committee Totalno.ofmeetingsin2008 16 25 13 12 18 9

1. Mr. Somchainuk Engtrakul (*) 2/2

(Until January 31, 2008)

2. Dr. Sathit Limpongpan 15/15 2/5 2/2

(From January 15, 2008) (Until February (Until February

28, 2008) 28, 2008)

3. Mr. Chulakorn Singhakowin(*) 5/5 11/11

(Until April 25, 2008)

4. Gen. Anupong Paojinda 6/16

5. Mr. Bodi Chunnananda(*) 4/4 3/3

(Until March 31, 2008)

6. Mr. Kampree Kaocharern(*)

(Until January 18, 2008) -/1 -/1

7. Mrs. Chantra Purnariksha(*)

(Until March 3, 2008) 3/3 3/3 -/1

8. Mr. Vijit Supinit

(From January 28, 2008) 15/15 11/11

9. Mr.Philippe G.J.E.O. Damas 14/16 20/25 17/17

10. Mrs. Saowanee Kamolbutr

(From April 25, 2008) 11/11 12/13 13/13 9/10

11. Dr. Juanjai Ajanant

(From April 18, 2008) 12/12 13/13 6/6

12. Mr. Willem Frederik Nagel 7/16 6/25 6/13 8/9

13. Dr. Nipon Poapongsakorn

(From January 28, 2008) 14/15 10/11 7/7

14. Mr. Vaughn Nigel Richtor 8/16

15. Mr. Amorn Asvanunt 15/16 24/25 13/13 9/9

Risk

Management

Committee


(Unit: Times)

Nomination,

Board of Board of Credit Audit Remuneration

Name Directors Executive Committee Committee and

Directors Corporate

Governance

Committee Totalno.ofmeetingsin2008 16 25 13 12 18 9

16. Mr. Christopher John King 15/16 11/12 17/18 2/3

(Until May.

14, 2008)

17. Dr. Subhak Siwaraksa(*)

(Until July 14, 2008) 8/8 14/16 1/2 3/5

18. Mr. Boontuck Wungcharoen

(From July 14, 2008) 8/8 9/9 7/11 3/4

(*) Not holding a board member position as of December 31, 2008.

(Notes)

(1) Mr. Philippe G.J.E.O. Damas is a director who does not has residence in Thailand.

- The Board of Executive Directors meetings no. 4/2551, 14/2551 and 24/2551 and the Nomination, Remuneration and

Corporate Governance Committee meetings no. 6/2551, 9/2551, 12/2551 and 14/2551: Mr. Philippe G.J.E.O. Damas

joined the meetings through teleconferencing/videoconferencing system.

(2) Mr. Willem Frederik Nagel is a director who does not has residence in Thailand.

- The Board of Executive Directors meetings no. 3/2551, 8/2551, 13/2551, 14/2551 and 15/2551 and the Credit Committee

meetings no. 1/2551, 6/2551, 7/2551, 9/2551, 11/2551 and 13/2551: Mr. Willem Frederik Nagel joined the meetings

through teleconferencing/videoconferencing system.

(3) In the Nomination, Remuneration and Corporate Governance Committee meetings no. 7/2551 and 9/2551, Mr. Christopher

John King joined the meetings through teleconferencing system.

Recruitmentofdirectorsandexecutiveofficers

Recruitmentofdirectors

According to the Bank’s clear and transparent director appointment process, the Nomination,

Remuneration and Corporate Governance Committee is responsible for the selection, screening, and nomination

of qualified persons to the Board of Directors for consideration before proposing to the shareholders’ meeting for

further election as directors of the Bank. Apart from the qualifications prescribed in the Bank’s Articles of

Association and the appropriate personal qualifications, the persons nominated must be competent,

knowledgeable and experienced in business operations with the possession of leadership skills, visionary and

strategic ideas that can lead the Bank to a strong and sustainable growth and must be able to dedicate their time

for the optimum benefits of the Bank.

Risk

Management

Committee

94 A n n u a l R e p o r t 2 0 0 8

In case of vacancy due to the resignation of a director, the Board of Directors shall appoint a person to fill

the vacant position through the nomination made by the Nomination, Remuneration and Corporate Governance

Committee. The said new director shall hold office only for the remaining term of office of the director whom he/

she has replaced.

Recruitmentofexecutiveofficers

In the appointment process of the executive officers at group head level and higher, the Nomination,

Remuneration and Corporate Governance Committee is responsible for selecting and screening qualified persons

from both internal and external organizations as defined in TMB’s Articles of Association. The nominated persons

will be proposed for approval from the Board of Directors. Regarding the appointment process of the executive

officers at department head level and lower, the Management shall consider, select and appoint qualified persons

as deemed appropriate.

In this regard, the selection process shall be made at least 6 months in advance for the position of the

executive who has a specified term of office.

Remunerationfordirectorsandexecutives

The Bank has a policy to set the remuneration for directors in an appropriate amount and in accordance

with their roles and responsibilities to achieve the Bank’s targets and in line with relevant regulations and

expectation of all stakeholders. The remuneration shall also be set on a par with those of other institutions. Board

of Directors can set the remuneration for additional sub committee (if any) Sub committee remuneration will be

included in the amount approved by the AGM.

The remuneration policy is set out in a clear and transparent manner. The Nomination, Remuneration and

Corporate Governance Committee is responsible for reviewing the remuneration for directors before submission

for the Board of Directors consideration. The remuneration shall be proposed for approval from the annual

shareholders’ meeting. The remuneration is set as follows:

1. Monthly fee

1.1 Retaining fee - Director is entitled to the retaining fee for one position only.

1.2 Committee fee - Director is entitled to the committee fee for every board and

committee that he/she sits on.

2. Attendance fee - Director is entitled to the attendance fee for every meeting where

he/she is present.


Cashremuneration

1. Retaining fee

Chairman - The Board of Directors Bt. 1,800,000 / year

- The Board of Executive Directors Bt. 1,440,000 / year

- The Credit Committee Bt. 696,000 / year

- The Audit Committee Bt. 696,000 / year

- The Nomination, Remuneration and Bt. 446,400 / year

Corporate Governance Committee

- The Risk Management Committee Bt. 696,000 / year

Member - The Board of Directors Bt. 384,000 / year

- The Board of Executive Directors Bt. 422,400 / year






2. Committee fee

Chairman - The Board of Directors Bt. 1,800,000 / year

- The Board of Executive Directors Bt. 1,440,000 / year






Member - The Board of Directors Bt. 384,000 / year

- The Board of Executive Directors Bt. 422,400 / year






3. Attendance fee

Chairman - The Board of Directors Bt. 40,000 / attendance

- The Board of Executive Directors Bt. 40,000 / attendance

- The Credit Committee Bt. 32,400 / attendance

- The Audit Committee Bt. 32,400 / attendance

96 A n n u a l R e p o r t 2 0 0 8

Nameofdirector Details

1. Mr. Somchainuk Engtrakul (*) Receiving Baht 380,000 for serving as Chairman of the Board of Directors.

(Until January 31, 2008)

2. Dr. Sathit Limpongpan Receiving Baht 4,041,600 for serving as Chairman of the Board of Directors

(From January 15, 2008) and on the Board of Executive Directors and the Nomination and


3. Mr. Chulakorn Singhakowin (*) Receiving Baht 1,678,000 for serving on the Board of Directors

(Until April 25, 2008) and as Chairman of the Board of Executive Directors.

4. Gen. Anupong Paojinda Receiving Baht 948,000 for serving on the Board of Directors.

5. Mr. Bodi Chunnananda (*) Receiving Baht 661,200 for serving on the Board of Directors

(Until March 31, 2008) and as Chairman of the Audit Committee.

6. Mr. Kampree Kaocharern (*) Receiving Baht 95,200 for serving on the Board of Directors

(Until January 18, 2008) and the Audit Committee.

7. Mrs. Chantra Purnariksha (*) Receiving Baht 525,200 for serving on the Board of Directors

(Until March 3, 2008) and the Risk Management Committee and as Chairman of the

Nomination, Remuneration and Corporate Governance Committee.

8. Mr. Vijit Supinit Receiving Baht 2,300,200 for serving on the Board of Directors

(From January 28, 2008) and the Audit Committee and as Chairman of the Audit Committee.

9. Mr. Philippe G.J.E.O. Damas Not entitled to receive the monetary remuneration as per the criteria

of ING Bank N.V.

10. Mrs. Saowanee Kamolbutr Receiving Baht 3,052,800 for serving on the Board of Directors,

(From April 25, 2008) the Board of Executive Directors, and the Nomination, Remuneration

and Corporate Governance Committee and as Chairman of the

Credit Committee.

- The Nomination, Remuneration and Bt. 30,400 / attendance


- The Risk Management Committee Bt. 32,400 / attendance

Member - The Board of Directors Bt. 30,000 / attendance

- The Board of Executive Directors Bt. 31,200 / attendance

- The Credit Committee Bt. 24,600 / attendance

- The Audit Committee Bt. 24,600 / attendance

- The Nomination, Remuneration and Bt. 23,200 / attendance


- The Risk Management Committee Bt. 24,600 / attendance

In 2008, all of the 18 directors received remuneration for serving on the Board of Directors and other

committees in a total amount of Baht 24,308,200. The details are as follows:


Nameofdirector Details

11. Dr. Juanjai Ajanant Receiving Baht 2,056,800 for serving on the Board of Directors

(From April 18, 2008) and the Risk Management Committee and as Chairman of the

Nomination, Remuneration and Corporate Governance Committee.

12. Mr. Willem Frederik Nagel Not entitled to receive the monetary remuneration as per the criteria

of ING Bank N.V.

13. Dr. Nipon Poapongsakorn Receiving Baht 2,198,200 for serving on the Board of Directors,

(From January 28, 2008) the Audit Committee and the Risk Management Committee.

14. Mr. Vaughn Nigel Richtor Not entitled to receive the monetary remuneration as per the criteria

of ING Bank N.V.

15. Mr. Amorn Asvanunt Receiving Baht 3,592,800 for serving on the Board of Directors,

the Board of Executive Directors, the Credit Committee and

the Risk Management Committee.

16. Mr. Christopher John King Receiving Baht 2,778,200 for serving on the Board of Directors,

the Audit Committee, the Nomination, Remuneration and Corporate

Governance Committee and the Risk Management Committee.

17.Dr. Subhak Siwaraksa (*) Not entitled to receive the monetary remuneration as per the criteria

(Until July 14, 2008) of TMB.

18. Mr. Boontuck Wungcharoen Not entitled to receive the monetary remuneration as per the criteria

(From July 14, 2008) of TMB.

Note : * Not holding a board member position as of December 31, 2008.

Otherbenefits

The Bank provided other benefits and necessary welfares to the directors in a total amount of

Baht 2,544,400.

Remunerationforexecutives

During the accounting year ended December 31, 2008, the Bank’s 32 executives received remuneration in

a total amount of Bt. 144.08 million, consisting of salary, bonus, provident fund and other benefits.

(Executives refer to managers, the first four executives under each manager’s command line, and every 4th executive, excluding

accounting manager or finance manager if the position of the department manager is not at the same level as that of the 4th

executive.)

Moreover, on February 1, 2006 the Bank issued and offered for sale the warrants to purchase the Bank’s

ordinary shares to the Bank’s employees under the Employee Stock Option Program (ESOP) amounting to

68,158,000 units at the offering price of Bt. 0/unit. The warrants are valid for a period of 5 years from the date of

issue and offering for sale. The warrant of 1 unit is entitled to a purchase of 1.051 ordinary shares, with the

exercise price of Bt. 4.480 (as per the right adjustment in 2006). The warrant holder may exercise the right to

purchase the Bank’s ordinary shares after a lapse of 2 years of the warrant life. The right may be exercised every

98 A n n u a l R e p o r t 2 0 0 8

6 months on the 31st of January and July each year throughout the period of the warrants. The first date of

exercise is on July 31, 2008 and the last on July 31, 2011. In this regard, the warrants allocated to the Bank’s

executives accounted for 0.26% of the warrants issued and offered for sale.

ShareholdingoftheBoardofDirectorsandExecutivesas at December 31, 2008

BoardofDirectors

Shareholding Family

Name-Surname Positions InTMB Relationship**

(%)*

1. Dr. Sathit Limpongpan Chairman of the Board - -

2. General Anupong Paojinda Director 0.0002 -

3. Mr. Philippe G.J.E.O. Damas Director - -

4. Mr. Vijit Supinit Director - -

5. Dr. Juanjai Ajanant Director - -

6. Dr. Nipon Poapongsakorn Director - -

7. Mr. Amorn Asvanunt Director - -

8. Mrs. Saowanee Kamolbutr Director - -

9. Mr. Willem Frederik Nagel Director - -

10. Mr. Vaughn Nigel Richtor Director - -

11. Mr. Christopher John King Director - -

12. Mr. Boontuck Wungcharoen Director / Chief Executive Officer 0.0053 -

ExecutiveOfficers

Shareholding Family


(%)*

1. Mr. Donald Joseph Koch Chief Operating Officer - -

2. Mr. Ramakrishnan Subramanian Chief Retail Banking Officer - -

3. Mr. Bart F.M. Hellemans Chief Risk Officer - -

4. Mr. Sayam Prasitsirigul Chief SME Banking Officer - -

5. Dr. Piti Tantakasem Chief Wholesale Banking Officer - -

6. Dr. Chandraleka Wiriyawit Acting Chief Financial Officer and

Senior Executive Vice President 0.0013 -

7. Miss Saipin Kittipornpimol Executive Vice President - -

8. Mr. Peera Chinwannabutr Executive Vice President - -


Shareholding Family


(%)*

9. Mr. Satian Tantanasarit Executive Vice President - -

10. Mr. Surakiat Wongwasin Executive Vice President - -

11. Mr. Vasan Choophaichitr *** Executive Vice President - -

12. Mr. Charan Mongkolchan *** Executive Vice President 0.0004 -

13. Mr. Sopon Kluaymai-Na-Ayudhya Executive Vice President - -

14. M.L. Ayuth Jayant Executive Vice President 0.0028 -

15. Mr. Luecha Sukrasebya Executive Vice President 0.0003 -

16. Miss Utoomphorn Kunakorn Executive Vice President - -

17. Dr. Agapol Na Songkhla Executive Vice President 0.0002 -

18. Mr. Siripong Sombatsiri **** Executive Vice President - -

19. Mr.SomsakWoravijak ExecutiveVicePresident่ - -

20. Mr. Martin Alan Searle Executive Vice President - -

21. Miss Oranuj Tantimedh Executive Vice President - -

22. Dr.SutapaAmornvivat ExecutiveVicePresident่ - -

23. Mr. Paphon Mangkhalathanakun Executive Vice President - -

24. Mrs. Vallapa Posyanond Executive Vice President - -

25. Mr. Vikran Paovarojkit Executive Vice President - -

26. Mr. Thawatchai Techawatanawana Executive Vice President 0.0549 -

27. Mrs.KanchanaRojvatunyu ExecutiveVicePresident่ - -

28. Mr. Silawat Santivisat Executive Vice President - -

29. Mr. Pradit Leosirikul Executive Vice President - -

30. Mr. Vichit Chantachaeng Executive Vice President 0.0000 -

31. M.L. Siriwan Kasemsant Senior Vice President, - -

Head of Compliance Group

32. Miss Nisa Laohasomboon Senior Vice President, - -

Head of Financial Reporting Department

33. Miss Supamas Woranantaku Senior Vice President, - -

Head of General Accounting Department

34. Mrs. Voraluck Chokchaitam Senior Vice President, - -

Head of Management Accounting

Department

35. Mr. Kamran Rafi Senior Vice President, - -

Head of Performance Measurement

100 A n n u a l R e p o r t 2 0 0 8

Shareholding Family


(%)*

36. Mr. Chanpichai Chinsamran First Vice President, - -

Head of Financial Application

System Support Department

37. Mrs. Ruamporn Nanthawong First Vice President, Head of Cost - -

Management and Control Department

Remark: Executives refer to managers, the first four executives under each manager’s command line, those in the positions equivalent to the 4th person at the executive level, and also refer to those in the positions at the executive level in the Accounting Group or Finance Group at the level of department head or equivalence * Including shareholding of spouse and minor children ** Family relationship by blood, marriage or registration under the laws *** Retired December 31, 2008 **** Resigned January 1, 2009


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102 A n n u a l R e p o r t 2 0 0 8

DetailsoftheSubsidiariesDirectors

1. PhayathaiAssetManagementCo.,Ltd.

There are three directors as follows:

1. Mr. Krissada Jeenawijarana

2. Mr. Vichit Chantachaeng

3. Ms. Utoomphorn Kunakorn

2.DesigneeforETAContractsCo.,Ltd.

There are three directors as follows:

1. Mr. Thawatchai Techawatanawana

2. Ms. Sawittree Chaichoavalit

3. Mr. Somsak Koonchareon

3.TMBAssetManagementCo.,Ltd.

There are eight directors as follows:

1. Mrs. Jotika Savanananda

2. Mr. Subhak Siwaraksa

3. Mrs. Sirichan Pipitwitayakul

4. Ms. Somnuk Wiwatana

5. Mrs. Ratana Lengsiriwat

6. Ms. Nisa Laohasomboon

7. Mr. Luecha Sukrasebya

8. Mr. Anuphun Tungsnga

CorporateGovernanceReport

Business operations with adherence to morality and ethics as well as prudent and competent management

are key components in the promotion of good governance in an organization. This will provide a solid foundation

for a standard business entity with efficient, transparent and reliable operations; hence enhancing its

competitiveness, added business value, and sustainable profitability and growth.

Financial institutions, especially the “banking business,” play a vital role in promoting the national

economic and social development. The banking business is intertwined with the general public way of life

through deposit acceptance, credit rendering and other financial services. The public confidence and trust are

crucial to banks’ survival. Thus, the banks’ duties and responsibilities toward the public are of high significance

compared with those of other business sectors.


TMB has recognized the utmost importance of corporate governance and has adhered to this. It is our

belief that with good governance principles and procedure, including transparent operations on the part of the

directors, executives and employees of all levels, the Bank will be able to carry out its business successfully even

amid the changing economic circumstances and fierce competition, and with optimum benefits to its shareholders,

customers, investors and all other stakeholders. The Bank has also operated with assurance that its operations

meet international standards and strictly comply with relevant laws and regulatory requirements.

In order to ensure integrity and transparency in the business operations and management, with equitable

treatment to all stakeholders to safeguard against conflicts of interest and maintain good reputation, the Bank has

laid down a Corporate Governance Policy. The policy covers all relevant regulatory issues and serves as

guidelines for strict compliance by the Board of Directors, executives and employees of all levels so as to bring

about good corporate governance for the Bank.

The Board of Directors of the Bank has approved the Corporate Governance Policy as written guidelines

announced to all bank personnel, i.e. Board of Directors, management and bank staff for their acknowledgement

and on-going compliance. The Board of Directors has put best efforts in ensuring the policy is implemented; and

review, improvement and modification are undertaken to updated and align with the changing situations, as well

as its translated into rigorous practice for the benefits of the Bank, shareholders and other stakeholders.

In 2008, the Bank continued its commitment to the transparent and fair operations under good corporate

governance, on-going development of which will be pursued. Its corporate governance practice in the year can be

summarized here:

1. The Board of Directors passed a resolution ranaming and restructuring the Nomination and

Remuneration Committee as the Nomination, Remuneration and Corporate Governance Committee to assist the

Board of Directors in overseeing and ensuring the Bank’s operations and the performance of duties of the Board

of Directors, Board committees, management and employees in compliance with corporate governance principles.

(Please refer to details in the item “Scope of duties and responsibilities of Nomination, Remuneration and

Corporate Governance Committee”).

2. The Board of Directors passed a resolution appointing the Company Secretary to perform duties and

responsibilities as prescribed by law and to perform duties that support the Board of Directors’ performance of

duties in relation to rules, regulations and laws, as well as best practice.

3. The Board of Directors mapped out procedures for the shareholders to propose items on the agenda of

the shareholders’ meeting and nominate candidates in the election of directors before the shareholders’ meeting is

held. This allows the shareholders to participate in raising the issues that will benefit the Bank’s development, and

nominating qualified and competent candidates for election as directors to perform duties efficiently in the best

interests of the Bank and all stakeholders.

104 A n n u a l R e p o r t 2 0 0 8

4. The Board of Directors passed a resolution approving the implementation of a corporate governance

self-assessment exercise of the Board of Directors and Board committees as a channel for them to review their

performance and address problems and hindrances arising in the past year.

To enable the banking business to be in compliance with the principles of good corporate governance for

listed companies as per the SET’s guidelines, the Bank would like to present a summarized report on its

compliance with the principles of good corporate governance as follows:

1. Rightsofshareholders

The Bank has facilitated all shareholders to ensure they can fully exercise their basic rights, i.e.

independent purchase, sales and transfer of securities they hold, and safeguarded the interests of all

shareholders, comprising major shareholders, minor shareholders, individuals and institutions on an equitable

basis in the access to accurate and updated information of the Bank.

The annual general meeting of shareholders has been determined to be held annually within four months

from the end of the fiscal year (December 31). In case of any special issue that needs to be proposed as an

urgent and necessary case, and where the approval of the shareholders’ meeting is required pursuant to the

applicable conditions, rules or laws, the Bank will call an extraordinary general meeting of shareholders on a case

by case basis.

The Bank has a policy to arrange the shareholders’ meeting with efficiency and transparency and in

compliance with relevant regulations and regulatory requirements. Meeting agenda and documents are to be

delivered to the shareholders in advance, with sufficient information provided to support the shareholders’

consideration and decision to vote on each agenda with their full use of rights. On the meeting date, appropriate

registration procedure has been prepared by the Bank, with facilities provided by Bank staff for the shareholders

and proxies.

In 2008, the Bank held the 2008 Annual General Meeting of Shareholders (AGM) on Friday, April 25, 2008,

at the Auditorium, Floor 7, TMB Head Office. Altogether 1,300 shareholders and proxies, holding a total number of

32,216,750,713 shares or 74.01% of the total shares sold, and eight directors attended the meeting.

The meeting procedures conformed to the good corporate governance principles as below:

1.1Beforethemeeting

The shareholders had full access to necessary information on the meeting date and the agenda in

advance on the Bank’s website so that they would have adequate time to study the information before receiving

the documents. The Bank had assigned Thailand Securities Depository Co., Ltd. (TSD), its share registrar, to

send out to all shareholders the invitation notice, with details stipulated therein regarding the meeting date, time

and venue, as well as complete information necessary for the meeting. The invitation notice stated the objectives

and rationale as well as the opinions of the Board of Directors on each item, accompanied by complete and


sufficient details for the consideration of each item and for the decision to vote on each item. Shareholders were

clearly informed which item would be for consideration and which one for acknowledgement. Moreover, in the

invitation notice, the shareholders were informed of the details regarding necessary evidence documents to be

brought to the meeting.

A proxy form was also enclosed so that the shareholders could use in appointing any of the Bank’s

designated independent directors or other persons as their proxies in case they could not attend the meeting.

1.2Duringthemeeting

The meeting was arranged with transparency, fairness and equitable treatment of all shareholders.

Appropriate registration procedure was prepared by the Bank, with facilities provided by Bank staff, classified by

type of attendees, i.e. shareholders attending in person and proxies attending on shareholders’ behalf. This aimed

at ensuring rapid and accurate registration procedure. Voting card was available for each attendee to vote on

each item on the agenda. Moreover, the Bank also provided shuttle bus service at various spots and sufficient

parking space to serve the shareholders.

At the 2008 AGM, the Chairman of the Board of Directors served as Chairman of the meeting, and

Chairman of each Board committee, namely Audit Committee; Nomination, Remuneration and Corporate

Governance Committee, and Risk Management Committee, together with the President and Chief Executive

Officer, were also present at the meeting to clarify and answer questions of relevant issues. Before the beginning

of the meeting, the Chairman clearly informed the meeting of the voting and counting methods. For more

convenience to the shareholders, a simultaneous English translation was provided by Bank staff for foreign

shareholders. In this regard, the shareholders’ right to study of the Bank’s information memorandum would not be

undermined, such as no abrupt distribution of additional document with key information during the meeting, no

addition of new items on the agenda or change in the key information without prior notice to the shareholders, no

prohibition of meeting attendance of late attendees, and so on.

The Chairman proceeded with the meeting in order of the items on the agenda. In consideration of

certain items on the agenda in which directors who joined the meeting have interests or have relation thereto, e.g.

election of directors to replace those who retire by rotation, the Chairman informed the meeting thereof and such

directors would abstain from joining the consideration and voting thereon. The Chairman also encouraged the

shareholders to cast votes and raise questions and comments. Importance was given to all the recommendations

or comments made by the shareholders, with all questions comprehensively clarified and all useful suggestions

brought into account. The vote casting and the vote counting were undertaken openly and transparently.

At the 2008 AGM, White & Case (Thailand), Ltd., legal consultant, was invited to witness the vote counting on

all agenda items. The meeting minutes and detailed votes on all items, as well as crucial questions, answers and

comments, were recorded completely and accurately by the Company Secretary.

106 A n n u a l R e p o r t 2 0 0 8

1.3Afterthemeeting

After the meeting, the minutes of the meeting that would be proposed for adoption at the next meeting

were submitted to the relevant authority within the specified period, and also available to the shareholders on the

Bank website.

In 2008, the Office of the Securities and Exchange Commission (SEC) in cooperation with the Thai

Investors Association and the Listed Companies Association jointly conducted quality assessment of the Annual

General Meeting for 2008, thereby the 2008 AGM of the Bank was rated “Very Good.”

2. Equitabletreatmentofshareholders

The Bank has been determined to conducting business under good corporate governance principles to

assure all shareholders, i.e. major shareholders, minor shareholders, individuals and institutions, Thai and foreign

alike, of their rights to fair and equitable treatment as follows:

2.1Righttoattendtheshareholders’meeting

For each shareholders’ meeting, all shareholders will have equitable right to attend the meeting.

Opportunity is opened to those who are unable to attend the meeting in person to appoint proxies to attend and

vote at the meeting on their behalf. The Bank has arranged to have its independent directors who do not have

interests in the business on the agenda be available for the appointment as proxies. The shareholders may

appoint other persons as their proxies.

2.2Righttovoteattheshareholders’meeting

At each meeting of shareholders, the Bank specifies that the rights to vote shall be accordance with the

amount of shares held by the shareholders, with one share equivalent to one vote. The voting shall be carried out

rapidly and the counting of the votes shall be transparently disclosed, with one share equivalent to one vote. The

majority votes will be considered as the resolution except for special resolutions of certain cases set forth by the

laws requiring the votes of at least three-fourths of the votes of all the shareholders attending the meeting and

having the rights to vote. As regards the voting method, the Bank shall have the shareholders vote by ballot in the

case of dissenting votes and abstentions. Furthermore, the Bank will notify to the shareholders the voting result

on every item once the counting is finished, divided into approval votes, dissenting votes and abstentions, as well

as invalid ballots. The resolution of the meeting according to the voting result on each item will be recorded in

writing and all ballots will be kept for further examination.

2.3Righttoappointdirectorsindividually

At each meeting of shareholders, the Bank has an agenda item concerning the election of the Bank’s

directors. The shareholders are allowed to vote for the election of directors one by one which is the practice in

conformity with good corporate governance that shareholders have the rights to choose the person/s that they

deem having proper qualifications to perform duties as directors so as to safeguard the shareholders’ interests.

This will enable the Bank to have directors from diversified fields to represent the shareholders. The Bank also

has an agenda on directors’ remuneration to be proposed for consideration and approval on an annual basis.


2.4Managementofconflictofinterest

The Bank has scrupulously placed importance to the management of conflict of interest of the Bank

and its subsidiaries on a transparent and fair basis, disclosed information and transactions in a complete and

timely manner, and also overseen the directors, executives and staff at all levels to concern and comply with

regulatory requirements regarding conflict of interest.

The consideration of the transactions that may involve conflict of interest or the connected transactions

or the related transactions has been made stringently in accordance with the regulatory regulations and

international standards, as well as in its normal business operation course and criteria. These transactions have

been treated the same as those made with outside parties. Stakeholders in any transaction shall not participate

in the consideration and approval of such transaction. The information is disclosed transparently under corporate

governance practice.

The Bank exercises caution to prevent the Bank and/or its employees from using customers’

information or secret to conduct business in competition with the customers’ business, and not to support any

employees’ activities that will lead to conflict of interest including prevent them from abuse of their duty and

authority for personal benefits.

In the monitoring of the use of inside information, the Bank requires that all directors, executives and

concerned officials comply fully with the rules and regulations regarding securities trading and disclosure of their

securities holding. They must also acknowledge the prohibitions and penalties relating to the use of inside

information for their personal or others’ benefits and the premature disclosure of information to the general public.

2.5 Righttoproposetothemeetingagendaitemsandmakedirectornominations

The Bank has realized the importance of the rights and the equitable treatment of shareholders which

are part of corporate governance practice. It has allowed the shareholders to propose issues for the meeting

agenda and make director nominations in advance. The Bank has clearly posted on its website as well as

through the SET informing the shareholders of such right and procedure as well as the Bank’s criteria and

timeframe set at one month within which they are to make proposals.

3. Roleofstakeholders

The Bank has realized the importance of equitably treating all stakeholders, comprising shareholders,

employees, customers, business partners and creditors, investors, government authorities and the society, and

other relevant parties. The Bank has put in place the system to handle customers’ complaints and resolve their

problems with prudence and fairness. Customer information is to be kept confidential in compliance with the

agreements made with business partners. The Bank‘s business operations are based on fair and ethical

competition. The employees have been treated fairly and equally. Training has been provided to enhance staff’s

knowledge and efficiency, and fair compensation scheme has been mapped out. The Bank has also promoted

corporate governance culture within the organization.

108 A n n u a l R e p o r t 2 0 0 8

To ensure all stakeholders’ full access to their rights, the Bank has laid down guidelines for all stakeholders

as follows:

• Shareholders

The Bank has targeted to achieve satisfactory operational performance, with consistent growth of

returns, which will boost the Bank’s value contributed to the shareholders in form of higher share price and

attractive dividend payment, as well as complete and transparent information disclosure in line with regulatory

requirements and standards.

• Employees

The Bank is determined to provide personnel development and training programs to create optimal

benefits to the Bank. It has also set sight to creating good organizational culture and work environment, and

ensuring employees’ opportunity to grow in their career path, with attractive and reasonable compensation, which

will enhance their pooled efforts in operations.

• Customers

The Bank has taken the customer centricity strategy in its business operations to provide the

customers with diversified services and products that can well respond to their needs and create maximum

customer satisfaction.

• Businesspartnersandcreditors

The Bank has all along honored business agreements, with emphasis placed on the fostering of long-

term relationship and sustainable business partnership.

• Investors

The Bank has been committed to disclosure of correct, complete and sufficient information to timely

serve investors’ decision making.

• Governmentagencies

The Bank has been determined to strictly carry out business in compliance with the relevant laws,

rules, regulations and criteria of the authorities.

• Corporatesocialresponsibility

The Bank has recognized the significance of corporate social responsibility (CSR). With a strong

commitment to and awareness of its accountability to the society, the Bank has supported various activities

relating to the promotion of social quality in many respects and has followed up the results of which for further

improvement. In 2008, the Bank supported a number of social and environmental activities, e.g. Young Investors

Training Program in central and regional areas, New Entrepreneur Creation Program, Marching Band Contest,

scholarships for military officers’ children, undergraduate scholarships, Royal Kathin Ceremony, donation to those

hit by cold weather, etc.


4. DisclosureandTransparency

The Bank has ensured transparent and adequate disclosure of information to support investment decision.

The Board of Directors is responsible for reporting the Bank’s operating results and significant events in each year

for shareholders’ acknowledgement, and confirming the completeness and accuracy of its financial report

submitted to the shareholders in conformity with the generally accepted accounting standards. Notes to financial

statements are made available in the annual report. The Bank also provides in the annual report the Board of

Directors’ responsibility for financial statements and report of the independent auditor.

In addition to the disclosure of financial report and other information as prescribed by the law, the Bank has

emphasized on the disclosure of essential news and information to timely serve the shareholders, investors and

the public. To this effect, Investor Relations Department has been set up under Corporate Governance Group to

clearly take charge of disclosing information to the parties concerned. Its policy is to disseminating both financial

and non-financial information to both Thai and non-Thai shareholders, investors, analysts and credit rating

agencies, with accuracy, completeness, transparency and timeliness, and in accordance with the relevant laws

and regulations so that those stakeholders will receive useful information for their investment decisions. This will

help build up confidence, good image and reliability to the Bank among the investors and concerned parties.

In 2008, the Bank met with and provided information to concerned parties on the following occasions:

Typesofmeeting Number Number Number

oftimes ofcompanies ofpersons

One-on-one meeting 42 43 54

Teleconference call 2 5 5

Investor and analyst conference 1 56 76

Total 45 104 135

In addition, the Bank arranged for information dissemination through the following channels: 1. The Stock Exchange of Thailand (SET) 2. The Office of the Securities and Exchange Commission (SEC) 3. Ministry of Commerce 4. Newspapers/magazines 5. Television 6. Electronics media: TMB website (http://www.tmbbank.com) 7. News release and press conference 8. Newsletters sent directly to shareholders 9. Questions and answers through E-mail and call center Investor relations contact: Investor Relations Department, Corporate Governance Group Floor 28, TMB Head Office Tel. 0-2299-2519 Fax. 0-2273-7640 Email address : [email protected]

Website: http://www.tmbbank.com

110 A n n u a l R e p o r t 2 0 0 8

Shareholder service:

Tel. 0-2299-1391 or 0-2299-1406

Fax. 0-2299-2758

5. TheResponsibilitiesoftheBoardofDirectors

TMB Board of Directors is composed of independent directors, non-executive directors, and executive

directors. It is thus a diversified composition that allows for independent expression of opinions and balance of

management power. The members are professionals from diversified fields of knowledge, expertise and

backgrounds, which have essentially contributed to the consideration and resolution of meeting issues. They have

attached importance and devoted their time to the Bank’s business, through the Board of Directors’ meetings and

those of Board committees to ensure efficiency in the business operations with optimum benefits to the Bank.

The Board of Directors plays a key role in drawing up the Bank’s vision and mission, and formulate its

policies, targets, and direction in the operations, both short-term and long-term, to be in line with the economic

conditions and cope with the competitive environment. These policies are practical and adjustable amidst the

complex and rapidly changing business circumstances. There are clear guidelines set out for evaluation of

operational performance. Besides, the Board has supervised to ensure that the management has run the business

in line with the policies and plans set forth and in an effective, efficient, and transparent manner. The Board has

also monitored the Bank’s management of risk to ensure acceptable risk level, and its audit and internal control

systems in conformity with the laws and regulatory requirements.

Another important role of the Board is to seek, promote, and develop the employee competence and ethics

with suitable compensation scheme drawn up to be competitive with those in the financial market and support the

Bank’s business expansion for the utmost benefits of not only the Bank, but also the shareholders and all other

stakeholders.

StructureoftheBank’sBoardofDirectors

1.BoardofDirectors’structure

As of December 31, 2008, the Board of Directors was composed of 12 members as follows:

• 1 executive director

• 7 non-executive directors

• 4 independent directors

The Board structure has been set out with clear and transparent scope of responsibilities, not allowing

any person or group of persons to have unlimited power. To enable an appropriate check and balance, one-third

of the total number of the directors are independent directors pursuant to the regulatory criteria and with the

qualifications as required by the relevant laws or regulations. The qualifications of independent directors defined


by the Bank are more rigorous than those by the SEC. In this respect, independent directors are able to express

their opinions on an independent and impartial basis to bring about the best benefits to the Bank as well as to

prevent conflicts of interest.

In order to relieve the Board of Directors’ burden in scrutinizing and considering essential businesses of

the Bank, a number of Board committees have been set up by the approval of the Board of Directors to be tasked

with overseeing and ensuring the Bank’s transparent and effective business operations. The Board committees

shall have the authority to make decision on behalf of the Board subject to the Board’s delegation of authority,

duty and responsibility. The Bank’s Board committees comprise the Board of Executive Directors; the Audit

Committee; the Risk Management Committee; the Nomination, Remuneration and Corporate Governance

Committee; the Credit Committee; and others as deemed necessary.

The qualified persons to be appointed as members in each Board committee are selected by taking into

account the appropriate qualifications, capabilities, and experience. The responsibilities of each committee are

clearly defined. Meetings have been held regularly. Committee members have devoted their time to the

supervision of the Bank’s business operations to ensure that they are in line with the plans and consistently

submission of the reports of which for the Board’s acknowledgement.

2.BoardofDirectors’meeting

The Board of Directors’ meeting is held regularly on a monthly basis. The meeting date shall be set in

advance so that the Board members are able to plan the attendance of the meeting. Besides normal meetings,

special meeting sessions may be arranged as deemed necessary. The meeting agenda shall be determined by

the Chief Executive Officer and approved by the Chairman of the Board. Meeting documents shall be distributed

to the directors in advance so that they can study the information to support their decision making. In addition,

each director may propose items to be put in the agenda for the meeting, and fully and independently express

their opinions. The directors with conflict of interest in any agenda item shall not participate and exercise their

voting right on such item. To allow for independent consideration, the Chairman will process the comments and

make conclusion on the consideration results of the meeting.

After every Board meeting, the Secretary to the Board is responsible for preparation of the meeting

minutes which are to be adopted in the first agenda item at the next meeting. The adopted meeting minutes shall

be filed and kept in an orderly manner available for use as reference and inspection at all times.

3.AppointmentofCompanySecretary

The Board of Directors has appointed M.L. Ayuth Jayant, Executive Vice President, Head of Corporate

Governance Group, as Company Secretary to perform duties and responsibilities on behalf of the Bank or the

Board of Directors as prescribed by the laws, and support as well as handle the Board’s activities in relation to the

laws, rules, regulations and best practices.

112 A n n u a l R e p o r t 2 0 0 8

Besides the duties prescribed by the laws, the Company Secretary has the following roles and

responsibilities:

1.FortheBank

(1) Serving as the center for corporate records, such as certificate of corporation,

memorandum and articles of association, shareholder register and business licenses.

(2) Arranging and ensuring that disclosure of corporate information and relevant regulatory

filings are in accordance with the laws and regulations as well as the disclosure policy of the Bank.

2. FortheBoard

(1) Arranging the meetings of the Board and Board committees in conformity with the

relevant laws, the Bank’s articles of association, the respective charters of the Board and Board committees, and

best practices.

(2) Informing the management of the Board’s resolutions and policies and follow up the

management’s implementation thereof.

(3) Providing preliminary advice and recommendations pertaining to legal, regulatory and

governance issues and practices to the Board and Board committees.

(4) Providing data and information on the issues relating to the Bank’s business operations

to the Board members to support the Board’s performance of duties.

(5) Providing director briefings to newly elected directors.

(6) Encouraging and facilitating the Board members to participate in director training and

development programs.

3.FortheShareholders

(1) Arranging the shareholders’ meetings in conformity with the relevant laws, the Bank’s

articles of association, relevant rules and regulations, and best practices.

(2) Informing and communicating to the shareholders in general about their rights and the

Bank’s developments.

4.Nominationandappointmentofdirectorsandexecutives

4.1Directornominationcriteria

The Bank has put in place a definite and transparent director nomination process. The Nomination,

Remuneration and Corporate Governance Committee shall be in charge of seeking, screening and nominating

qualified candidates to the Board for endorsement before proposal to the shareholders’ meeting for election of

directors. The candidates, besides having qualifications as prescribed by the regulatory criteria and the Bank’s

regulations, shall have knowledge, expertise and experience in the business arena, and leadership, visionary and

strategic thinking skills and competence, as well as be able to contribute their time for the best benefits and the

firm and sustainable growth of the Bank’s business operations.


In case of any directorship vacancy for reasons other than retirement by rotation, the Board shall

appoint a person as replacement upon consideration and endorsement by the Nomination, Remuneration and

Corporate Governance Committee. The replacing director shall hold office only for the remaining term of office of

the director whom he has replaced.

4.2Independentdirectornominationcriteria

The Bank has been aware that independent directors take a vital role in safeguarding the interests of

the Bank and the minor shareholders. To enhance independence of the Board of Directors and manage conflicts

of interest pursuant to the regulatory criteria and the corporate governance principles, the Board has formulated

criteria for nomination of independent directors from professionals of diversified fields with proper qualifications

and experience who can deliver independent opinions and have fairness in the performance of duty. The

Nomination, Remuneration and Corporate Governance Committee shall make preliminary consideration of the

nomination of independent directors before submission to the Board meeting or the shareholders’ meeting (as the

case may be) for appointment thereof. The basic qualifications of an independent director shall be as defined by

the SEC, the SET and the Bank of Thailand (BoT), and in accordance with corporate governance practices.

At present (as of December 31, 2008), there are 12 Board members, four of whom are independent

directors. According to the Bank’s criteria, the number of independent directors shall be at least one-third of the

total number of directors and shall not be fewer than three. The Bank’s definition of independent directors is more

rigorous than that set as a minimum by the SET.

4.3Seniorexecutivenominationcriteria

In the appointment of senior executives from the level of heads of function groups upward, the

Nomination, Remuneration and Corporate Governance Committee shall screen and nominate either internal or

external individuals with proper qualifications to the Board for consideration and appointment. The nomination

procedures shall be in conformity with the Bank’s regulations and criteria.

The appointment of executives from the level of heads of departments downward has been delegated

to the authority of the management in selecting and appointing individuals as considered appropriate.

For certain executive positions where definite terms of office are specified, the Nomination,

Remuneration and Corporate Governance Committee shall proceed with the nomination at least six months

before the end of such terms of office.

5.Remunerationfordirectorsandexecutives

The Bank has a policy on determining the remuneration for directors and executives on a transparent

and appropriate manner and to be attractive to capable individuals to join the Bank or stay on with the Bank. The

remuneration paid is considered based on the experience, proficiency and dedication of work, together with the

performance and contribution of such directors or executives to the Bank. The remuneration for directors and

114 A n n u a l R e p o r t 2 0 0 8

executives may be set to be on a par with that of other institutions in the same industry, and is subject to the

approval by the shareholders. Disclosure of the remuneration shall be made in the annual report pursuant to the

regulatory requirement. The criteria for remuneration are as follows:

1. For the members of the Board of Directors and the Board committees appointed by the Board

to monitor and supervise the Bank’s operations to be in line with the policies set forth, comprising the Board of

Executive Directors, the Audit Committee, the Risk Management Committee, and the Nomination, Remuneration

and Corporate Governance Committee, the remuneration has been determined as follows:

1.1 Board and Board committee members who are external persons will receive retaining

fee, committee fee and attendance fee.

1.2 Board and Board committee members who are Bank employees will receive

no remuneration.

2. Remuneration for executives will be based on the Bank’s operating results and the

individual performance.

6.Internalcontrolandauditsystem

The Bank has put emphasis on internal control at both the management and the operation levels to ensure

that interests of the customers and the Bank are appropriately taken care of. The Board has regularly monitored

the adequacy of the internal control and audit system by assigning the Audit Committee to examine and ensure

proper internal control and audit in line with the Bank’s policies and regulations, as well as relevant regulatory

requirements.

In addition, the Bank has the Audit Group in place to take charge of considering and evaluating the Bank’s

internal control and report the results of which to the Audit Committee on a regular basis.

7.Monitoringoftheuseofinsideinformation

Directors’andexecutives’tradingofsecuritiesissuedbytheBank

The Bank has drawn up practices for the transactions of the Bank’s securities by the directors and

executives in compliance with the regulatory requirements. In this respect, the directors, senior management from

executive vice president level upward and department head or the equivalent in Finance Group are duty-bound to

disclose and report to the SEC the Bank-issued securities holdings by them, their spouses and minor children, as

well as any changes thereof, such as sale, purchase, transfer or acceptance of transfer of those securities in the

report format and within the period of time specified by the SEC.

8.Businessethicsandcodeofconduct

The Bank is determined to run its business with integrity and ethics. Besides the corporate governance

policy, the Bank has instituted a written code of conduct with the latest revision made in 2007, thereby clear

classification and stipulation has been made for strict and consistent compliance by Bank staff of all levels.


The core issues addressed and covered by its code of conduct are integrity, information confidentiality, conflict of

interest, abuse of authority, misconduct, and so on.

The Bank has been adhered to business operations in a straightforward manner under the relevant laws,

rules, regulations and standards of the regulators and the Bank itself, in the best interests of the customers,

shareholders and other stakeholders.

9.Enhancementofdirectors’performance

The Bank has a policy to encourage its directors to participate in training courses in order to expand their

knowledge in the fields related to their responsibilities. The training courses for directors are provided by Thai

Institute of Directors (IOD), such as Directors Certification Program (DCP) and Directors Accreditation Program

(DAP), etc., aimed at bolstering their understanding in director’s roles and responsibilities in compliance with the

corporate governance practices.

Besides, the Bank has prepared the directors’ handbook for new directors. The contents of the handbook

cover such significant issues as the relevant rules and regulations issued by the regulators and the Bank.

The Company Secretary will prepare documents and information that contribute to the new directors’ performance

of duties and summarized description of the Bank’s nature of business and operational framework. It is regarded

as an orientation for the new directors. Certain significant documents are as below:

1. The Director’s handbook: It covers details on the Bank’s business operations and regulatory

requirements applicable to directors and others.

2. Handbook for director of a registered company: It features key information on the role, responsibility

and duty of a director and the Board of Directors, guidelines for a director’s performance of duty, protection of a

director’s rights, and arrangements of the shareholders’ meeting.

3. Other documents: These include memorandum and articles of association, annual report, corporate

governance policy, handbook for directors of financial institutions, and relevant regulatory letters and notifications,

featuring rules, criteria and practices prescribed by the relevant regulators, i.e. the SET, the SEC and the BoT.

This aims at enhancing directors’ awareness of their roles and responsibilities, and the Bank’s business

operations. Such handbooks are subject to regular updating and review to ensure information is current in market

practices.

10.Performanceself-assessmentoftheBoard

The Board resolved in December 2008 for the Board to conduct performance self-assessment on an

annual basis. This aims at allowing the Board members to review their roles and duties and the performance of

the Board as a whole as well as addressing any problems and obstacles arising under the good corporate

governance principles. The self-assessment is undertaken in two tiers below:

1. Assessment of the whole Board of Directors’ performance

2. Assessment of the performance of each Board committees, i.e. the Audit Committee, the Board of

116 A n n u a l R e p o r t 2 0 0 8

Executive Directors, the Credit Committee, the Nomination, Remuneration and Corporate Governance

Committee, and the Risk Management Committee.

The self-assessment of the above Board’s and committees’ performances will be made by all the Board

members and the members of the Board committees on an individual committee basis. The secretary of each

committee will also join in the assessment.

The self-assessment results will be reported to the Nomination, Remuneration and Corporate Governance

Committee for acknowledgment and then proposed for consideration of the Board of Directors accordingly.

Controlonuseofinsiderinformation

Policyandprocedureoninsiderinformation

TMB is aware of the importance of monitoring the use of inside information, especially non-public

information that may impact its share price. As such, the Bank has assigned Financial Statement Division under

Financial Reporting Department to be the only unit responsible for delivering financial statements and all financial

reports to the SET and the SEC after undergoing a correctness and completeness review by the Audit Committee

and the Board of Executive Directors respectively to make sure the Bank’s inside information is not prematurely

disclosed to the public.

Additionally, to ensure the control of inside information usage complies with good corporate governance

principles and the confidential information is efficiently kept, the Bank has revised the procedures for maintaining

the Chinese Walls and for employees’ securities trading, and set a silent period to prevent employees from

gaining from such information so that the said procedures will always be consistent with the most updated

regulatory rules.

PenaltyMeasures

The Bank’s punishment for the use of inside information accords with the provisions of the Securities and

Exchange Act B.E. 2535 and all other relevant rules and regulations of the authorities. It has also imposed

punishment for employees’ disciplinary misconduct regarding business code of conduct and ethics to ensure

the employees perform duties with transparency and based on professional code of conduct and treat all

stakeholders fairly.

InternalControl

OpinionoftheBoardofDirectors

The Bank has set its policy and direction with a strong focus on internal control at all levels from the

management down to the operations to ensure that customers as well as the Bank’s interests are protected.

To this end, the Bank has also set up Audit Committee, Risk Management Committee, Risk Management Group

and Compliance Group to oversee the Bank’s governance process, risk management and system of internal

control. In addition, Group Audit conducts regular review of the Bank’s operation and related-party transactions.


Group Audit reports the audit results to Audit Committee and the committee reports the results to the Board of Directors.

The Board of Directors, in its meeting no. 2/2552 on February 19, 2009 which was attended by members,

among them were all independent directors and members of Audit Committee, acknowledged the internal control

assessment report presented by Head of Group Audit. The assessment was conducted based on internal control

core components; including Control Environment, Risk Assessment, Control Activities, Information and

Communication, and Monitoring.

The Board of Directors was updated of the status of the internal control systems and they are monitoring

the efforts of management to improve the internal control environment of the Bank. In addition, the Audit

Committee had recommended that the management take expeditious actions to address deficiencies identified

and update the Committee and the Board of Directors progress report regularly. The Board of Directors has

emphasized the importance of developing the internal control systems to be effective and comprehensive. In this

regard, the Bank is taking actions to review and improve credit management processes, monitoring compliant to

the regulations and other controls as recommended by auditors and regulator.

Personnel Totalnumberofemployees

As of December 31, 2008, TMB had a total workforce of 9,051, broken down by group as follows:

Group

No.ofemployees

(persons)

Legal Group 92

Corporate Strategy Group 42

Finance Group 125

SME Business Marketing and Product Group 33

Compliance Group 22

Audit Group 124

Human Resource Group 106

Information Technology Group 205

Wealth Management Group 34

Transactional Banking Group 67

BKK Branch Banking Group 2,552

UPC Branch Banking Group 2,688

Secured Lending Business Group 22

Unsecured Lending Business Group 46

Corporate Governance Group 33

Corporate Services Group 529

Corporate Relationship Management Group 123

SME Business Relationship Management Group 8

Market Risk Management Group 12

118 A n n u a l R e p o r t 2 0 0 8

Group No.ofemployees

(persons)

Operations and Information Risk Management Group 12

Corporate Treasury Group 26

Alternative Channels Group 365

Treasury and Markets Group 36

NPA Management Group 64

Management Accounting Group 24

Operations and Services Group 709

Investment Banking Group 26

Risk Analytics and Research Group 58

Retail Marketing Group 19

Retail Business Development Group 82

Commercial Credit Group 285

Retail Credit Group 319

Branch Banking 1

Report directly to Chief Executive Officer 28

Report directly to Chief Risk Officer 70

Report directly to Chief Operating Officer 38

Report directly to Chief SME Banking Officer 2

Report directly to Chief Wholesale Banking Officer 8

Report directly to Chief Retail Banking Officer 16

Total 9,051

Note: If excluding 12 contract staff, the total number of employees was 9,039.

Staffturnoverduringthepastthreeyears

2006-2008, the total number of employees was as follows:

AsofDecember31 No.ofEmployee

2006 9,513

2007 8,713

2008 9,051

Note: Total number of employees included contract staff.


Keylabordisputesduringthepastthreeyears

Typeofcase No.ofcases StatusAsofDecember31,2008

1. Lawsuit brought by TMB against employees

1.1 Internal fraud 9

- Case not yet finalized 2 - All cases are under the First Instance Court’s

- Case finalized 7 proceedings.

1.2 Duty performed with negligence

- Case not yet finalized -

- Case finalized -

2. Lawsuit brought by employees against TMB

2.1 Retirement dispute 3

- Case not yet finalized 3 - All cases are under the Supreme Court’s

proceedings.

- Case finalized -

2.2 Unfair employment termination 4

- Case not yet finalized 3 - Two cases are under the Central Labor

Court’s proceedings and one under

the Supreme Court’s proceedings.

- Case finalized 1

2.3 Request for bonus payment 18

- Case finalized 18

2.4 Request for salary increase 6

- Case not yet finalized -

- Case finalized 6

2.5 Request for adjustment of 2006 1

performance evaluation

- Case not yet finalized 1 - Case is under the Central Labor Court’s

proceedings.

- Case finalized -

Staff’scompensation

TMB is well aware that employees are its valued assets and key contributors to its success. Therefore, the

Bank gives priority to boosting the employees’ morale and ensuring they receive compensation based on their

performance, skills and competence, as well as other welfares and benefits that are reasonable, fair and

comparable to other financial institutions’.

120 A n n u a l R e p o r t 2 0 0 8

• Totalcompensationandtypesofcompensationforemployees

The Bank semi-annually conducts employee performance evaluation for annual performance-based

salary increase. It also provides other financial allowances for the employees such as allowance for working

in the upcountry, which will be specially increased for office locations in areas such as island, hills, and the three

risky southernmost provinces, allowance for staff at branches that are opened seven days a week, etc.

In 2008, total compensation for the employees given in the forms of salary, cost of living allowance,

special gratuity, allowance for working in the upcountry, position allowance, overtime, and others accounted

for Baht 4,328.64 million.

• Otherallowances

The Bank gives other forms of allowances to employees on several occasions such as uniform

allowance, grants for staff’s wedding, childbirth, ordination, Islamic pilgrimage, and scholarship for staff’s children.

The Bank also grants gratuity to the employees in case they themselves or any of their family members have

passed away.

• Providentfund

The TMB Employee Provident Fund was registered in 1998 under the Provident Fund Act B.E. 2530

(1987). A contribution at 5%-10% of the staff’s salary is paid by the Bank into the Fund. The Bank’s staff may

choose to pay their own portion into the Fund at the rate of 2%-10% of their salary to ensure that they will have

funds available from the savings for use after retirement or resignation.

• Otherwelfaresandfringebenefits

• Medicalcare-The Bank provides medical care bill payment for the employees and their spouse

and children based on the set criteria. The medical care includes dental treatment, annual health checkup,

in-house medical clinic at the head office with specialized physicians to give medical treatment and health

consultancy, etc.

• Grouplifeinsurance,personalaccidentinsurance,andhealth&accidentinsurancewhileon

overseasbusinesstrips-These insurance programs are aimed at strengthening the employees’ security while

working with the Bank. The insurance has been taken out in several types with around-the-clock coverage.

• Welfare loans- These are provided for the employees as deemed necessary, available in

different forms such as interest-free loans comprising educational loans for staff’s children and emergency loans

for staff hit by natural disasters or fire; and loans bearing welfare interest rates comprising housing loans,

residence repair/modification loans, car/motorcycle loans, and multi-purpose loans.

• Employeeclubsandactivities- The Bank promotes activities among the employees dependent upon

their individual interest. Several clubs were set up for the employees to join, namely Buddhism Club, Photo Club,


Eco-Tourism Club, Bowling Club, Dancing Club, and Health Club. In addition, spaces at the Head Office are

made available for indoor sports and workout. An employee club is also provided at Lat Lumkaew of Pathum

Thani province to serve as a recreational venue as well as provide lodgings for upcountry branch staff attending a

seminar or training in Bangkok.

• Canteenandcooperativestore- “The Bank” provides a canteen at its Head Office and a

cooperative mini-mart where cheap merchandise is available.

• Libraryandlearningcenter- To encourage staff to study, research and enrich their knowledge,

the Bank has provided a library and a learning center where books, textbooks, publications and VCDs are

available.

• Souvenirsforstaffwithlongserviceyearsorretiredstaff-As a token for staff members who

have worked long stretches with the Bank, the Bank will give a souvenir to employees who have reached service

periods of 20 years, 25 years, 30 years, 35 years and 40 years and to staff about to retire.

Humanresourcedevelopment

• Policyonhumanresourcedevelopment

TMB has placed an emphasis on employees’ knowledge, potential and behavioral development so that

they could perform their work in line with the job description and in response to the Bank’s vision, mission and

goals. The Bank organized training programs in the form of classroom training, both in-house and off-premises,

and encouraged self learning through E-learning, as well as developed skills at executive levels by granting

educational and training scholarships.

• Trainingoverview

In 2008, TMB organized a total of 90 training courses for 355 classes with total attendants of 7,897

persons and average training period of 30 hours/person. Moreover, it dispatched 549 employees to attend

off-premises training programs, of whom 19 persons attended overseas training. As for self-learning program,

there were 12,000 participants. Total number of E-learning participants was 2,572 persons. Educational and

training scholarships were granted to 22 executives. Total expenses on all types of training and scholarships were

around Baht 38 million.

• Trainingresults

From post-training evaluation, participants rated their knowledge enrichment at 81.32% on average and

supervisors rated their satisfaction of staff’s performance at 82.25%.

122 A n n u a l R e p o r t 2 0 0 8

• Majortrainingcourses

1. Businessdevelopment: After the entrance of ING as TMB’s strategic partner, we have conducted

training courses on “Product Knowledge: ING Bancassurance and ING Funds” and “Selling Skills” for all

branches. In addition, we have arranged a Mini MBA course for all branch managers and training courses for

specific positions, e.g. Pre-Branch Manager, Customer Service Supervisor, Account Advisor, etc. We have also

emphasized on regulatory compliance by filling the contents on rules and regulations into most of the courses

arranged for the branches.

For Head Office staff, the Bank focused on credit officer training in order to standardize the work

process and procedure through courses such as “Review of Operational Manuals and Credit Request Form,”

explanation on credit underwriting and procedure, credit analysis, debt management and collection, etc.

Moreover, we have arranged SME Product Knowledge courses, e.g. SME Select, SME Smart Biz & SME Plus, etc.

2. Trainingforregulatorycompliance: For the branch staff, we provided training courses on selling

agent for ING Fund, bancassurance product selling, working procedures for staff dealing with investors and

enhancement of their knowledge, Financial Institution Business Act, Anti Money-Laundering Act, and Deposit

Protection Agency Act of 2008. Moreover, we arranged training courses for Head Office staff on new laws such

as the amended Securities and Exchange Act, Deposit Protection Agency Act, the new labor protection law,

credit-related law, laws relevant to banking business and legal documentation.

3. Process&application training: To ensure the Bank has a business process of international

standard, we have accelerated the installation of essential applications and new operation systems such as

Moody’s MRA system, KMV Risk Analyst, DSS system, Credit Scoring Models, asset appraisal system, PV loss

calculation, credit risk rating (CRR), and branch operation manuals based on PSAP-NPA.

Additionally, we have given importance to new employees and are aware of the need to educate

them on the Bank’s business process and products & services while instilling a positive attitude toward their work

and customer service. Thus, all new employees at both the Head Office and Branch Banking Group are to attend

an “orientation” program, whereas all Branch Banking staff are trained in a “Customer Service Officer” course

4. Competencies&coreskill: In 2008, the competencies and core skill courses were arranged for

the staff such as Report Writing, Effective E-Mail Writing, PowerPoint for Presentation, Communication

Techniques, Service Mind, Teamwork, English Language Study, Presentation & Negotiation Techniques, etc.

5. Managementskill:This was aimed at enabling executive officers at all levels to strengthen their

personnel and business management skills and keep well abreast of the changing business environment, as well

as become a leader who could drive their team members to perform their tasks at optimum levels.

The courses included Excellent Professional People Manager and Leadership Development programs arranged

for top and middle management and Mini MBA courses held for branch managers under BKK and Upcountry

Branch Banking Groups.


6. FXskills: As TMB ranks among the top in market share of Thai commercial banks’ foreign

exchange fee income, there is operational risk in FX operations arising from fast-developing an exotic forms of

frauds, the Bank has accordingly arranged training to mitigate the said risk once to twice a year for its staff

members across the country.

• Off-sitetrainingprograms

Besides the in-house training, the Bank also sends its executives and staff to attend training/seminar

courses organized by reputable institutions, both local and overseas, so as to develop and enable the staff to gain

diverse knowledge and new technologies which could be efficiently applied to their works. These courses

included- Monetary Policy in a Volatile World: Challenges and Strategies Going Forward conducted by the Bank

of Thailand; Low Cost Marketing Technique conducted by Thailand Management Association; Sales Force

Performers 2008; Certificate in Strategic HR Transformation and Organization Development, etc.

• Executivedevelopment

• ManagementAssociateProgram: This program was intended for young executives

in preparation for future business expansion. It was arranged in the form of on the job training in core business

functions and other training courses to develop their leadership skills, innovative thinking, problem solving, etc.

These executive staff will grow and become key persons of the Bank in the future.

• Educationalandtrainingscholarships: TMB provided scholarships for local master’s degree

programs for the executives and staff members in relevant fields and also training scholarships for executive

development at all levels such as MOBEX, YOBEX, FINEX, etc. In addition, executive officers were dispatched to

attend the joint public and private national defense course, the public economic management for top executives

program, etc.

• Promotionofself-learningprogram

Aside from classroom training, the Bank in 2008 arranged several programs and activities to encourage

self-learning by employees through E-learning as an alternative learning channel for the employees, particularly

those at branch offices across the country, as follows:

• LearningthroughtheIntranet: Learning method has been developed to encourage staff’s

continuous self-development. Useful knowledge has been made available in the form of courseware on topics

designed according to the BOT policy such as ROSCs Monitoring System: RMS and courses under TMB risk

management policy such as Moody Credit Skills and Process Development, etc.

• E-LearningCenter: This serves as a center of compiled knowledge in various fields and

available in different forms such as VCD, DVD, and CD-Rom for interested employees to learn by themselves.

The fields of knowledge provided are laws, finance, banking, accounting, marketing, foreign languages,

healthcare, documentary, hobbies, etc.

124 A n n u a l R e p o r t 2 0 0 8

Measuresforemployeesecurity

The Bank has attached importance to its staff’s welfare and security by strictly complying with security

measures as required by law as well as setting out additional measures as follows:

• Legalmeasures

1. The Bank has established the Security, Profession Health and Workplace Committee to monitor

the action/working condition to ensure it is safe from hazard, illness or disturbance.

2. The Bank has regularly conducted a fire drill at the Head Office at least once a year.

3. Training is arranged on fire prevention and firefighting with basic fire extinguishing tools for

employees representing their departments.

• TheBank’ssecuritymeasures

1. The Bank has installed security systems within and around its buildings such as digital CCTV,

Burglar Alarm, a fire prevention system inside the buildings, a computer back-up center, Access Control System,

and BAS.

2. A number of staff is assigned to handle the building control and security system for the Bank’s

staffs and assets around the clock.

3. The Bank has arranged training and rehearsal on employee evacuation from the buildings in

emergency event and was awarded a certificate for Standard Fire Safety Building 2006 from the Bangkok

Metropolitan Administration.

4. The Bank has implemented a measure to make a bomb-detecting check on all incoming

vehicles 24 hours.

5. The Bank has made available communication device and bomb detectors to facilitate

security function.

6. The Bank has coordinated with the public agencies, state enterprises, and private companies,

namely military forces, Royal Thai Police Office, Metropolitan Electricity Authority, TOT, Metropolitan Waterworks

Authority, and Chatuchak District Office to seek assistance in case of any critical incident.

7. Training has been regularly arranged for staff concerned with building management and security

on a semi-annual basis.


Dividendpayment

TheBank’spolicy

The Bank set out a policy on dividend payment from financial statements (the Bank only) to ensure that

the shareholders would obtain a reasonable rate of return, depending however on the Bank’s operational

performance and relevant legal conditions as well as the capital adequacy and reserve requirements.

In addition, the dividend payment must be in line with the BoT’s Notification Re: Classification and

Provision of the Financial Institutions dated August 3,2008 which stated that as long as financial institutions have

not yet written off the impaired assets or has not yet made full provision for the assets and contingent liabilities

whether they are impaired or not, financial institutions are not allowed to pay dividend nor any other forms of

returns to its shareholders; and the BoT’s Notification Re: Regulation for Accounting Treatment of the Financial

Institutions dated August 3,2008, Section 8: Dividend Policy, requiring that financial institutions should not make

dividend payments out of the unrealized profit or profit that is not based on actual cash flow such as profit from

mark to market securities value, or out of any profit derived from the reclassifying of financial assets or financial

institutions should not make dividend payments out of the profit from sale of assets, which is not actually

completed and which may result in abnormal profit or loss such as profit from sale of properties foreclosed where

a repurchase option is part of the agreement.

Currently, no dividend is paid due to the fact that the Bank still has accumulated loss and discount on

shares. According to the Public Limited Companies Act and other relevant regulations, dividend shall be paid if

the Bank is able to clean up the accumulated loss and discount on shares.

Policyofsubsidiarycompanies

Subsidiary companies’ dividend payment is subject to the approval of their boards of directors and is to be

proposed to their meetings of shareholders for consent. The Bank has not set out the payment rate.

Their dividend payment will depend on their operational performance and business plans and must be in

compliance with each company’s regulations and relevant laws governing the company’s dividend payment.

126 A n n u a l R e p o r t 2 0 0 8

Related Transactions

Details of related transactions are in note of financial statement no. 5.23 of this annual report.

Opinion of Audit Committee regarding related party transactions

The Bank’s Audit Committee has reviewed related-party transactions that occurred during the 2008 and

opinioned that the related-party transactions were conducted only when necessary and at fair market value.

In addition, the Board of Directors does not have opinions different from that of Audit Committee.

Measures or procedures to approve the making of related transactions

The Bank has given importance to the prevention of conflicts of interest and also to related party

transactions and connected transactions according to the regulatory requirements. To that effect, the Bank

requires that its directors and senior management at executive vice president level and higher disclose their

relations or connections in any business with a conflict of interest on a quarterly basis. Moreover, a manual on

the related party transactions and connected transactions has been prepared in order to eradicate conflicts of

interest. Transactions with related parties or connected persons are carried out by the Bank on a fair and

equitable basis. Therefore, the Bank has set out a policy on pricing and conditions based on the same criteria for

the transactions made with clients in general. In addition, the Bank’s directors and executives having conflicts of

interest in such transactions are not allowed to participate in the approval thereof, nor to vote in a meeting.

Loans provided to or investments in an entity in which the Bank, its directors or senior management have

conflicts of interest are subject to the consideration of the project’s status, operational performance or feasibility

analysis with conditions and price to be the same as those approved for other clients in general. The loan or

investment amount must be controlled so that it will not exceed a suitable limit and is subject to TMB Board of

Directors’ unanimous approval. The concerned directors or executives shall not participate in the approval of such

transaction and the approval must be consistent with the regulations of related authorities.

The Bank has assigned the Audit Committee to consider, review, and audit connected transactions in

order to prevent and mitigate the conflicts of interest.

Information will be disclosed by the Bank concerning its transactions with related parties and connected

persons, including related transactions on a complete and transparent basis according to the criteria of the

Bank of Thailand, the Securities and Exchange Commission Office, the Stock Exchange of Thailand, and the

accounting standards.


Policies or trends of making the prospective related transactions

Related party transactions (except welfare loans for the Bank’s employees) in 2008 mostly were normal

business transactions with general commercial terms or were lease of office buildings to its affiliated companies

under a lease contract term of not over three years. However, the transaction value was insignificant compared

with the Bank’s total assets and the transaction details had been reported to the Audit Committee.

In conducting any future related party transactions, the Bank will comply with the above policy and

guideline. If there is any amendment to the regulatory requirements, the Bank will relatively update its policy and

guideline in line with the said amendment.

Persons who may have conflicts of interest to hold more than a 5% of stake in subsidiary company or associated company instead of direct shareholding by the Bank.

The Bank has no policy to allow a person who may have a conflict of interest to hold shares on its behalf,

unless such shareholding is essential for the Bank to comply with the law.

128 A n n u a l R e p o r t 2 0 0 8

Analysis of the Financial Position and Operational

Performance of the Bank

Executive summary

Improvingearningscapability

For the year ending 2008, the Bank and its subsidiaries’ net profit amounted to THB424 million, a significant

improvement from net losses of THB43,677 million in 2007. The Bank’s core business continues to grow with

consolidated pre-provision profit (PPOP) in 2008 rising to THB8,438 million from THB8,149 million in 2007.

The marked improvement in net profit was driven mainly by significantly fewer loan loss provisions, increase in

non-interest income and drop in non-interest expenses.

PrudentNPLclassificationandprovisioning

The Bank has adopted more stringent NPLs classification and provisioning in compliance with the

international standards. This includes: 1) NPL classification from “by accounts” to “by customers”; 2) more

conservative recognition of collateral value; and 3) more stringent qualitative loan downgrade. Nevertheless, NPLs

as at the end of 2008 still declined by THB6,735 million or 8.8% yoy to THB69,777 million. The decline was the

results of bank’s efforts in debt restructuring, bad debt resolution, NPL sales and write-off.

Proactivetransformationexpensestoprimeforastrongerplatform

Other key initiatives during 2008 were: 1) THB850 million provisions for the HR realignment to be executed

in 2009; and 2) realignment of Bank’s investment portfolio by cutting exposures in equity investment and in the

same time taking impairment losses related to equity investments (THB523 million) and derivatives exposures

(THB428 million). These initiatives were aimed to prime for a stronger banking platform, i.e. a more efficient HR

platform and reduction in overall risk profile of Bank’s investment portfolio.

Loanbookcontractedbutbetterquality

As at 2008, Banks’ total loans were THB424,286 million, an 8.7% decrease from 2007. The decline was

due mainly to the NPL sales as well as scheduled loan repayment. Despite Bank’s tightened underwriting

standards, the loan contraction in the fourth quarter of 2008 had slowed down, attributed to the new high-quality

credit underwriting, in particular the trade finance, which showed more than 50% yoy growth.

Improvingdepositprofile

While Bank’s total deposits in 2008 dropped to THB450,297 million (3.3% yoy), total deposits in the fourth

quarter of 2008 increased by THB16,798 million (4% qoq) with better mix of CASA (current and savings deposits)

at 38.7% from 37.2% in the previous quarter. This was attributable to the Bank’s “Deposit-Led Strategy”

implemented in 4Q08 and the focus to achieve the higher mix of CASA.


Improvingliquidity,marginandcosttoincome

With Bank’s decision to cut down exposures to equity investment, Bank’s liquidity has improved with 14%

of earning assets allocated to cash and interbank while loan to deposit (including short-term borrowing) dropped

to 87% as at 2008. Net interest margin in 2008 expanded by 15 basis points to 2.7% due to the active asset and

liability management, while the cost to income improved markedly to 75% (and 62% excluding extra items)

in 2008, as a result of Bank’s cleaner balance sheet.

CARof13.9%ofwhichTier1was10.1%

As at 2008, Bank’s consolidated shareholders’ equity was THB45,046 million, an increase of 1.2% or

THB526 million from 2007. The capital adequacy ratio (CAR) of the Bank under Basel II calculation was 13.9%,

of which 10.1% was Tier 1 capital, comfortably above the Bank of Thailand’s minimum requirement of 8.5% and

4.25% of CAR and Tier 1 capital, respectively.

Analysis of operational performance

Analysis of operational performance for the accounting year ended December 31, 2008 compared with

those of the accounting year ended December 31, 2007:

The following table sets forth the principal components of the Bank’s net income (loss) for the periods

indicated:

For the year ended December 31

2008 2007

(Unit: Bt. million)

Interest and dividend income 29,152 33,724

Interest expense 13,359 17,282

Net interest and dividend income 15,793 16,442

Bad debts and doubtful accounts 5,177 31,732

Loss on debt restructuring (reversal) (101) (750)

Net interest and dividend income after bad debts and doubtful

accounts and loss on debt restructuring (reversal) 10,716 (14,541)

Non-interest income 7,014 6,591

Non-interest expense 17,114 35,459

Profit (loss) before income tax 616 (43,409)

Income tax expense 87 132

Net profit (loss) of minority interests 106 136

Net profit (loss) 424 (43,677)

130 A n n u a l R e p o r t 2 0 0 8

• Interestanddividendincome

The principal components of the Bank’s net interest and dividend income are reflected in the following table:


2008 2007

(Unit: Bt. million, except where expressed in %)


Interest on loans 24,150 29,180

Interest on interbank and money market items 1,581 756

Investment income 3,421 3,788

Total interest and dividend income 29,152 33,724

Interest expense

Interest on deposits 10,197 14,078

Interest on interbank and money market items 127 557

Interest on short-term borrowings 1,166 1,282

Interest on long-term borrowings 1,870 1,365

Total interest expense 13,359 17,282

Net interest and dividend income 15,792 16,442


2008 2007

(Unit: Bt. million, except where expressed in %)

Average total assets 612,073 687,019

Average earning assets 585,630 644,545

Average interest-bearing liabilities 536,353 615,193

Net interest margin on total assets (%) 2.6 2.4

Net interest margin on earning assets (%) 2.7 2.6

Net interest rate spread (%) 2.5 2.4

Total interest and dividend income decreased by 13.6% from Baht 33,724 million in 2007 to Baht 29,152

million in 2008, primarily due to a decrease in interest on loans.

Interest on loans decreased by 17.2% from Baht 29,180 million in 2007 to Baht 24,150 million in 2008. This

decrease resulted mainly from loan contraction and lower interest rates received on loans.

Interest on interbank and money market items increased by 109.1% from Baht 756 million in 2007 to Baht

1,581 million in 2008 due to an increase in the Bank’s weighting on investment in high-liquid assets.

Investment income fell by 9.7% from Baht 3,788 million in 2007 to Baht 3,421 million in 2008, caused

mainly by reduction in investment in debt and equity securities.


• Interestexpense

Total interest expense was down by 22.7% from Baht 17,282 million in 2007 to Baht 13,359 million

in 2008, ascribed primarily to a decrease in interest expense on deposits.

Interest on deposits declined by 27.6% from Baht 14,078 million in 2007 to Baht 10,197 million in 2008.

Such decrease was primarily a result of declince in deposit outstanding and deposit rates.

Interest on interbank and money market items fell by 77.3% from Baht 557 million in 2007 to Baht 127

million in 2008, resulting principally from reduction in interbank borrowing, which was a result of the Bank’s active

assets & liabilities management, and reduction in interest rates.

Interest on short-term borrowings decreased by 9.1% from Baht 1,282 million in 2007 to Baht 1,166

million in 2008 owing to reduction in average short-term borrowing.

Interest on long-term borrowings increased by 37.0% from Baht 1,365 million in 2007 to Baht 1,870

million in 2008. This was attributable to an increase in interest rates of the long-term borrowing.

• Netinterestanddividendincome

Due to the above, the net interest and dividend income decreased by 3.9% from Baht 16,442 million in

2007 to Baht 15,792 million in 2008.

• Baddebtsanddoubtfulaccounts

Allowance for bad debts and doubtful accounts decreased significantly from Baht 31,732 million in 2007

to Baht 5,177 million in 2008. In 2007, the Bank and its subsidiaries set provisions for bad debts and doubtful

accounts in line with the Bank of Thailand’s provision requirement in preparation for the International Accounting

Standard No.39 (IAS39) implementation. In 2008, the Bank set provisions for bad debts and doubtful accounts

according to its asset quality, NPL sale and write-off. Moreover, the Bank raised its provisioning standard to meet

the international standard, which mainly included classification of NPL by customers, conservative treatment of

collateral value as well as more stringent qualitative classification.

• Lossondebtrestructuring(reversal)

The Bank and its subsidiaries had reversal of loss on debt restructuring amounted to Baht 750 million in

2007, compared with Baht 101 million in 2008.

• Non-interestincome

The following table summarizes the principal components of the Bank’s non-interest income for

the periods indicated:

132 A n n u a l R e p o r t 2 0 0 8


2008 2007

(Unit: Bt. million)

Non-interest income

Gain/loss on investments (353) (831)

Share of profit (loss) from investments accounted for using the equity method 465 282


Acceptances, avals and guarantees 524 649

Other fee and service income 4,487 4,771

Gain on exchange rate 951 1,095

Gain on sale of assets 626 -

Other income(1) 313 626

Total non-interest income 7,014 6,591

(1) Other income includes unclaimed customer balances, miscellaneous income and income from subsidiaries.

Non-interest income rose 6.4% from Baht 6,591 million in 2007 to Baht 7,014 million in 2008 thanks to

less investment loss, increase in share of profit from associated companies and gain on sale of assets.

Loss on investments lowered from Baht 831 million in 2007 to Baht 353 million in 2008.

Fees and service income was down by 5.9% from Baht 4,771 million in 2007 to Baht 4,487 million

in 2008, mainly as a result of reduction in credit-related fee income which mainly stemmed from loan contraction.

Gain on exchange rate decreased by 13.1 % from Baht 1,095 million in 2007 to Baht 951 million in 2008

due mainly to the market situation.

Other income dropped 49.9% from Baht 626 million in 2007 to Baht 313 million in 2008, mainly due to

loss from a derivation settlement transaction.


• Non-interestexpense

The following table shows information with respect to the Bank’s non-interest expense for the periods indicated:


2008 2007

(Unit: Bt. million)

Non-interest expense

Personnel expenses 6,041 4,814

Premises and equipment expenses 2,585 2,565

Taxes and duties 884 1,345

Fees and service expenses 1,249 1,250

Directors’ remuneration 31 39

Loss on impairment of properties foreclosed and other assets 1,124 3,982

Contributions to the FIDF 1,863 2,157

Loss on provisions of obligations from transferred non-performing assets (49) 3,978

Loss on provisions of obligations - others 1,150 225

Loss on impairment of goodwill - 12,237

Loss on sales of assets - 242

Other expense(1) 2,236 2,625

Total non-interest expense 17,114 35,459

(1) Other expense includes expenses relating to off-balance sheet items and zero coupon bond acquired from BAMC for the sale

of NPAs.

Non-interest expense decreased by 51.7% from Baht 35,459 million in 2007 to Baht 17,114 million in 2008,

principally due to an absence of loss on impairment of goodwill and declines in provisions of obligation and loss

on impairment of properties foreclosed.

Loss on provisions of obligation from transferred non-performing assets was lower from Baht 3,978 million

in 2007 to a reversal of Baht 49 million in 2008. In 2007, the Bank had provisions of obligations for possible loss

sharing from TAMC of Baht 774 million and provisions of obligations for possible loss sharing from BAMC of Baht

3,204 million.

Loss on provisions of obligation (others) increased from Baht 225 million in 2007 to Baht 1,150 million

in 2008. This was because the Bank began to set aside collective provisions for off-balance sheet items in 2008.

In 2007, the Bank charged an impairment loss on the full amount of the goodwill arising from the merger

with the Industrial Finance Corporation of Thailand (IFCT) and DBS Thai Danu Bank Plc.(DTDB) of Baht 12,237

million. From 2008 onward, no carrying amount of goodwill from such merger is included in the financial

statement.

134 A n n u a l R e p o r t 2 0 0 8

• Profit(Loss)beforeincometax

The Bank and its subsidiaries recored loss before income tax amounted to Baht 43,409 million in 2007,

while profit before income tax was recorded at Baht 616 million for the Bank and its subsidiaries in 2008. Income

tax decreased by 34.1% from Baht 132 million in 2007 to Baht 87 million in 2008.

• Netprofit(loss)

Due to the above, a net loss of Baht 43,677 million was recoreded in 2007 while net profit of Baht 424

million in was recorded in 2008.

Analysis of financial position

• Assets

Total assets decreased by 3.2% from Baht 622,161 million in 2007 to Baht 601,985 million in 2008.

Total loans (excluding accrued interest receivable) decreased by 8.7% from Baht 464,895 million in 2007

to Baht 424,286 million in 2008, due mainly to the Bank’s loan portfolio realignment, loan repayment and sale of

non-performing loans.

Net investments reduced by 12.8% from Baht 96,346 million in 2007 to Baht 83,983 million in 2008 as

a result of sale of investment in debt and equity securities.

Net properties foreclosed decreased by 14.6% from Baht 22,556 million in 2007 to Baht 19,260 million

in 2008 from the sale during the year.

• Liabilities

Total liabilities decreased by 3.6% from Baht 577,641 million at the end of 2007 to Baht 556,939 million

at the end of 2008.

Deposits declinded by 3.3 % from Baht 465,462 million at the end of 2007 to Baht 450,297 million at the

end of 2008. The decrease was mainly from the decrease in savings deposit as some of the desposit moved to

other types of the Bank’s products or term-deposit.

Borrowings increased by 24.2% from Baht 53,416 million at the end of 2007 to Baht 66,317 million at the

end of 2008 due to increase in Bill of Exchange (BE) and short-term bond.

Interbank and money market items decreased by 62.8% from Baht 24,993 million in 2007 to Baht 9,299

million in 2008, ascribed to the Bank’s liquidity management.


• Shareholders’equity

Shareholders’ equity rose by 1.2% from Baht 44,520 million in 2007 to Baht 45,046 million in 2008.

This was attributed largely to an increase in surplus on revaluation of fixed assets amounted to Baht 2,039 and

the net profit of the year amounted to Baht 424 million. However, the increase was partly offset by a decrease in

unrealized gain on revaluation of investment of Baht 1,454 million.

Fully diluted book value per share increased slightly from Baht 1.02 as of December 31, 2007 to Baht

1.03 as of December 31, 2008.

Off-balance sheet items

• Contingencies

The Bank’s contingencies comprise aval to bills and guarantees of loans, liabilities under un-matured

import bills, letters of credit, other contingencies, and forward bonds. Other contingencies consist of other

guarantees, exchange contracts, interest rate contracts, and undrawn balances of borrowers. The Bank’s

contingencies increased by 12.1% from Baht 349,998 million as of December 31, 2007 to Baht 392,463 million as

of December 31, 2008, primarily as a result of increased interest rate swaps as part of the Bank’s management of

its liabilities and risk management service.

Asset quality

Loans

• Loanconcentrations

Loan portfolio by industry

TMB follows a strategy of building a diversified asset portfolio and limiting its exposure to particular

sectors or borrowers. As of December 31, 2008, TMB’s largest exposure was to the production industry at 24.2%

of total loans. Financial intermediary became the second largest portflio in 2008 with the contribution of 18.4%.

Other sectors that constituted significant portions include the personal consumption (15.6% of total loans) and

wholesale and retail sector (15.1% of total loans), while the remaining sectors contributed 45.1% to total loans.

The following table sets forth in further detail TMB’s industry-wide exposure as at the dates indicated:

136 A n n u a l R e p o r t 2 0 0 8


(Bank only) 2008 2007 2006

Amount % of total Amount % of total Amount % of total

Industry (Bt. million except in %)

Production 118,229 24.2 134,608 28.2 165,327 30.1

Financial intermediary 89,866 18.4 40,996 8.6 41,323 7.5

Financial consumption 75,912 15.6 77,868 16.3 79,828 14.6

Wholesale and retail 73,692 15.1 74,416 15.6 92,265 16.8

Real estate activities 26,380 5.4 28,226 5.9 25,457 4.6

Electricity 25,962 5.3 23,936 5.0 23,325 4.3

Hotels and restaurants 23,400 4.8 30,067 6.3 35,280 6.4

Transport and storage 19,914 4.1 22,391 4.7 33,330 6.1

Construction 11,949 2.5 16,313 3.4 19,481 3.6

Agriculture 9,802 2.0 11,055 2.3 11,638 1.2

Provision of services 4,320 0.9 5,849 1.2 7,442 1.4

Health and social work 2,900 0.6 5,189 1.1 5,996 1.1

Mining and quarrying 2,247 0.5 2,487 0.5 3,300 0.6

Fishery 1,142 0.2 1,444 0.3 1,870 0.3

Education 1,069 0.2 1,551 0.3 1,747 0.3

Community service 929 0.2 942 0.2 915 0.2

Private households - 0.0 - 0.0 - 0.0

Extra - territorial - 0.0 - 0.0 - 0.0

Total(1) 487,713 100.0 477,339 100.0 548,524 100.0

(1) Including interbank loans and money market items.

Loan portfolio by maturity

The following table sets forth TMB’s loans by remaining maturity as at the dates indicated:


(Bank only) 2008 2007 2006

(Bt. million)

At call 50,673 59,795 61,885

Due on or within 1 month 51,664 40,911 42,411

Due after 1 month but on or within 3 months 47,889 51,999 74,474

Due after 3 months but on or within 12 months 25,493 22,518 30,262

Due after one year but on or within 5 years 82,113 95,033 101,014

Due after 5 years but on or within 10 years 97,104 128,498 160,386

Due after 10 years 69,269 67,321 72,326

Total 424,205 466,075 542,758


Loan portfolio by type of interest

The following table sets forth the loans with predetermined fixed interest rates and floating interest rates as

at the dates indicated:


(Bank only) 2008 2007 2006

(Bt. million)

Floating rate 373,372 417,324 448,523

Fixed rate 50,833 48,751 94,235

Total loans 424,205 466,075 542,758

Loan portfolio by customer segment

The following table sets forth TMB’s loans by customer segment as at the dates indicated:


(Bank only) 2008** 2007*

Amount % of total Amount % of total

(Bt. million except in %)

Corporate (1) 191,163 45.1 171,425 36.8

SME (2) 165,459 39.0 216,871 46.5

Consumer (3) 67,583 15.9 77,780 16.7

Total (4) 424,205 100.0 466,075 100.0

*From December 2008 onward, the Bank applies new definition to classify its customer segment

(1) Corporate loans are loans to customers that have total annual revenue of over Baht 500 million.

(2) SME loans are loans to customers that have total annual revenure of less than Baht 500 million including owner operator

(3) Consumer loans are loans to individual person.

Before 2008, the Bank defined customer segment as follows;

(1) Corporate loans are loans to customers that either (i) have credit limits of more than Baht 300 million for each borrower or (ii)

have total annual revenue of over Baht 1,000 million or (iii) are listed on the SET.

(2) SME loans represent loans to customers that either (i) have credit limits of less than Baht 300 million for each borrower or (ii)

have total annual revenue of less than Baht 1,000 million or (iii) are not listed on the SET.

(3) Consumer loans represent personal consumption loans that fall within certain BOT loan definitions.

(4) Total loans include interbank loans and money market items.

• Classificationofassets

TMB classifies its loans and other assets in compliance with BOT guidelines. TMB and its subsidiaries

have classified their loan portfolios into six categories, primarily based on the non-accrual basis. For loans

classified as pass and special mention, the calculation of allowances for doubtful accounts is based on the

regulatory minimum percentage requirement, taking into consideration the collateral value, where the collateral

type and date of the latest appraisal are qualifying factors. For loans classified as sub-standard, doubtful and

doubtful of loss, the allowance on these accounts is set at 100% of the difference between the outstanding book

value of the debt and the present value of future cash flows expected to be received or the expected proceeds

from the disposal of collateral in accordance with BOT criteria.

138 A n n u a l R e p o r t 2 0 0 8

The table below sets forth the classification of loans for the periods indicated:


(Bank only) 2008 2007 2006

Loans and Loans and Loans and

accrued accrued accrued

interest interest interest

receivable(1) Provision receivable(1) Provision receivable(1) Provision

(Bt. million)

Pass 306,980 1,172 364,042 1,390 462,207 2,422

Special Mention 53,729 378 32,176 213 27,736 200

Substandard 9,229 4,001 13,463 7,011 8,423 1,557

Doubtful 7,505 2,490 16,755 8,165 12,250 3,482

Doubtful Loss 50,141 28,070 43,732 21,262 37,279 18,269

Total 427,584 36,111 470,168 38,041 547,895 25,930

Add: Excess over BOT

minimum requirement - 7,821 - 11,889 - 2,586

Total 427,584 43,932 470,168 49,930 547,895 28,516

(1) Excluding loans to banks and money market items.

Assets classified as substandard, doubtful or doubtful loss are considered NPAs. NPAs include loans and

receivables, securities and other assets held by TMB that meet these classifications. NPLs are a subset of NPAs.

• NPLs

As of December 31, 2008, the Bank and its subsidiaries’s NPLs classified as substandard, doubtful,

and doubtful loss amounted to Baht 69,777 mllion, a decline of Baht 6,7 35 million from December 31, 2007,

as a result of success of debt restructuring, bad debt resolution and non-performing loans sale & write-off.

As of December 31 2008, the Bank’s NPLs (excluding subsidiaries and associated companies) was Baht

66,082 million, a decline of Baht 6,333 million from December 31, 2007.

Percentage of NPLs for the Bank and its subsidiaries as of December 31, 2008 was 14.3%, decreased

from 16.1% at the end of 2007. Percentage of NPLs for the Bank (only) was 13.6%, decreased from 15.2% at the

end of 2007.

• Debtrestructuring

As of December 31, 2008, the Bank and its subsidiaries executed troubled debt restructuring agreements

as follows:


Debt restructuring

method

No. of accounts Transferred assets Loss ondebt

restructuring

No.

Pre-

restructure

No. Post-

restructure

Type

Fair

value

Modification of terms 99 4,898 42 3,711 - - 608

Various restructuring 14 1,349 3 39Land

and

building

879 30

Total 113 6,247 45 3,750 879 638

• Allowancefordoubtfulaccounts The table below shows the Bank’s allowance for doubtful accounts for the periods indicated: For the year ended December 31 (Bank only) 2008 2007 2006 (Bt. million) Allowance for doubtful accounts and debt restructuring at beginning of year 49,930 28,516 31,541 Provisions set aside during the year 5,285 31,715 13,120 Bad debts recovered 166 697 160 Bad debt write-off (4,563) (2,947) (7,833) Allowance for debts sold (6,887) (8,051) (8,451) Others 1 - (21) Ending balance 43,932 49,930 28,516 • TheThaiAssetManagementCorporation(TAMC) In accordance with the conditions of the Emergency Decree on the Thai Asset Management Corporation B.E. 2544, the Bank and its subsidiaries entered into an Asset Transfer Agreement with TAMC in 2001 for sales of sub-standard quality assets to TAMC and the Bank and its subsidiaries had received promissory notes from TAMC for the transfers (see Note to financial statements no. 5.3). TAMC and the transferors are to share the profits or losses from TAMC’s managing of the non-performing assets, in accordance with the conditions specified in the agreements, at the end of the fifth year and at the end of the tenth year, commencing July 1, 2001. In the case of losses, the transferors will be responsible for the first portion of losses, not exceeding 20% of the transfer price. The second portion of losses, not exceeding 20% of the transfer price, will be equally shared between TAMC and the transferors. The remaining losses will be absorbed by TAMC.

(Unit: Bt. million)

140 A n n u a l R e p o r t 2 0 0 8

In case of profits, the first portion of profits, not exceeding 20% of the transfer price, will be equally shared between TAMC and the transferors. Should there be any profits remaining, the transferors are entitled to receive this portion up to an amount not exceeding the book value of non-performing assets less the transfer price and the transferors’ share in the first portion of the profits. In 2006, TAMC informed the Bank and its subsidiaries of a loss sharing at the end of the fifth year of Baht 730 million. The Bank and its subsidiaries had recognized potential loss sharing from TAMC by the said amount as provision for contingent liability. In addition, the Bank had been informed of potential loss on an adjustment to the transferred price of non-performing assets on pledged machinery of Baht 4,341 million in November 2006. The Bank denied such adjustment on the ground that it was non-compliant with the Asset Transfer Agreement dated October 12, 2001, hence not enforceable by law. The Bank, however, had recorded a potential loss from the adjustment of machinery of Baht 4,341 million as a provision for contingent liability. At present, the Bank has already started legal proceedings against TAMC. As of December 31, 2008 and 2007, the Bank and its subsidiaries have estimated the present value of expected loss sharing from TAMC (excluding provision for contingent liability on an adjustment to the transfer price for previously pledged machinery, as discussed above) as at the end of the tenth year in the consolidated financial statements at the amount of Baht 1,240 million and Baht 1,228 million, respectively, and in the financial statements (Bank only) at the amount of Baht 1,201 million and Baht 1,198 million, respectively, based on the report from TAMC on the status of transferred assets and other historical information related to non-performing assets management. The discount rate used to calculate the present value of expected future loss is equal to the rate of return on assets or financial instruments having similar properties. The cumulative provisions for contingent liability (including provision for contingent liability on an adjustment to the transfer price on previously pledged machinery) is Baht 5,857 million in the consolidated financial statements and Baht 5,818 million in the financial statements (Bank only). For the year ended December 31, 2008, the Bank and its subsidiaries recognized the present value of expected loss shairing from TAMC Baht 61 million as an interest expense in the consolidated statement of income and the statement of income (Bank only). • PhayathaiAssetManagementCompany(PAMC) Phayathai Asset Management Company Limited (“PAMC”) was registered with the Ministry of Commerce on August 9, 2000 and registered with the Bank of Thailand to operate as an asset management company on September 1, 2000. The Bank holds approximately 100% of the share capital of PAMC. As of December 31, 2008 and 2007, the Bank had obligations to register the transfer of ownership of the transferred assets, referred to below. Under conditions of the asset transfers, the Bank (transferor) delivers the documents relating to these assets to PAMC (transferee) within 30 days from the transfer date (the date stated in the contract to transfer non-performing assets), unless mutually agreed by the contracting parties to extend the delivery period. The transferor or the transferee has the right to revise the transfer prices of such assets within 180 days from the transfer date.


ThesaleofassetsbyPhayathaiAssetManagementCompanyLimited On September 3, 2003, PAMC signed an agreement with Bangkok Commercial Asset Management Co., Ltd. (“BAMC”) for the sale of assets as mentioned above. The effective date of the asset transfer was September 30, 2003. The transfer of the assets and their underlying collateral was made under the provisions of the Emergency Decree on Asset Management Company, B.E. 2541 (1998), allowing the fixing of transfer prices as agreed by PAMC and BAMC. On the transfer date, BAMC paid PAMC the total value of the assets in the form of a negotiable promissory note issued on September 30, 2003 for an amount of Baht 19,533 million, which was the non-performing loan amount of Baht 16,634 million and the properties foreclosed amount of Baht 2,899 million, with the maturity date falling on September 30, 2015. The interest on the promissory note was fixed at a rate equivalent to the weighted average interest rates for all types of Thai Baht deposits of the five largest local commercial banks. The first payment is due on the 6th anniversary of the promissory note issuing date while subsequent payments will be on a yearly basis after the first payment until the maturity date. One condition was that endorsement on the promissory note by the transferor to negotiate the promissory note with any party other than TMB Bank, the Bank of Thailand or the Financial Institutions Development Fund was non-exercisable. In case of BAMC’s decision to go into liquidation before the promissory note’s maturity date, BAMC is required to transfer the rights and obligatory commitments over the promissory note to another juristic person as consented to by PAMC. Both PAMC and BAMC have the right to call for an adjustment to the prices of the transferred assets within 180 days from the transfer date. The price adjustment, if in effect, could be done by issuing an additional promissory note by PAMC or by BAMC, as the case may be. PAMC and BAMC have mutually agreed that recognition of profit or loss would be computed at the end of the sixth year and the twelfth year after the transfer date. Computation of profit or loss from asset management is to be made on the value received from the debt collection process. The debt collection can be accumulated on a cash basis until the computation date, only on the debts that are fully settled. The recognition must come from the value received less cost of each asset at the transfer date, administrative expenses on each of the debts settled, and interest expense on the promissory note. At the end of the sixth year and the twelfth year from the transfer date, results of the management of assets under the agreement must be shared between BAMC and PAMC. In case of debt settlement done through asset transfer, recognition of profit or loss occurs only after the asset is successfully disposed of to clear the debt. In case of a loss from the management of group 1 assets, PAMC will absorb the first 20% of the loss. The next 20% of the loss will be shared equally at a ratio of 1:1 between PAMC and BAMC. The rest of the loss will be absorbed in full by BAMC. In case of a loss from the management of group 2 assets: (a) If the transfer prices are not at a discount, PAMC will absorb the first 30% of the loss, while the next 20% of the loss will be shared equally at a ratio of 1:1 between PAMC and BAMC. The rest of the loss will be absorbed in full by BAMC.

142 A n n u a l R e p o r t 2 0 0 8

(b) If the transfer prices are at a discount of 5%, PAMC will absorb the first 25% of the loss, while the next 20% of the loss will be shared equally at a ratio of 1:1 between PAMC and BAMC. The rest of the loss will be absorbed in full by BAMC. (c) If the transfer prices are at a discount of 10%, PAMC will absorb the first 20% of the loss, while the next 20% of the loss will be shared equally at a ratio of 1:1 between PAMC and BAMC. The rest of the loss will be absorbed in full by BAMC. (d) If the transfer prices are at a discount of 15%, PAMC will absorb the first 20% of the loss, while the next 20% of the loss will be shared equally at a ratio of 1:1 between PAMC and BAMC. The rest of the loss will be absorbed in full by BAMC. In case of a profit from the management of group 1 and group 2 assets, the first portion of the profit not exceeding 20% of the transfer prices will be shared equally at a ratio of 1:1 between PAMC and BAMC. The rest of the profit will be taken by PAMC in full, but not exceeding the margin between the book value and the transfer prices. The remaining profit thereof, if any, will be taken in full by BAMC. Between September 30, 2003 and the end of 2005, PAMC sold and transferred the assets comprising investments in receivables, loans and receivables, both secured and unsecured, non-performing assets, and related assets to BAMC at a total price of Baht 19,712 million. BAMC paid PAMC the said total value of the assets in the form of a negotiable promissory note and PAMC then endorsed the promissory note to transfer the whole amount thereof to TMB for repayment of long-term loans. Adjustments to the transfer prices and returns of the non-performing loans and non-performing assets made between PAMC and BAMC for various reasons until end-2005 amounted to Baht 1,011 million in total. PAMC issued a promissory note of Baht 1,011 million to BAMC as payment for the said adjustments. Presently, PAMC is in the process of issuing a promissory note of Baht 4 million to BAMC for a spread of prices from sales of the non-performing assets in 2003. PAMC then recognized interest payable on the said promissory note for the years ended December 31, 2008 and 2007 in an amount of Baht 17 million and Baht 20 million respectively and presented these as interest expenses in its financial statements. In 2006, PAMC and BAMC prepared minutes of a meeting regarding details of the calculation of indemnity to be paid by PAMC to BAMC according to the non-performing asset purchase agreement, under which the two parties agree to settle an indeminity between them by the end of the sixth year or the twelfth year by means of offsetting with the amount payable by BAMC under the promissory note on the date stated in the agreement dated September 3, 2003. As at 31 December 2008 and 2007, the Group estimated the present value of expected loss sharing from BAM as at the end of the twelfth year at the amount of Baht 3,390 million and Baht 3,204 million, respectively, by considering the report from BAM on the status of assets transferred from the subsidiary and other historical information related to non-performing assets management. The discount rate used to calculate the present value of expected future loss is equal to the rate of return on assets or financial instruments having similar properties. For the year ended 31 December 2008, the Group recognised the increase in provision for contingent liability of Baht 186 million as an interest expense in the consolidated statement of income.


• BangkokCommercialAssetManagementCo.,Ltd.(BAMC) On October 9, 2006, the Bank entered into an agreement with Bangkok Commercial Asset Management Co., Ltd. (“BAMC”) for the transfer of non-performing assets (NPA). The transfer price would be prorated by the appraised value of each asset group based on the liquidity condition of the asset. This is in compliance with the Bank of Thailand’s Notification Re: “Requirements and Operation Procedures for Asset Management Companies” dated November 27, 2000, and the Royal Decree on Asset Management Companies, B.E. 2541. The Bank is required to complete the classification of NPA within 120 days from the agreement-signing date. BAMC will examine the assets before confirming to the Bank the purchase price on individual assets within 30 days from the date of asset classification made by the Bank. The Bank and BAMC will enter into a sale and purchase agreement within 30 days from the signing date of the NPA transfer agreement. Payment for NPA will be in the form of non-interest bearing promissory notes. The term of the promissory notes will depend upon the liquidity of the NPA transferred. For the years ended December 31, 2008 and 2007, the Bank entered into sale and purchase agreements with BAMC (transferee) to sell NPA at net book value (net of allowance for impairment) totaling Baht 266 million and Baht 1,482 million respectively, with related gain of Baht 0.11 million and related loss of Baht 331 million, respectively. The Bank received promissory notes avaled by the Financial Institutions Development Fund of Baht 266 million and Baht 1,151 million, respectively which mature in 2009-2016. Upon receipt, the Bank recognized present value losses on these notes of Baht 33 million and Baht 160 million respectively, which have been recorded in other expenses. Non-Performing Assets (NPA) (Bank only) NPAs consist of properties acquired from auction, properties acquired from debt settlement, and disused properties, all of which generate a small amount of revenues or none at all, while the Bank still has to set aside provisions for impairment of these assets. The impairment of these NPAs is booked in accordance with the Bank’s NPA sale acceleration plan. Shown in the below table are the Bank’s disposal of NPAs and provisions for impairment of NPAs and other assets in 2007 and 2008: As of December 31, 2008 As of December 31, 2007 (Bt. million) (Bt. million) Beginning balance 23,450 26,853 Increase (Decrease) (2,719) (3,403) Ending balance 20,731 23,450 Provision for impairment (3,913) (3,980) Total NPAs-net 16,818 19,470 • NPAManagement(Bankonly) The NPAs held by the Bank are scattered nationwide. Overhead expenses to keep the properties in good condition and ready for disposal is around Baht 38 million a year. However, the Bank has put up some of the properties for rent to help save the maintenance cost on the properties. In 2007 and 2008, income from the rental of such properties was Baht 62 million and Baht 60 million respectively.

144 A n n u a l R e p o r t 2 0 0 8

To facilitate the asset sales, the Bank has prepared the property database to be available via the Bank’s Internet and intranet system and other printed materials to support both internal and external sale channels. All bank employees, of more than 8,000 persons at different branch locations nationwide, as well as estate agents and the public, have taken part in the sale pitch, with sale commission provided by the Bank as incentives. In 2007 and 2008, TMB’s net income from disposal of its NPAs totaled Baht 7,918 million and Baht 5,221 million respectively. Investments in securities (Bank only) As of December 31, 2007 and December 31, 2008, the Bank’s net investments in securities (excluding investments in subsidiaries and associated companies) stood at Baht 92,640 million and Baht 80,739 million, respectively, and the market value of investments in debt securities was Baht 82,080 million and Baht 77,356 million, respectively. The Bank principally holds debt securities for investment purpose. Corporate Treasury Group, which handles the asset and liability management, is responsible for managing the debt securities portfolio, except those held for trading purpose. Meantime, Treasury & Markets Group is responsible for managing the minor portion of the debt securities. The majority of the debt instruments invested by the Bank are government and state enterprise bonds giving long-term fixed yields. The Bank also invests in private sector debt instruments but in a limited amount and has gradually decreased this portfolio in order to lower the credit risk. The debt securities held for investment purpose consist of available-for-sale securities and held-to-maturity securities. Investment Banking Group is responsible for managing the Bank’s equity securities investments, which as of December 31, 2007 and December 31, 2008 (excluding investments in subsidiaries and associated companies) amounted to Baht 11,776 million and Baht 7,285 million, respectively. The Bank principally invests in equity securities that are marketable on the stock market, unit trusts, and non-listed securities acquired through either investments in joint venture projects or debt restructuring.


The table below illustrates TMB’s investment portfolio for the periods indicated: As of December 31, (Bank only) 2008 2007 2006 Acquisition cost/ Market Acquisition cost/ Market Acquisition cost/ Market Amortized cost value Amortized cost value Amortized cost value (Bt. million except in) Investments for trading Debt securities 5,003 5,010 4,538 4,539 1,025 1,019 Equity securities 79 53 - - - - Available for sales investments Debt securities 34,934 35,362 41,158 41,235 64,940 64,788 Equity securities 4,137 2,398 7,647 7,424 6,828 5,344 Held to maturity investments Debt securities 36,053 36,984 36,609 36,306 37,275 35,827 Equity securities - - - - - - General investments Debt securities - - - - - - Equity securities 3,069 2,610 4,129 4,115 5,066 5,604 Less Allowance for revaluation (216) - 1,258 - (1,592) - Less Allowance for impairment (2,320) - (2,699) - (940) - Total investments 80,739 82,417 92,640 93,619 112,602 112,582 Investments in subsidiaries/ associated companies 2,223 2,223 2,957 2,957 4,306 4,306 Total 82,962 84,640 95,597 96,576 116,908 116,888 • Allowanceforimpairmentofinvestments Allowance for impairment of investments as of December 31, 2007 and December 31, 2008 was set aside based on the accounting standards for securities impairment. The allowance for investments in equity securities was set at Baht 2,649 million and Baht 2,270 million, respectively, and debt securities at Baht 50 million in both periods, making Baht 2,699 million and Baht 2,320 million in total, respectively. • Interbankandmoneymarketinstruments TMB’s interbank and money market items as of December 31, 2008 were Baht 72,384 million, up by Baht 52,785 million or 269.3% from December 31, 2007 due to the Bank’s assets and liabilities management. Liquidity and funding • Liquiditymanagement The objective of liquidity management is to keep the Bank’s financially capable of performing its financial obligations at present and in future and generating benefits when the market condition serves. The financial obligations arise from deposit withdrawal, repayment of debts incurred on matured investments, loan expansion, working capital requirement, and legally required provisioning. The Bank has adequate liquidity sources and can manage its liquidity through the domestic and foreign money market, the exchange market, and the repurchase market.

146 A n n u a l R e p o r t 2 0 0 8

The table below shows the Bank’s liquidity status for the periods indicated: December 31 2008 2007 2006 (Bt. million except in %) Liquid assets 163,877 140,980 162,085 Loans/Deposits (%) 94.2 100.1 95.2 Loans/Deposits (baht only) (%)) 92.0 98.0 92.2 Liquid assets/Assets (%) 27.3 22.8 21.6 Liquid assets/Deposits (%) 36.4 30.3 28.5 • Liquidity(BankOnly) As of December 31, 2008, TMB had liquid assets of Baht 163,877 million, shifted from Baht 140,980 million as of December 31, 2007 resulting largely from a increase in interbank and MM items. Net cash used in operating activities was in a deficit of Baht 12,754 million as of December 31, 2008, compared with Baht 49,570 million a year earlier, caused chiefly by a drop in loan. Deposits decreased by 3.2% from Baht 465,628 million as of December 31, 2007 to Baht 450,560 million as of December 31, 2008. Borrowings increased by 24.7% from Baht 53,215 million as of December 31, 2007 to Baht 66,342 million as of December 31, 2008, due primarily to issuing bills of exchange. Capital expenditures Capital expenditures (the total increment in addition to land, premises & equipment but excluding revaluation surplus on assets) amounted to Baht 2,844 million in 2006, Baht 1,578 million in 2007, and Baht 549 million as of December 31, 2008. In 2008, the Bank’s capital expenditures mainly were investments in electronic appliances and in the expansion of branch network and ATM/EDC for service point expansion; procurement of consumer sale tools to enhance the speed and segmented product and service offering by branches with a complete and updated availability of consumer product information; intra-group service system development with member companies such as ING Funds (Thailand) Co., Ltd., ING Life Ltd., and TMB Asset Management Co., Ltd.; enhancement of credit process rapidness through projects such as one-day approval process to help boost the Bank’s business volume and income; remodeling of some of the existing un-refurbished branches; replacement of computers, printers, and automatic pass-book update machines for branches; IT security system improvement; enhancement of application system flexibility in a mix & match pattern for a more diverse product development; application program development for all units to increase their efficiency and compliance with Basel II and BoT standards; and automation of the business process improvement for operational cost reduction and risk mitigation. Capital adequacy According to the Bank of Thailand’s notification, commercial banks registered in Thailand are required to maintain, at end of day, a combined Tier 1 and Tier 2 capital adequacy ratio (CAR) at a minimum of 8.5%, with Tier 1 CAR of not less than 4.25%. To meet this requirement, as of December 31, 2008 TMB had total capital of Baht 63,105 million, of which Baht 45,986 million was Tier 1 and Baht 17,794 million was Tier 2, and maintained a CAR under Basel II standards at 13.91%, which was well above the BOT’s minimum requirement.


Risk from economic condition

Thai economy in 2008 experienced a slowdown from last year due to several risks from external and

internal factors. Key external factors were the impact from US financial crisis which led to global economic

slowdown and global oil price hike during the first 7 month of this year. Internal factors such as increasing

inflationary pressure and loss of confidence in uncertain political situation led consumer to be cautious on their

spending while investors postponed their investments. Meanwhile, Government investment decreased from

political uncertainty and changing of government itself in which it delayed the implementation of several

government projects. So, budget disbursement was not able to meet its target. Furthermore, the prolonged anti-

government protest which led to the closure of Suvarnabhumi and Don Mueang airports in the late November until

early December, deteriorated foreign investors confidence as well as damaged tourism industry. The US

economy, EU and Japan, Thailand’s major trading countries, have also entered recession period since the third

quarter of 2008 and have had a large negative impact on exports of goods and services in the last quarter. The

affected manufacturing industries have had to layoff workers which subsequently decrease domestic demand and

also had a crucial part slowdown of Thai economy from average 5.1% growth in the first 3 quarter of this year to

experience a growth contraction in the last quarter of 2008, the first contraction in nearly 10-year.

The Thai economy in 2009 is expected to encounter a tough period. The export sector, the main driver of

Thai economic growth in the past several years, would rapidly slowdown especially in the first half of this year

after global recession heading to its bottom as well as increasing trade barriers from trading’s partners. Moreover,

the ongoing political instability and the downward trend of agriculture prices in line with decreasing global

commodity prices would cause both consumers and investors to lower their consumptions. Unemployment is

expected to rise. However, in 2009, there are several positive factors that can help to deter the slowdown of

domestic demand such as the downward trend of inflation from decreasing oil prices and commodity prices, low

interest rate and also the stream line of government stimulus packages in which it can help to restore confidence

as well as domestic expenditure. Therefore, the Thai economy in 2009 could avoid recession period.

In 2009, TMB is well aware of risks from severe global economic slowdown as well as deterioration of Thai

economy. The bank has given important priority to analysis, close assessment on economy and risk management

that relate to bank performance by preparing measures and proper actions at all time so as to minimize the loss

to all related parties and the bank.

Risks from Material changes in the regulations that govern the Bank and its business activities.

2008 marked a major change in the regulations governing financial institutions following the enactment of

the Financial Institution Business Act, which came into force on August 3, 2008, and the Deposit Protection

Agency Act, which took effect on August 11, 2008.

ธนาคารทหารไทย จำกัด (มหาชน)

TMB BANK PUBLIC COMPANY LIMITED

Risk Factors

148 A n n u a l R e p o r t 2 0 0 8

Financial Institution Business Act

The main objectives of this act can be summed up into three major aspects:

1. The act aims to monitor risks incidental to the transactional concentration in activities such as lending

and lending-equivalent transactions, particularly transactions made with related parties and the transactions

favoring directors/senior management. The Bank therefore put in place an efficient control process to avoid

breaching this regulation. The act also covers a consolidated supervision of financial business group of the

financial institutions with the same regulation.

2. Financial institutions must implement risk management, with their board of directors and management

responsible for defining policies and business plans, prudently identifying risks from launching of new

transactions, regularly conducting a control self-assessment, and exercising good governance principles in the

business management.

3. To ensure consumer protection, banks must render customer services on the basis of equality,

transparency and openness through a thorough process and procedure and must have a complaint center to

cater to service users.

Based on the above objectives of the new legislation, it is essential for financial institutions to establish a

control process to make sure they could prevent risks of violating or failing to fully comply with the regulations.

After all, facing a complaint or lawsuit from customers or outsiders will certainly tarnish the Bank’s reputation,

image and operations.

Deposit Protection Agency Act

The act has become effective since August 11, 2008. Under this act, the full deposit guarantee provided

by the Financial Institutions Development Fund will be terminated and instead the Deposit Protection Agency

(“DPA”) will provide a protection for baht-denominated deposits in a limited amount per customer and per

institution. The protection amount will be gradually reduced on a yearly basis as follows: year 1 (2008) 100%

protected, year 2 protected for Baht 100 million/customer/institution, year 3 Baht 50 million, year 4 Baht 10

million, and year 5 onwards Baht 1 million.

Due to the fallouts from financial crisis in the USA and the EU countries, financial institutions have come

under liquidity crunch, thereby prompting their respective governments to implement urgent bailout plans including

government expanding the level of deposit protection. Likewise, ASEAN member countries have announced a

full deposit protection to restore the public confidence in the financial sector. For Thailand, to be prepared for the

global financial system fluctuations and to fend off impacts on domestic liquidity from international deposit and

capital outflows, as well as to build up depositors’ confidence, the Ministry of Finance has accordingly extended

the full protection period to cover second and third years.

As a result, the full 100% deposit protection will cover years 1-3 (August 11, 2008 - August 10, 2011), then

decreased to a maximum of Baht 50 million in year 4 (August 11, 2011 - August 10, 2012) and to Baht 1 million

in year 5 (August 11, 2012 onwards). This measure will help to alleviate the liquidity problem in the banking sector

to some degree.


Currently, this act is not yet been applicable to specialized financial institutions. These institutions must

hasten to strengthen their financial status and business management efficiency to maintain their competitiveness

by speedily building a strong retail customer base. Otherwise, they may risk facing a liquidity problem.

New laws related to financial institutions’ activities that are now under the government’s consideration

include the draft legislation on personal information protection and the business collateral act.

These laws, once endorsed by concerned authorities and coming into force, will affect the Bank’s

operations. Thus, it is necessary for the Bank to take a preparatory action to safeguard against all possible impacts.

Overview of TMB’s risk management

The Bank has set up its risk management structure in order to efficiently manage its core risks i.e. credit,

market, operational, liquidity, reputational and strategic risks. Various risk policies and procedures have been

established to provide common guidelines and standards to be applied consistently across the Bank.

The Bank manages its risks under the following key principles: core risks must be identified, measured,

monitored, reported, analysed and controlled; business activities are managed under a risk-return framework. The

Bank risk governance structure consists of the Risk Management Committee (RMC) and senior management risk

committees which provide forums to discuss specific risk areas: Asset and Liabilities Management Committee

(ALCO), the Credit Policy Committee, the Operational Risk Management Committee and the Chief Executive

Committee. The RMC has been delegated by the Board of Directors to review and oversee the management of all

risks across the enterprise and is authorized to approve the Bank’s overall risk management strategies, policies,

frameworks and standards, as well as aggregate risk tolerance and risk concentration levels.

While business units are primarily responsible for managing risks, all the risk management related functions

are under the stewardship of the Chief Risk Officer (CRO). There are dedicated units for market risk management,

credit risk management and operational risk management which are responsible for establishing firm-wide risk

management policies and guidelines, act as centers for risk management activities and assumes the following

roles: to develop and maintain risk management policies; to propose risk strategy and recommend risk appetite to

top management for approval, and to monitor, control and report risk levels to top management.

Risk factors associated with the Bank’s management

Key risks and risk management measures of the Bank are as follows:

Strategic risk

Strategic risk results from the exercise of strategic plans, business plans, strategic implementation, and

control which are considered inappropriate and inconsistent with both internal and external business

environments. The strategic risk is directly harmful to the bank’s income, capital and existence.

150 A n n u a l R e p o r t 2 0 0 8

In 2008, TMB, led by new management team and directors, has set the vision “to be the leading Thai bank

with world class financial solutions” and restructured the Bank to be the “Customer Centric Organization” with the

implementation of deposit-led strategy to reduce the credit risks from traditional loan-led strategy. TMB has

developed a 3-year strategic plan with the clear direction of market leadership in deposit and produced a 2009

business plan in line with the rapidly changing economic environment resulting from the global financial crisis and

global economic downturn.

To succeed in bank transformation and strengthen the bank foundation, TMB has devised the project

governance framework covering the initiation of projects, approval authority, implementation monitoring and

reporting of project progress.

Furthermore, TMB has improved the process of performance tracking and strategic control. Regular

meetings of the management team and business units are held to review the performance together with a

remedial plan in case of missing target. The strategic risk dashboard has been initiated to keep the management

informed and be aware of the strategic risk status on a quarterly basis. The control self assessment in strategic

risk is also annually evaluated by the management.

In all, TMB is strongly determined to increase its capability in strategic risk management starting from the

process of strategic planning, organization restructuring, staffing and project implementation till the performance

monitoring and controlling go in line with the bank’s key strategies. In addition, the strategic planning will be

reviewed continuously and regularly to be consistent with the changing situation.

Credit risk

The Bank is exposed to credit risk resulting from the possibility that a borrower or counterparty may fail to

meet its obligations in accordance with agreed terms, principally the failure to make required payments on loans

or obligations due to the Bank. To minimize this risk, the financial position of each potential customer or

counterparty is analyzed under certain financial and quantitative parameters according to a credit rating system

for its corporate banking and SME customers. The models’ performance are monitored and where necessary

redeveloped. In addition, the Bank analyses cash flow and other qualitative features such as industry trends,

competitiveness and management capabilities. Part of the Bank’s risk strategy is to mitigate concentration of its

credit exposure in any one industry or individual customer or counterparty in any country. For consumer credit,

the Bank utilizes credit scoring method for its approval. For housing loan products, the Bank additionally utilized

predefined expert judgment underwriting standards.

The development of a credit bureau in Thailand under which the Bank can obtain the credit status of its

existing and potential customers has improved the Bank’s ability to analyze credit and counterparty risk. The

significant credit risk are as follows:

• Risk from credit quality

The risk of non-payment by the Bank’s customers is affected by changes in economic and industry

conditions, the credit profile of its borrowers, the duration of its loans and the Bank’s risk management policies. In


addition, in recent years, SME debt, consumer debt, and particularly credit card debt have increased rapidly in

Thailand. These increased debt levels may cause certain of the Bank’s customers to become delinquent on their

loans. Further, when the Bank restructures NPLs, it may receive lower interest payments than originally agreed

to and, in some cases, the Bank may collect less than the original principal amount of loans.

• Risk from credit concentrations

Although the Bank has provided credits to a broad range of business sectors, its business, cash flows,

financial condition, results of operations and prospects may be adversely impacted from financial troubles

plaguing any business sector and the general economic condition. However, slumps in the manufacturing and

the wholesale & retail sectors may result in a greater number of NPLs in these sectors. The Bank monitors

concentration risk via single exposure limits as well as the establishment of industry limits.

• Risk from impairment of collaterals value

A substantial portion of the Bank’s loan portfolio is secured by real estate and other assets, the value of

which may be affected by the overall economic conditions of Thailand. A downturn in the real estate market could

result in the principal amount of loans secured by real estate exceeding the loan to value proportion as that at the

time of origination. Therefore, if Thai economy in general or real estate values in particular deteriorate, the Bank

may be required to adjust downward the value of collaterals securing its loans in future periods. Any decline in the

value of collaterals securing loans may result in an increase in the Bank’s allowance for doubtful accounts.

Market risk

Market risk exposes the Bank to fluctuations in interest rates, foreign exchange rates or stock prices that

can change the value of financial products of the Bank, leading to a potential loss.

For risk management purposes, the Bank has established various market risk policies, which set standards

and guidelines for market risk management. The business unit designated with the responsibility for market risk

management accomplishes this task under the standards set in the policies, while Market Risk Management

Group independently monitors the firm-wide market risk.

The Bank controls the actual market risk exposure by setting limits to the maximum exposure and

maximum loss approved by the Board of Directors through delegated authority. The significant market risks are

as follows:

• Foreign exchange risk

The Bank’s Treasury and Markets Group is responsible for managing foreign exchange positions of the

Bank’s trading book. In addition, Market Risk Management Group puts in place a framework of risk management

measurement designed to minimize the excessive risk from unfavorable changes in market conditions, which

adversely affect the prices or returns on the Bank’s trading and investment portfolios related to foreign currencies,

with strict limits on:

1. Foreign Exchange Risk Limit (Delta Limit) covers all foreign currency transactions. These are set in

accordance with the BOT regulations regarding daily foreign exchange overbought/oversold position (open position).

152 A n n u a l R e p o r t 2 0 0 8

2. FX Derivative Risk Limit applies to FX derivative products and related hedges. These refer to the

expected changes in the derivative prices for a given change in the underlying foreign exchange rate and are

imposed on:

2.1 FX Option Delta: the expected change in the derivative price for a given change in the underlying

foreign exchange rate.

2.2 Matrix Limit: the profit and loss that arises given market rate changes such as FX spot and FX volatility

change by 1% respectively. The limit is set against a worst-case scenario, i.e. the maximum loss figure that may

occur if the market parameters move against the existing position.

Within these limits, the Treasury and Markets Group is responsible for managing and trading the portfolio

and to optimize the return on the funds invested. Procedures, strategies and performance are reviewed by ALCO,

and adherence to the limits is monitored by market risk management.

• Interest rate risk

The Bank’s net interest income or net interest margin is dependent on the movement of interest rates and

mismatches in cash flows or re-pricing dates. Interest rate movements directly affect the Bank’s income and

expenses from assets and liabilities as well as capital fund. Interest rate risk management is undertaken in

accordance with the policy framework as approved by the Bank’s Board of Directors, by establishing and

monitoring various risk curbing limits such as Earnings-at-Risk, interest rate sensitivity gap limits and stop loss

limits. The ALCO oversees the firm-wide structural interest rate risk.

The Bank has adopted interest rate risk hedging measures to cushion the interest rate volatility, e.g.

rebalancing of assets and liabilities or setting of a proper mismatch by considering external and internal factors

including interest rate forecasted by the Bank’s Research Department under ALCO’s responsibility.

Liquidity risk

Liquidity risk is the risk that the Bank fails to perform the obligations on due dates given the failure to raise

the required amount of funds or to change assets into cash within the specified period of time at a reasonable

cost, which might cause damage to the Bank. The ALCO is responsible for the oversight of liquidity management.

The primary aim is to provide liquidity to the Bank in order to ensure that liquidity position is sufficient for the

Bank’s normal operations as well as for any crisis that may arise. The Bank’s liquidity level is to exceed the

minimum as required by BoT and complies with the risk framework approved by the Risk Management Committee

and the Board of Directors. The Bank reviews its liquidity risk policy for a normal and a critical situation on regular

bases or as required given any material change that may impact the bank’s position and to ensure alignment with

the Bank’s core policy, the organization structure, the regulatory rules, and the market condition that might be changing.

Balance Sheet Management Group (BSMG) has been entrusted by the ALCO with the duties of liquidity

management to maintain highly liquid assets in both baht and foreign currencies, and procurement of short-term

and long-term funding sources for the Bank to meet funding requirements for its business operations. BSMG

also closely reviews and controls the Bank’s liquidity position by preparing various forms of reports and simulates

liquidity crisis situations to facilitate management and maintaining of a portfolio of appropriately liquid assets and liabilities.


According to its funding structure as of 31 December 2008, the Bank’s deposits, interbank & money

market items, short-term and long-term borrowings were 85.1%, 1.8%, 6.6% and 5.9%, respectively.

Previously, the Bank relied chiefly on short-term funding. The Bank’s ongoing deposit-led strategy seeks to further

strengthen its financial position and operating results in order to boost depositors’ and customers’ confidence.

Meanwhile, priority is also given to liquidity risk management by increasing the minimum level of liquid assets,

keeping abreast of risk levels on a daily, weekly and monthly basis, setting risk limits, and taking proactive steps

to contain risks at an acceptable level. Plans for risk management in critical situations have been devised and tested

to ensure that the Bank has strategic plans for taking remedial action should an early warning signal be triggered.

Operational risk

Operational risk is defined as the risk of loss resulting from inadequate or failed internal processes, people

and systems or from external events. This definition includes legal risk, but excludes strategic and reputational risk.

The Bank has developed an Operational Risk Management Framework to ensure that the Operational

Risks are properly identified, measured, monitored, reported, analysed and controlled in a systematic and

consistent manner. The framework consists of an Operational Risk Governance Structure, Operational Risk

Management Policies which cover all Basel II loss event categories, other supplementary policies, and three

Operational Risk Tools; Control Self Assessment (CSA), Key Risk Indicators (KRI), and Loss Data Collection and

Incident Management.

Business and Support Units are primarily responsible and accountable for their own Operational Risk

Management and Control. The Bank has appointed a number of Unit Operational Risk Managers (UORM) in the

Business and Support Units who, with support from the Operational Risk Management Department, take on carry

out the Operational Risk Management responsibilities of their respective units.

Other major Operational Risk Mitigation Programs/Mechanisms include Product and Service Approval

Process (PSAP), Outsourcing Risk Management, and Business Continuity Planning (BCP).

To ensure that products and services are offered in a safe manner, the Product and Services Approval

Process (PSAP) is established to set guidelines for sign-off and approval of new products and services. This due

diligence process ensures that the risks created by the new products and services are properly identified and

addressed and the necessary infrastructure and controls are in place to support the new business.

The Bank has established the Outsourcing Risk Management Policy to set out the principles and standards

for the effective identification of the major risks created by outsourcing and the management of such risks.

The Bank has established the Business Continuity Management Policies and Standards to provide

guidance and standards for all units to develop Business Continuity Plan. The Business Continuity Management

Office is set up to oversee the implementation of BCM Policies and Standards and monitor BCM readiness of the

Group and lead the co-ordination of group-wide BCP initiatives to raise the overall BCP readiness of the Bank.

154 A n n u a l R e p o r t 2 0 0 8

Report of the Nomination, Remuneration and Corporate

Governance Committee

The Nomination, Remuneration and Corporate Governance Committee of the TMB Bank Public Company

Limited comprises two independent and two non-executive directors. In 2008 the Committee held 18 meetings.

With respect to nomination and remunerations, the Committee formulates policies and criteria for selection of

the Bank’s directors and high level executives; selects and nominates qualified persons to be the Bank’s

directors and senior executives; formulates policies on remuneration and other benefits including those offered

to directors, executives and staff. Other responsibilities are ensuring that directors and executives receive

appropriate remuneration, setting guidelines for their performance appraisal with a view to make adjustment to

their annual remuneration accordingly, and developing the Bank’s succession plan.

With respect to corporate governance, the Committee assists the Bank’s Board of Directors and the various

committees established by the Bank to conform to the principles of good corporate governance. The Committee

also prepares and monitors the Company’s Corporate Governance Guidelines and disseminates them to internal

and external parties involved, to keep them informed of the Bank’s important criteria and code of practice in line

with the principle of good corporate governance. Other responsibilities are to review and revise relevant policies,

principles, and performance guidelines regularly; recommend requirements relating to moral principles and

business ethics; consider good corporate governance practices of other institutions in Thailand and abroad,

recommend the adoption of such practices as modifications where appropriate to the Bank. In addition the

Committee oversees the implementation of good corporate governance to ensure its practical effectiveness,

continuity and appropriateness to the Bank’s business operations. The results are reported to the Bank’s Board

of Directors together with comments and recommendations for rectification and improvement where appropriate.

(Dr. Juanjai Ajanant)

Chairman of the Committee


In 2008, the Bank’s Audit Committee, served fully by independent directors who were not the bank’s executives or

employees of any kind, carried out its responsibilities, within its given authority and in accordance with the

guidelines set out by the Stock Exchange of Thailand and the Bank of Thailand. Major areas of responsibilities

can be summarised as follows:

1. Review and ensure quarterly, half-yearly and year-end financial statements are accurate and compliant to

accounting standards and regulatory requirements.

2. Review and ensure adequate and efficient internal control.

3. Review the disclosure of connected transactions or transactions that may lead to conflict of interest so as

to ensure the transparency, accuracy and completeness.

4. Review the Bank’s compliance practices to ensure that the Bank strictly complies with the provisions of the

Commercial Banking Act and the Securities and Exchange Act and other related regulatory and legal

requirements. Points of observation and recommendations were given to the Bank’s management to prevent

damaging circumstances. The Committee also insisted that the management be required to supervise the staff to

strictly adhere to all legal and regulatory requirements.

5. Select and propose to the Board of Directors and shareholder meeting the appointment of Bank’s auditor

and audit fee. In addition, the Committee is responsible for reviewing the non-audit-related engagements with the

Bank’s external auditor.

6. Closely supervise the Bank’s internal audit function including approving internal audit plans and assessing

audit performance to ensure sufficient audit resources and that all auditing activities were independently and

effectively conducted in accordance with the regulatory requirements.

The Audit Committee gained full co-operation from the Management as well as full access to all information

relevant to the Bank’s operations, necessary for them to discharge their responsibilities. The Committee held

twelve meetings in 2008. Relevant executive officers were invited to attend and clarify issues in the meetings, at

the discretion of the Committee. During the year, Audit Committee had recommended that Management rectify

deficiencies in unternal controls and operation and tighten internal controls accordingly. The Bank’s Board of

Directors and the Management had taken internal control and audit as well as the principles of good governance

practices very seriously.

(Vijit Supinit)

Chairman of Audit Committee

Report of the Audit Committee

156 A n n u a l R e p o r t 2 0 0 8

Board of Directors’ Responsibilities for Financial Reports

The Consolidated Financial Statements of TMB Bank Pcl. and its subsidiaries have been prepared under the

Public Limited Company Act, B.E. 2535 (1992), the Accountancy Act, B.E.2543 (2000), the notifications of the

Bank of Thailand, the Securities and Exchange Act and notification of the Securities and Exchange Commission

governing criteria, conditions and methods of report on disclosure of information relating to financial standing and

operational performance. Such reports must comply with the relevant accounting standards prescribed by the

Accounting Profession Council (Association of Certified Public Accountants and Auditors of Thailand).

In preparation of financial reports, consideration was made to select the appropriate accounting policy and apply

consistent practices. All material information has been sufficiently disclosed in the Notes to the Financial

Statements, upon which the auditor’s opinions are stated therein.

TMB’s Board of Directors is held accountable for the financial statement, including financial information as shown

in the Annual Report. The Board also viewed that the Consolidated Financial Statements of TMB Bank Pcl. and

its subsidiaries were prudently prepared with adequate disclosure of material information in showing the financial

standing and operational performance, with accuracy and reliability and in compliance with the related laws and

regulations.

(Mr. Boontuck Wungcharoen)


(Mr. Sathit Limpongpan)

Chairman

158 A n n u a l R e p o r t 2 0 0 8

Audit Report of Certified Public Accountant

To the Shareholders of TMB Bank Public Company Limited

I have audited the accompanying consolidated and Bank-only balance sheets as at 31 December 2008

and 2007, and the related statements of income, changes in equity and cash flows for the years then

ended of TMB Bank Public Company Limited and its subsidiaries, and of TMB Bank Public Company

Limited, respectively. The Bank’s management is responsible for the correctness and completeness of

information presented in these financial statements. My responsibility is to express an opinion on these

financial statements based on my audits.

I conducted my audits in accordance with generally accepted auditing standards. Those standards

require that I plan and perform the audit to obtain reasonable assurance about whether the financial

statements are free of material misstatement. An audit includes examining, on a test basis, evidence

supporting the amounts and disclosures in the financial statements. An audit also includes assessing

the accounting principles used and significant estimates made by management, as well as evaluating

the overall financial statement presentation. I believe that my audits provide a reasonable basis for

my opinion.


In my opinion, the consolidated and Bank-only financial statements referred to above present fairly,

in all material respects, the financial positions as at 31 December 2008 and 2007 and the results of

operations and cash flows for the years then ended of TMB Bank Public Company Limited and its

subsidiaries, and of TMB Bank Public Company Limited, respectively, in accordance with generally

accepted accounting principles.

(Wilai Buranakittisopon)

Certified Public Accountant

Registration No. 3920

KPMG Phoomchai Audit Ltd.

Bangkok

19 February 2009

160 A n n u a l R e p o r t 2 0 0 8

The accompanying notes are an integral part of these finalcial statements

TMB Bank Public Company Limited and its Subsidiaries

As at 31 December 2008 and 2007

(in Baht)

Balance Sheets

Cash 11,317,138,700 10,288,753,062 11,313,907,152 10,287,302,723

Interbank and money market items 5.1

Domestic items - Interest bearing 62,427,612,096 10,670,317,707 62,224,931,959 9,826,145,358

- Non-interest bearing 3,894,007,458 4,919,391,500 3,894,007,458 4,706,389,651

Foreign items - Interest bearing 2,913,190,682 2,981,955,498 2,913,190,682 2,981,955,498

- Non-interest bearing 3,352,112,792 2,187,864,073 3,352,112,792 2,084,712,613

Total interbank and money market items - net 72,586,923,028 20,759,528,778 72,384,242,891 19,599,203,120

Securities purchased under resale agreements 5.2 - 27,800,000,000 - 27,800,000,000

Investments 5.3, 5.5, 5.22

Current investments - net 30,547,327,833 28,749,804,476 30,547,327,833 28,249,771,329

Long-term investments - net 50,872,136,171 65,117,449,804 50,191,893,885 64,391,316,990

Investments in subsidiary and associated companies - net 2,563,814,517 2,479,000,005 2,222,984,141 2,957,383,256

Total investments - net 83,983,278,521 96,346,254,285 82,962,205,859 95,598,471,575

Loans and accrued interest receivable 5.4, 5.5

Loans 424,286,287,677 464,894,832,060 424,205,411,141 466,075,265,113

Accrued interest receivable 3,295,283,330 4,026,123,704 3,378,541,136 4,092,444,892

Total loans and accrued interest receivable 427,581,571,007 468,920,955,764 427,583,952,277 470,167,710,005

Less Allowance for doubtful accounts 5.6 (45,462,522,673) (51,485,940,125) (43,932,355,863) (49,930,496,665)

Less Revaluation allowance for debt restructuring 5.7 (453,251,875) (628,190,669) (453,251,875) (628,190,669)

Loans and accrued interest receivable - net 381,665,796,459 416,806,824,970 383,198,344,539 419,609,022,671

Properties foreclosed - net 5.8 19,260,132,928 22,555,597,333 16,817,928,476 19,469,594,025

Customers’ liabilities under acceptances 102,483,987 279,984,976 102,483,987 279,984,976

Premises and equipment - net 5.9 14,387,717,494 13,066,851,952 14,315,550,037 12,941,957,740

Accounts receivable - net 11,364,747,081 8,750,008,461 11,149,448,353 8,652,524,292

Goodwill - net 4.2 59,988,168 322,761,632 - -

Other assets - net 5.5 7,257,222,376 5,184,919,324 7,145,283,676 4,913,018,441

Total assets 601,985,428,742 622,161,484,773 599,389,394,970 619,151,079,563

Consolidated Bank only

Assets Note 2008 2007 2008 2007


(in Baht)

Deposits 5.10

Deposits in baht 449,736,846,008 465,008,687,591 449,994,595,070 465,174,203,032

Deposits in foreign currencies 560,340,835 453,676,766 565,561,600 453,676,766

Total deposits 450,297,186,843 465,462,364,357 450,560,156,670 465,627,879,798

Interbank and money market items 5.11

Domestic items - Interest bearing 6,749,518,364 22,958,846,600 6,749,518,364 23,310,803,075

- Non-interest bearing 624,014,678 701,062,864 624,014,678 584,971,655

Foreign items - Interest bearing 1,666,769,500 1,073,377,742 1,666,769,500 1,073,377,742

- Non-interest bearing 258,877,212 259,620,927 258,877,212 111,460,037

Total interbank and money market items 9,299,179,754 24,992,908,133 9,299,179,754 25,080,612,509

Liabilities payable on demand 3,297,331,305 3,609,975,110 3,297,331,305 3,609,975,110

Securities sold under repurchase agreements 5.12 - 4,765,000,000 - 4,765,000,000

Borrowings 5.13

Short-term borrowings 34,930,037,158 22,401,922,531 34,955,037,158 22,200,675,897

Long-term borrowings 31,386,832,474 31,014,100,371 31,386,832,474 31,014,100,371

Total borrowings 66,316,869,632 53,416,022,902 66,341,869,632 53,214,776,268

Bank’s liabilities under acceptances 102,483,987 279,984,976 102,483,987 279,984,976

Accrued interest payable 1,891,165,715 2,412,941,673 1,891,178,145 2,412,989,316

Provisions of obligation from the 5.14,5.26, 5.27 9,247,063,902 9,048,962,622 5,817,520,521 5,814,790,521

transferred non-performing assets

Other provisions 5.15 3,160,657,011 1,093,369,263 4,559,299,300 2,878,121,552

Accounts payable 5,413,749,790 8,291,715,749 5,413,658,201 8,274,881,709

Other liabilities 7,913,355,442 4,267,837,095 7,849,747,880 3,869,655,175

Total liabilities 556,939,043,381 577,641,081,880 555,132,425,395 575,828,666,934


Assets Note 2008 2007 2008 2007

Balance Sheets TMB Bank Public Company Limited and its Subsidiaries



162 A n n u a l R e p o r t 2 0 0 8


(in Baht)

Equity

Share capital 5.16

Authorised share capital, Baht 10 par value

1,991,997,200 preferred shares 19,919,972,000 19,919,972,000 19,919,972,000 19,919,972,000

and 41,716,741,279 ordinary shares 417,167,412,790 417,167,412,790 417,167,412,790 417,167,412,790

Issued and paid-up share capital

1,991,997,200 preferred shares 19,919,972,000 19,919,972,000 19,919,972,000 19,919,972,000

and 41,536,741,279 ordinary shares 415,367,412,790 415,367,412,790 415,367,412,790 415,367,412,790

Discount on ordinary shares - net 5.16 (303,088,346,225) (303,088,346,225) (303,088,346,225) (303,088,346,225)

Surplus on revaluation of fixed assets 5.9, 5.17 5,288,040,203 3,249,390,425 5,288,040,203 3,249,390,425

Unrealised gain / (loss) on revaluation 5.3, 5.17 (191,739,644) 1,262,505,202 (191,188,394) 1,262,497,854

of investments

Currency translation changes 8,800,286 10,324,286 8,800,286 10,324,286

Retained earnings / (deficit)

Appropriated

Legal reserve 5.17 2,100,000,000 2,100,000,000 2,100,000,000 2,100,000,000

Others 8,717,165,400 8,717,165,400 8,717,165,400 8,717,165,400

Unappropriated (103,166,427,235) (103,652,056,633) (103,864,886,485) (104,216,003,901)

Total equity attributable to equity holders of the Bank 44,954,877,575 43,886,367,245 44,256,969,575 43,322,412,629

Minority interest 91,507,786 634,035,648 - -

Total equity 45,046,385,361 44,520,402,893 44,256,969,575 43,322,412,629

Total liabilities and equity 601,985,428,742 622,161,484,773 599,389,394,970 619,151,079,563


Assets Note 2008 2007 2008 2007



Balance Sheets



(in Baht)

Off-balance sheet items - contingencies 5.21

Aval to bills and guarantees of loans 3,610,514,735 5,236,279,603 3,610,514,735 5,236,279,603

Liabilities under unmatured import bills 1,233,034,380 1,321,386,533 1,233,034,380 1,321,386,533

Letters of credit 27,690,457,185 22,281,735,512 27,690,457,185 22,281,735,512

Other contingencies 359,928,834,194 321,158,834,930 359,928,834,194 321,158,834,930


Assets Note 2008 2007 2008 2007

(Boontuck Wungcharoen) (Sathit Limpongpan)

Chief Executive Officer Chairman of the Board

Balance Sheets TMB Bank Public Company Limited and its Subsidiaries


164 A n n u a l R e p o r t 2 0 0 8



Loans 24,150,176,454 29,180,277,713 23,883,175,815 28,751,014,886

Interbank and money market items 1,581,005,556 755,518,119 1,565,441,473 742,599,736

Investments 3,420,678,642 3,788,220,157 3,732,522,795 3,936,031,130

Total interest and dividend income 29,151,860,652 33,724,015,989 29,181,140,083 33,429,645,752

Interest expense

Deposits 10,197,339,499 14,078,037,770 10,199,092,189 14,089,347,177

Interbank and money market items 126,588,611 557,275,914 147,462,557 557,275,914

Short-term borrowings 1,165,703,066 1,282,248,614 1,165,349,862 1,282,206,145

Long-term borrowings 1,869,712,346 1,364,522,315 1,666,764,611 1,364,522,315

Total interest expense 13,359,343,522 17,282,084,613 13,178,669,219 17,293,351,551

Net interest and dividend income 15,792,517,130 16,441,931,376 16,002,470,864 16,136,294,201

Bad debts and doubtful accounts 5,177,138,202 31,732,393,026 5,191,784,680 31,770,049,771

Loss on debt restructuring (reversal) (100,968,042) (749,837,413) (121,494,337) (775,110,437)

Net interest and dividend income / (expense) after

bad debts, doubtful accounts and

loss on debt restructuring 10,716,346,970 (14,540,624,237) 10,932,180,521 (14,858,645,133)

Non-interest income

Loss on investments 5.3 (353,378,205) (830,802,522) (196,943,773) (3,917,509,958)

Share of profit from investments accounted for

using the equity method 465,463,156 281,625,017 - -


Acceptances, aval and guarantees 523,721,756 648,808,302 523,721,756 648,808,302

Others 4,487,406,499 4,770,703,913 3,611,929,742 3,690,732,718

Gain on exchange 951,405,272 1,095,299,490 939,593,555 1,114,555,295

Gain on sale of assets 626,159,148 - 576,047,797 -

Other income 313,376,950 625,575,700 291,063,706 583,968,666

Total non-interest income 7,014,154,576 6,591,209,900 5,745,412,783 2,120,555,023

(in Baht) Consolidated Bank only

Note 2008 2007 2008 2007



Statements of income



(in Baht) Consolidated Bank only

Note 2008 2007 2008 2007

(Boontuck Wungcharoen) (Sathit Limpongpan)

Chief Executive Officer Chairman of the Board



Statements of income

Non-interest expenses

Personnel expenses 5.15 6,040,896,392 4,814,639,122 5,694,397,355 4,401,372,991

Premises and equipment expenses 2,585,178,481 2,564,958,954 2,476,224,185 2,456,700,518

Taxes and duties 884,126,765 1,344,870,225 879,279,798 1,334,240,892

Fees and service expenses 1,249,116,828 1,249,643,218 1,188,990,205 1,199,433,611

Directors’ remuneration 30,912,744 38,598,405 26,734,256 32,804,730

Loss on impairment of properties foreclosed

and other assets 1,123,496,906 3,981,581,047 1,103,903,990 3,468,463,823

Contributions to Financial Institutions Development Fund

and Deposit Protection Agency 1,863,386,730 2,157,095,748 1,863,386,730 2,157,095,748

Loss on provisions of obligation from the transferred

non-performing assets (reversal) 5.14, 5.26, 5.27 (48,628,720) 3,978,189,862 (58,000,000) 773,910,521

Loss on other provisions 5.15 1,150,107,000 225,025,000 1,133,997,000 225,025,000

Loss on impairment of goodwill 5.28 - 12,237,426,473 - 12,237,426,473

Loss on sale of assets - 241,877,877 - 467,662,265

Other expenses 5.31 2,235,679,098 2,625,364,338 2,077,442,967 2,418,500,451

Total non-interest expenses 17,114,272,224 35,459,270,269 16,386,356,486 31,172,637,023

Profit / (loss) before income tax expense 616,229,322 (43,408,684,606) 291,236,818 (43,910,727,133)

Income tax expense 5.18, 5.31 86,632,009 132,491,792 2,090,857 4,821,082

Net profit / (loss) 529,597,313 (43,541,176,398) 289,145,961 (43,915,548,215)

Attributable to:

Equity holders of the Bank 423,657,943 (43,676,945,294) 289,145,961 (43,915,548,215)

Minority interest 105,939,370 135,768,896 - -

529,597,313 (43,541,176,398) 289,145,961 (43,915,548,215)

Earnings / (loss) per share 5.19

Basic 0.01 (2.60) 0.01 (2.61)

Diluted 0.01 (2.31) 0.01 (2.33)

166 A n n u a l R e p o r t 2 0 0 8

Con

solid

ated

Issu

ed and

Pr

emium /

Surp

lus on

Unr

ealis

ed

Fore

ign

Retaine

d ea

rnings

/ (d

eficit)

Total e

quity

Minor

ity

Total

pa

id-u

p (d

isco

unt)

reva

luation

gain /

(loss

) cu

rrenc

y A

ppro

priated

Una

ppro

priated

attribu

table to

intere

st

equity

sh

are ca

pital

on sha

re

of

on re

valuation

tra

nslatio

n Le

gal

Other

s

equity holde

rs

capital

fixed

ass

ets

of in

vestmen

ts

re

serve

of th

e Ba

nk

(in B

aht)

Ba

lanc

e at 1

Jan

uary 2

007

185,28

7,38

4,79

0

(90,31

9,47

3,54

8)

3,30

5,18

5,11

3

(1,576

,135

,703

) 6

,053

,370

2

,100

,000

,000

8

,717

,165

,400

(6

0,03

0,90

6,02

7)

47,48

9,27

3,39

5

511

,112

,317

4

8,00

0,38

5,71

2

Surp

lus on

reva

luation

of fixe

d as

sets

-

-

(55,79

4,68

8)

-

-

-

-

55,79

4,68

8

-

-

-

Unr

ealis

ed ga

in o

n re

valuation

of in

vestmen

ts

-

-

- 2

,838

,640

,905

-

-

-

-

2,838

,640

,905

-

2,838

,640

,905

Fore

ign cu

rrenc

y tra

nslatio

n -

-

-

-

4,27

0,91

6

-

-

-

4,27

0,91

6

-

4,270

,916

Net in

come / (

expe

nse)

reco

gnised

dire

ctly

in equ

ity

-

-

(55,79

4,68

8)

2,838

,640

,905

4,27

0,91

6

-

-

55,794

,688

2,84

2,91

1,82

1

-

2,842

,911

,821

Net pro

fit /

(loss

) -

-

-

-

-

-

- (4

3,67

6,94

5,29

4)

(43,67

6,94

5,29

4)

135,76

8,89

6

(43,54

1,17

6,39

8)

Total rec

ognise

d inco

me an

d ex

pens

e -

-

(55,79

4,68

8)

2,838

,640

,905

4

,270

,916

-

- (4

3,62

1,15

0,60

6)

(40,83

4,03

3,47

3)

135

,768

,896

(4

0,69

8,26

4,57

7)

Increa

se in

issu

ed and

fully

paid-

up

or

dina

ry sha

res

250,00

0,00

0,00

0

-

-

-

-

-

-

-

250,00

0,00

0,00

0

-

250,00

0,00

0,00

0

Increa

se in

disco

unt o

n or

dina

ry sha

res

-

(212

,768

,872

,677

) -

-

-

-

-

- (2

12,768

,872

,677

) - (2

12,768

,872

,677

)

Dec

reas

e in

minor

ity in

tere

sts

-

-

-

-

-

-

-

-

-

(12,84

5,56

5)

(12,84

5,56

5)

Balanc

e at 3

1 Dec

embe

r 2

007

435

,287

,384

,790

(3

03,088

,346

,225

) 3

,249

,390

,425

1

,262

,505

,202

1

0,32

4,28

6

2,100

,000

,000

8

,717

,165

,400

(1

03,652

,056

,633

) 4

3,88

6,36

7,24

5

634

,035

,648

4

4,52

0,40

2,89

3

Cha

nges

in equ

ity holde

rs in

200

8

Surp

lus on

reva

luation

of fixe

d as

sets

-

-

2,038

,649

,778

-

-

-

-

61,97

1,45

5

2,100

,621

,233

-

2,100

,621

,233

Unr

ealis

ed lo

ss o

n re

valuation

of in

vestmen

ts

-

-

- (1

,454

,244

,846

) -

-

-

-

(1,454

,244

,846

) -

(1,454

,244

,846

)

Fore

ign cu

rrenc

y tra

nslatio

n -

-

-

-

(1,524

,000

) -

-

-

(1,524

,000

) -

(1,524

,000

)

Net in

come / (

expe

nse)

reco

gnised

dire

ctly

in

equ

ity

-

-

2,038

,649

,778

(1

,454

,244

,846

) (1

,524

,000

) -

-

61,97

1,45

5

644

,852

,387

-

644

,852

,387

Net pro

fit

-

-

-

-

-

-

-

423

,657

,943

4

23,657

,943

1

05,939

,370

5

29,597

,313

Total rec

ognise

d inco

me an

d ex

pens

e -

-

2,038

,649

,778

(1

,454

,244

,846

) (1

,524

,000

) -

-

485

,629

,398

1

,068

,510

,330

1

05,939

,370

1

,174

,449

,700

Dec

reas

e in m

inor

ity in

tere

st

-

-

-

-

-

-

-

-

-

(543

,803

,232

) (5

43,803

,232

)

Dividen

d pa

id

-

-

-

-

-

-

-

-

-

(104

,664

,000

) (1

04,664

,000

)

Balanc

e at 3

1 Dec

embe

r 2

008

435

,287

,384

,790

(3

03,088

,346

,225

) 5,28

8,04

0,20

3

(191

,739

,644

) 8,80

0,28

6

2,100

,000

,000

8,71

7,16

5,40

0 (

103,16

6,42

7,23

5)

44,95

4,87

7,57

5

91,50

7,78

6

45,04

6,38

5,36

1

State

men

ts o

f ch

ang

es in

equi

ty

TMB

Bank

Pub

lic C

ompany

Lim

ited a

nd it

s Su

bsidia

ries

For th

e ye

ars e

nded

31

Dec

ember

200

8 and

200

7

The ac

compa

nying no

tes ar

e an

integr

al par

t of t

hese

fina

lcial s

tatemen

ts


TMB

Bank

Pub

lic C

ompany

Lim

ited a

nd it

s Su

bsidia

ries

For th

e ye

ars e

nded

31

Dec

ember

200

8 and

200

7

State

men

ts o

f ch

ang

es in

equi

ty

The ac

compa

nying no

tes ar

e an

integr

al par

t of t

hese

fina

lcial s

tatemen

ts

Ba

nk o

nly

Issu

ed and

Pr

emium /

Surp

lus on

Unr

ealis

ed

For

eign

Retaine

d ea

rnings

/ (d

eficit)

Total

pa

id-u

p (d

isco

unt)

reva

luation

gain /

(loss

) cur

renc

y Ap

prop

riated

Una

ppro

priated

equity

sh

are ca

pital

on sha

re

of

on re

valuation

tr

anslation

Lega

l

Other

s

capital

fixed

ass

ets

of in

vestmen

ts

re

serve

(in

Bah

t)

Ba

lanc

e at 1

Jan

uary 2

007

185,28

7,38

4,79

0

(90,31

9,47

3,54

8)

3,305

,185

,113

(1

,578

,988

,860

) 6

,053

,370

2

,100

,000

,000

8

,717

,165

,400

(6

0,35

6,25

0,37

4)

47,16

1,07

5,89

1

Surp

lus on

reva

luation

of fixe

d as

sets

-

-

(55,79

4,68

8)

-

-

-

-

55,79

4,68

8

-

Unr

ealis

ed gain on

reva

luation of in

vestmen

ts

-

-

-

2,841

,486

,714

-

-

-

-

2,841

,486

,714

Fore

ign cu

rrenc

y tra

nslatio

n

-

-

-

-

4,270

,916

-

-

-

4,270

,916

Net in

come / (

expe

nse)

reco

gnised

dire

ctly in

equ

ity

-

-

(55,79

4,68

8)

2,841

,486

,714

4

,270

,916

-

-

55,79

4,68

8

2,845

,757

,630

Net lo

ss

-

-

-

-

-

-

- (4

3,91

5,54

8,21

5)

(43,91

5,54

8,21

5)

Total rec

ognise

d inco

me an

d ex

pens

e

-

-

(55,79

4,68

8)

2,841

,486

,714

4

,270

,916

-

-

(43,85

9,75

3,52

7)

(41,06

9,79

0,58

5)

Increa

se in

issu

ed and

fully

paid-

up o

rdinar

y sh

ares

2

50,000

,000

,000

-

-

-

-

-

-

-

250,00

0,00

0,00

0

Increa

se in

disco

unt o

n or

dina

ry sha

res

-

(212

,768

,872

,677

) -

-

-

-

-

- (21

2,76

8,87

2,67

7)

Balanc

e at 3

1 Dec

embe

r 2

007

435

,287

,384

,790

(3

03,088

,346

,225

) 3

,249

,390

,425

1

,262

,497

,854

1

0,32

4,28

6

2,100

,000

,000

8

,717

,165

,400

(1

04,216

,003

,901

) 4

3,32

2,41

2,62

9

Cha

nges

in equ

ity holde

rs in

200

8

Surp

lus on

reva

luation

of fixe

d as

sets

-

-

2,03

8,64

9,77

8

-

-

-

-

61,97

1,45

5

2,100

,621

,233

Unr

ealis

ed lo

ss o

n re

valuation of in

vestmen

ts

-

-

-

(1,453

,686

,248

) -

-

-

-

(1,453

,686

,248

)

Fore

ign cu

rrenc

y tra

nslatio

n

-

-

-

-

(1,524

,000

) -

-

-

(1,524

,000

)

Net in

come / (

expe

nse)

reco

gnised

dire

ctly in

equ

ity

-

-

2,03

8,64

9,77

8

(1,453

,686

,248

) (1

,524

,000

) -

- 6

1,97

1,45

5

645,41

0,98

5

Net pro

fit

-

-

-

-

-

-

- 28

9,14

5,96

1

289

,145

,961

Total rec

ognise

d inco

me an

d ex

pens

e

-

-

2,038

,649

,778

(1

,453

,686

,248

) (1

,524

,000

) -

-

351

,117

,416

9

34,556

,946

Balanc

e at 3

1 Dec

embe

r 2

008

435

,287

,384

,790

(3

03,088

,346

,225

) 5

,288

,040

,203

(1

91,188

,394

) 8,80

0,28

6

2,100

,000

,000

8,71

7,16

5,40

0

(103

,864

,886

,485

) 4

4,25

6,96

9,57

5

168 A n n u a l R e p o r t 2 0 0 8


Cash flows from operating activities Net profit / (loss) 529,597,313 (43,541,176,398) 289,145,961 (43,915,548,215) Adjustments to reconcile net profit / (loss) to net cash provided by / (used in) operating activities Depreciation and amortisation 1,159,003,811 1,258,266,538 1,121,064,237 1,212,001,660 Goodwill amortisation - 373,529,365 - 356,429,897 Loss on impairment of goodwill - 12,237,426,473 - 12,237,426,473 Loss on impairment in value of securities 1,099,520,208 1,965,187,963 1,092,585,138 5,029,154,098 Unrealised loss / (gain) on revaluation of trading securities 19,060,018 (6,746,169) 19,060,018 (6,746,169) Loss on transfer of investments 2,561,748 - 3,347,750 - Loss on impairment of properties foreclosed and other assets 1,123,496,906 3,981,581,047 1,103,903,990 3,468,463,823 Share of profit from investments accounted for using the equity method (465,463,156) (281,625,017) - - Dividend income from associated companies 212,015,962 162,323,513 - - Bad debts, doubtful accounts and loss on debt restructuring 5,076,170,160 30,982,555,613 5,070,290,343 30,994,939,334 Gain on disposal of premises and equipment (14,712,906) (249,503,648) (16,130,108) (23,719,259) Loss on provisions of obligation from the transferred non-performing assets (reversal) (48,628,720) 3,978,189,862 (58,000,000) 773,910,521 Loss on other provisions 1,150,107,000 225,025,000 1,133,997,000 225,025,000 Expense for retirement project 917,180,748 - 917,180,748 - Gain on sale of investments (703,727,579) (1,037,537,649) (853,768,097) (1,014,511,785) Unrealised loss(gain) on exchange rate on debentures 239,360,000 (459,400,000) 239,360,000 (459,400,000) Amortisation of discount on investments (722,746,882) (689,608,170) (722,746,882) (689,608,170) Amortisation of premium on debentures (167,573,200) (283,448,260) (167,573,200) (283,448,260) Increase / (decrease) in other accrued expenses (54,166,715) (154,594,584) 22,905,181 (201,734,447) Net interest and dividend income (15,792,517,130) (16,441,931,376) (16,002,470,864) (16,136,294,201) Income tax expense 86,632,009 132,491,792 2,090,857 4,821,082 Interest and dividend received 30,120,028,475 34,422,257,634 30,129,754,586 34,080,421,748 Interest paid (13,634,389,479) (19,679,474,554) (13,639,750,390) (19,690,753,988) Income tax paid (181,387,265) (82,477,044) (3,830,855) (1,691,723) Profit from operating activities before before changes in operating assets and liabilities 9,949,421,326 6,811,311,931 9,680,415,413 5,959,137,419 (Increase) / decrease in operating assets Interbank and money market items (assets) (53,444,991,324) (2,943,954,882) (52,664,218,719) (2,427,308,508) Securities purchased under resale agreements 27,800,000,000 (2,300,000,000) 27,800,000,000 (2,300,000,000) Investments in trading securities (543,484,508) (3,513,145,632) (543,484,508) (3,513,145,632) Loans 26,983,051,483 62,647,477,461 28,441,794,347 64,301,017,264 Properties foreclosed 4,607,363,913 7,751,549,649 3,863,652,558 6,660,443,902 Other assets (7,175,464,342) (2,508,484,975) (6,573,124,682) (2,754,721,808) Increase / (decrease) in operating liabilities Deposits (15,165,177,514) (103,004,607,663) (15,067,723,128) (103,046,571,421) Interbank and money market items (liabilities) (14,470,244,489) 3,545,380,392 (15,781,432,755) 3,294,815,422 Liabilities payable on demand (312,643,805) 92,048,707 (312,643,805) 92,048,707 Securities sold under repurchase agreements (4,765,000,000) 4,765,000,000 (4,765,000,000) 4,765,000,000 Short-term borrowings 12,442,044,467 (26,563,330,000) 12,384,797,100 (26,563,330,000) Other liabilities 642,645,914 5,418,567,535 783,103,393 5,962,507,147 Net cash used in operating activities (13,452,478,879) (49,802,187,477) (12,753,864,786) (49,570,107,508)


2008 2007 2008 2007

(in Baht)



Statements of cash flows



Cash flows from investing activities

Purchases of available-for-sale investments (251,527,802,266) (44,269,657,723) (251,527,802,266) (41,846,657,723)

Sales of available-for-sale investments 262,851,173,117 68,323,469,844 262,348,801,456 66,123,866,854

Purchase of held-to-maturity investments (3,079,768,074) - (3,079,768,074) - Proceeds from redemption of held-to-maturity

investments 3,734,863,634 766,000,000 3,696,433,627 728,000,000

Purchases of general investments (2,430,000) (213,782,690) (2,430,000) (213,782,690)

Sales of general investments 1,450,273,018 1,492,650,841 1,438,258,757 1,479,507,261 Purchases of investments in subsidiary and associated

companies (163,152,300) (150,000,200) (533,152,300) (169,125,200) Sales of investments in subsidiary and

associated companies 860,430,164 232,193,829 887,275,702 270,154,237

Purchases of premises , equipment and leasehold (548,617,825) (1,578,567,052) (524,436,944) (1,561,122,460)

Sales of premises and equipment 198,796,219 341,611,642 168,943,793 110,940,370

Net cash provided by investing activities 13,773,765,687 24,943,918,491 12,872,123,751 24,921,780,649

Cash flows from financing activities

Repayment of long-term borrowings (1,023,657,170) (7,727,493,810) (822,410,536) (7,928,740,444)

Redemption of debentures (102,380,000) (5,280,865,140) (102,380,000) (5,280,865,140)

Redemption of subordinated debenture (800,000,000) - (800,000,000) -

Proceeds from issuance of long-term bill of exchanges 2,634,660,000 - 2,634,660,000 -

Increase in issued and fully paid-up - ordinary shares - 37,231,127,323 - 37,231,127,323

Foreign currency translation (1,524,000) 4,270,916 (1,524,000) 4,270,916

Net cash provided by financing activities 707,098,830 24,227,039,289 908,345,464 24,025,792,655

Net increase / (decrease) in cash and cash equivalents 1,028,385,638 (631,229,697) 1,026,604,429 (622,534,204)

Cash and cash equivalents at beginning of year 10,288,753,062 10,919,982,759 10,287,302,723 10,909,836,927

Cash and cash equivalents at end of year 11,317,138,700 10,288,753,062 11,313,907,152 10,287,302,723


2008 2007 2008 2007

(in Baht)



Statements of cash flows


For the years ended 31 December 2008 and 2007

Notes to the financial statements

170 A n n u a l R e p o r t 2 0 0 8

Thesenotesformanintegralpartofthefinancialstatements.

Thefinancialstatementswereauthorisedforissuebythedirectorson19February2009.

1 Generalinformation

TMBBankPublicCompanyLimited,“theBank”,isincorporatedinThailand.TheBankhasbeengrantedalicense

toconductcommercialbankingbusiness.ItsHeadOfficeis locatedat3000PhaholyothinRoad,Chomphol

Subdistrict,ChatuchakDistrict,Bangkok,Thailand.TheBankhasbranchesthroughoutThailandandincertain

overseascountries.

TheBankwaslistedontheStockExchangeofThailand(“SET”)on23December1983.

TheprincipalbusinessesoftheBankarefinancialservices.

On28December2007,theBankissuednewordinarysharesallottedtoINGBankN.V.,foreignandThaiinstitutional

investorsandexistingThairesidentialshareholderstotaling25,000millionshares,foratotalamountofBaht37,622

million.ThisresultedinINGBankN.V.becomingoneofthemajorshareholdersoftheBank.

TheconsolidatedfinancialstatementsrelatetotheBankanditssubsidiaries,togetherreferredtoas“theGroup”,

andtheGroup’sinterestinassociates.DetailsoftheBank’ssubsidiariesasat31December2008and2007were

asfollows:

Nameoftheentity Typeof Countryof Ownershipinterest

business incorporation 2008 2007

PhayathaiAssetManagementCo.,Ltd. Financial Thailand 100.00 100.00

IFCTAdvisoryCo.,Ltd. Financial Thailand - 100.00

DesigneeforETAContractLtd. Designee Thailand 99.40 99.40

TMBAssetManagementCo.,Ltd. Asset Thailand 75.00 56.25

management

TMBMacquarieSecurities(Thailand)Ltd. Securities Thailand - 51.00





TheconsolidatedfinancialstatementsoftheBankanditssubsidiariesfortheyearsended31December2008and

2007excludeinvestmentsinSiamResortFundinwhichtheBankholdsmorethan50%oftheissuedinvestment

unitsastheBankdoesnothaveanycontroloverthefinancialandoperatingpoliciesofthemutualfund(Type4

propertyfund).

On14August2008,theBankenteredintoaSharePurchaseAgreementwithMacquarieInternationalHoldings

Limited,London(“Macquarie”)toselltheTMBMacquarieSecurities(Thailand)LimitedsharesheldbytheBankto

MacquarieInternationalHoldingsLimited.ThistransactionwascompletedinSeptember2008.

TheconsolidatedfinancialstatementsoftheBankanditssubsidiariesfortheyearended31December2008includes

theoperationsofTMBMacquarieSecurities(Thailand)Ltd.untilthedatethattheBanksolditssharesinthisentity

inSeptember2008,andIFCTAdvisoryCo.,Ltd.untilthedatethatIFCTAdvisoryCo.,Ltd.ceaseditsoperationsin

December2008.

2 Basisofpreparationoffinancialstatements

ThefinancialstatementsissuedforThaireportingpurposesarepreparedintheThailanguage.ThisEnglishtranslation

ofthefinancialstatementshasbeenpreparedfortheconvenienceofreadersnotconversantwiththeThai

language.

ThefinancialstatementsarepreparedinaccordancewithThaiAccountingStandard(“TAS”)includingrelated

interpretationsandguidelinespromulgatedbytheFederationofAccountingProfessionsandhavebeenpresented

inaccordancewiththeannouncementoftheBankofThailanddated3August2008prescribingthepreparationof

financialstatementsofcommercialbanksandholdingparentcompaniesoffinancialservicesgroups,applicable

rulesandregulationsoftheSecuritiesandExchangeCommissionandwithgenerallyacceptedaccountingprinciples

inThailand.

ThefinancialstatementsarepresentedinThaiBaht,roundedinthenotestothefinancialstatementstothenearest

millionunlessotherwisestated.Theyarepreparedonthehistoricalcostbasisexceptasstatedintheaccounting

policies.

In2008,theGroupadoptedthefollowingnewandrevisedTASwhicharerelevanttoitsoperations:

TAS25(revised2007) Cash Flows Statements

TAS29(revised2007) Leases




172 A n n u a l R e p o r t 2 0 0 8

TAS33(revised2007) Borrowing Costs

TAS35(revised2007) Presentation of Financial Statements

TAS39(revised2007) Accounting Policies, Changes in Accounting Estimates and Errors

TAS41(revised2007) Interim Financial Reporting

TAS43(revised2007) Business Combinations

TAS51 Intangible Assets

TheadoptionofthesenewandrevisedTASdoesnothaveanymaterialimpactontheconsolidatedorBankonly

financialstatements.

TheFAPhasissuedduring2008anumberofrevisedTASwhichareonlyeffectiveforfinancialstatements

beginningonorafter1January2009andhavenotbeenadoptedinthepreparationofthesefinancialstatements.

TheserevisedTASaredisclosedinnote5.30.

Accountingpoliciesandmethodsofcomputationappliedinthefinancialstatementsfortheyearended31December

2008areconsistentwiththoseappliedinthefinancialstatementsfortheyearended31December2007exceptfor

thechangeinaccountingpolicydiscussedinNote4.2tothefinancialstatementsinrespectofgoodwillarisingfrom

businesscombinationsandtheprovisionforoff-balancesheetcontingenciesinrespectofperformingloansasa

provisionofobligation.

3 Useofestimatesandjudgements

ThepreparationoffinancialstatementsinconformitywithTASrequiresmanagementtomakejudgements,estimates

andassumptionsthataffecttheapplicationofpoliciesandreportedamountsofassets,liabilities,incomeand

expenses.Thesejudgements,estimatesandassumptionsarebasedonhistoricalexperienceandvariousotherfactors,

includingthepotentialimpactontheGroup’soperationsandfinancialpositionoftheglobaleconomiccrisis.Actual

resultsmaydifferfromtheseestimates.

Theestimatesandunderlyingassumptionsusedinthepreparationofthesefinancialstatementsarereviewedon

anongoingbasis.Revisionstoaccountingestimatesarerecognisedintheperiodinwhichtheestimateisrevised

iftherevisionaffectsonlythatperiod,orintheperiodoftherevisionandfutureperiodsiftherevisionaffectsboth

currentandfutureperiods.





Theaccountingpolicieswhichinvolvethemostcomplexorsubjectivedecisionsorassessmentsrelatetothe

allowancefordoubtfuldebts,provisionsofobligationsfornon-performingassets,therecoveryvalueofproperties

foreclosedandtheimpairmentofequitysecurities.Thedeterminationoftheseitemsiskeytothefinancialcondition

andresultsofoperations,andrequiresmanagementtomakecomplexjudgementsbasedoninformationandfinancial

datathatmaychangeinfutureperiods.Asaresult,determinationsregardingtheseitemsnecessarilyinvolvethe

useofassumptionsandsubjectivejudgementsastofutureeventsandaresubjecttochange,astheuseofdifferent

assumptionsordatacouldproducemateriallydifferentresults.

Theidentificationofimpairmentandthedeterminationofrecoverableamountareaninherentlyuncertainprocess

involvingvariousassumptionsandfactorsincludingthefinancialconditionofthecounterparty,expectedfuturecash

flows,observablemarketpricesandexpectednetsellingprices.

Portfoliosoffinancialassetsarecollectivelyevaluatedforimpairmentonthebasisofoutstandingassetsinthe

portfolioatthebalancesheetdateandhistoricallossexperienceforassetswithcreditriskcharacteristicssimilarto

thoseintheportfolio.Historicallossexperienceisadjustedonthebasisofcurrentobservabledata.WheretheBank

hasaspecificplantomanageitsnon-performingassets,theBankhasestimatedrecoveryvaluebyconsidering

factorssuchaspastsalesandtheexpectedrateofreturnbyinvestors.

TheBankcontinuestoconsiderasaleofpackagesofNPLsandNPAs.Howevergiventhecurrentdepressedmarket,

purchaseoffersmayreflectasignificantdiscounttotheexpectedrecoveryvaluetotheBankfromretaining,or

deferringdisposalof,theseassetsasrepresentedbytheircurrentcarryingvalues.TheBankwillconsiderpurchase

offersagainstthedirectandindirectbenefitstoitofreducingitstotalNPLandNPAportfolios.

4 Significantaccountingpolicies

4.1 Basisofconsolidation

TheconsolidatedfinancialstatementsrelatetotheBankanditssubsidiaries,andtheGroup’sinterestinassociates.

Significantintra-grouptransactionsbetweentheBankanditssubsidiariesareeliminatedonconsolidation.

Subsidiaries

SubsidiariesarethoseentitiescontrolledbytheBank.ControlexistswhentheBankhasthepower,directlyor

indirectly,togovernthefinancialandoperatingpoliciesofanentitysoastoobtainbenefitsfromitsactivities.The

financialstatementsofsubsidiariesareincludedintheconsolidatedfinancialstatementsfromthedatethatcontrol

commencesuntilthedatethatcontrolceases.




174 A n n u a l R e p o r t 2 0 0 8

Associates

AssociatesarethoseentitiesinwhichtheGrouphassignificantinfluence,butnotcontrol,overthefinancialand

operatingpolicies.TheconsolidatedfinancialstatementsincludetheGroup’sshareofthetotalrecognisedincome

andlossesofassociatesonanequityaccountedbasis,fromthedatethatsignificantinfluencecommencesuntilthe

datethatsignificantinfluenceceases.WhentheGroup’sshareoflossesexceedsitsinterestinanassociate,the

Group’scarryingamountisreducedtonilandrecognitionoffurtherlossesisdiscontinuedexcepttotheextentthat

theGrouphasincurredlegalorconstructiveobligationsormadepaymentsonbehalfofanassociate.

Business combinations

Businesscombinationsareaccountedforusingthepurchasemethod.Thecostofanacquisitionismeasuredatthe

fairvalueoftheassetsgiven,equityinstrumentsissuedandliabilitiesincurredorassumedatthedateofexchange,

pluscostsdirectlyattributabletotheacquisition.

4.2 Changesinaccountingpolicy

ThefollowingchangesofaccountingpolicybytheGrouphasnoeffectontheBankonlyfinancialstatements.

Until31December2007,theGroupaccountedforgoodwillarisingfromabusinesscombinationatcostless

accumulatedamortisationandimpairmentlosses.Amortisationwaschargedtothestatementofincomeoverthe

estimatedusefullifeof20years.

During2007,theFederationofAccountingProfessionsissuedTAS43(revised2007)“BusinessCombinations”which

iseffectiveforaccountingperiodsbeginningonorafter1January2008.TAS43(revised2007)requiresthatthe

acquirershall,attheacquisitiondate,recognisegoodwillacquiredinabusinesscombinationasanassetatcost.

Afterinitialrecognition,goodwillshallbemeasuredatcostlessanyaccumulatedimpairmentlosses.Goodwillisnot

amortisedandisinsteadtestedforimpairmentannually,ormorefrequentlyifeventsorchangesincircumstances

indicatethatitmightbeimpaired.

TheGrouphas,accordingly,changeditsaccountingpolicyforgoodwillprospectivelyfrom1January2008.Theeffect

ofthechangeinaccountingpolicyontheGroup’sconsolidatedfinancialstatementsfortheyearended31December

2008istoreducethechargetothestatementofincomeresultingfromtheamortisationofgoodwillthatwould

havebeenrecognisedunderthepreviousaccountingpolicybyapproximatelyBaht13million,withacorresponding

increaseinreportedprofitfortheperiod.Managementhasdeterminedthatthereisnoimpairmentinthecarrying

valueofgoodwillasat31December2008.





4.3 Recognitionofincome

Interest income and dividend

Interestanddiscountincomeonloansaregenerallyrecognisedonanaccrualbasis.InaccordancewiththeBank

ofThailand’sregulation,interestinarrearsformorethanthreemonths,regardlessofwhethertheloansarecovered

bycollateral,isnotaccruedbutisinsteadrecognisedasincomeonacashbasis.

TheBankhasreversedaccruedinterestincomeonloanswhichhavebeenrecognisedasincome,forinterestin

arrearsmorethanthreemonths,inaccordancewiththeBankofThailand’sregulations.

DividendincomeisrecognisedinthestatementofincomeonthedatethattheBank’srighttoreceivepaymentsis

established.


Feesandserviceincome(mutualfundmanagement,tradingsecurities,brokerage,advisoryandunderwriting)are

recognisedasincomewhenservicesarerendered.

4.4 Recognitionofinterestexpense

Interestexpenseondeposits,borrowings,anddeferreddiscountorpremiumisrecognisedonanaccrualbasis.

Premiumsoncurrencyhedgingcontractsofborrowingsareamortisedusingthestraight-linemethodovertheterm

ofthecontracts.

4.5 Incometax

Incometaxontheprofitorlossfortheperiodcomprisescurrenttax.Currenttaxistheexpectedtaxpayableon

thetaxableincomefortheperiod,usingtaxratesenactedatthebalancesheetdateandapplicabletothereporting

period,andanyadjustmenttotaxpayableinrespectofpreviousperiods.

4.6 Loans

Loans(exceptoverdrafts)areshownexclusiveofaccruedinterestreceivable.Unearneddiscountsreceivedin

advanceonloansareshownasdeductionsfromtheloans.




176 A n n u a l R e p o r t 2 0 0 8

Investmentsinreceivablesareinvestmentsinreceivablesofthesubsidiary,PhayathaiAssetManagementCo.,Ltd.,

whichareshownatcost,netofallowancesforimpairmentofinvestmentsinreceivablesandrevaluationallowance

fordebtrestructuring.Thesubsidiary’saccountingpoliciescomplywiththeBankofThailand’sregulations.These

proceduresrequirethatinvestmentsinreceivables,iftheyarerestructureddebts,mustberecordedasloans

andreceivablesatfairvalueasatthetransferdate.Thevalueshallbebasedonthepresentvalueofthefuture

collectionsaccordingtotherestructuringagreementsanddiscountedbythediscountratewiththeresultthatthe

presentvalueofthefuturecollectionsisequaltothebookvalueoftheinvestmentsinreceivables.Differences

betweenthenetbookvalueandthefairvalueatthetransferdatemustbeshownasalossondebtrestructuring

fromtransferringfinancialassetsinthestatementofincome.

4.7 Allowancefordoubtfulaccounts

AllowancefordoubtfulaccountsisdeterminedthroughmethodsbasedontheBankofThailand’sregulationsand

basedontheBank’sestimatedloanloss.TheBankprovidesallowancefordoubtfulaccountsbyanalysingindividual

accounts.Theallowancefornon-performingloanshasbeenspecificallydeterminedbythenaturesofloansandthe

relatedfactorssuchaspaymentability,collateral,historicallossandestimatedloss.Theallowanceforperforming

loanshasbeenassessedbasedupongeneralrelatedfactorssuchashistoricalloss,creditriskandmanagement

experience.Thisallowanceforperformingloansincludestheregulatoryminimumpercentagerequirementand

allowanceforlosseswhichhavebeenincurredbutnotyetidentified.WheretheBankhasaspecificplantomanage

itsnon-performingloanssuchasNPLsale,theBankhasestimatedrecoveryvaluebyconsideringpastNPLsales

andtheexpectedrateofreturnbyinvestors.

UndertheBOT’sdirective,withamendedcriteriainaccordancewiththeInternationalAccountingStandardNo.39

(IAS39)dated7December2006,theBankandcertainsubsidiarieshaveclassifieditsloanportfoliosintosixcategories,

primarilybasedonthedayspastdue.Forloansclassifiedaspassandspecialmention,thecalculationofallowances

fordoubtfulaccountsisbasedontheregulatoryminimumpercentagerequirement,takingintoconsiderationthe

collateralvalue,wherethecollateraltypeanddateofthelatestappraisalarequalifyingfactors.Forloansclassifiedas

sub-standard,doubtfulanddoubtfulofloss,theallowanceontheseaccountsissetat100percentofthedifference

betweentheoutstandingbookvalueofthedebtandthepresentvalueoffuturecashflowsexpectedtobereceived

ortheexpectedproceedsfromthedisposalofcollateralinaccordancewiththeBOTcriteria.

Anyadditionalallowancesfordoubtfulaccountsarechargedtotheexpenseforeachperiod.

TheBankwritesoffbaddebtsagainsttheallowancefordoubtfulaccountsfortheuncollectibleamounts.

Baddebtsrecoveredarecreditedtotheallowancefordoubtfulaccounts.





4.8 Troubleddebtrestructuring

Foreclosedassetstransferredfromtroubleddebtrestructuringarerecordedatthefairvalueoftheassetsnetof

estimateddisposalexpensesnotexceedingtheinvestmentinloansandunearnedinteresttowhichtheBankis

legallyentitled.Whererestructuringaloaninvolvesmodificationofitsterms,thepresentvalueofthefuturecash

flowsexpectedtobereceivedfromthosecustomersiscalculatedbyusingdiscountratesequivalenttothemarket

ratesatthetimeofrestructuring.Thedifferencebetweenthisandtheoutstandingbalancesofinvestmentinloansis

recordedasanallowanceforrevaluationondebtrestructuringinthebalancesheet.Thisallowanceforrevaluation

isamortisedtothestatementofincomeaccordingtotheamountsreceivedovertheremainingperiodofthedebt

restructuringcontract.

4.9 Investments

TheBankclassifiesdebtinstrumentsandmarketableequitysecuritiesastradingsecurities,available-for-salesecurities

orheld-to-maturitydebtinstruments,andclassifiesnon-marketableequitysecuritiesasgeneralinvestmentsor

investmentsinsubsidiaryorassociatedcompanies.

Investments in subsidiaries and associates

InvestmentsinsubsidiariesandassociatesintheBankonlyfinancialstatementsareaccountedforusingthecostmethod.

Investmentsinassociatesintheconsolidatedfinancialstatementsareaccountedforusingtheequitymethod.

Investments in debt and equity securities

Debtsecuritiesandmarketableequitysecuritiesheldfortradingareclassifiedascurrentinvestmentsandarestated

atfairvalue,withanyresultantgainorlossrecognisedinthestatementofincome.

Debtsecurities(includingnon-negotiablepromissorynotesavailedbyFIDFandreceivedonthetransferofimpaired

assetstoThaiAssetManagementCorporation)thattheGroupintendsandisabletoholdtomaturityarestatedat

amortisedcostlessimpairmentlosses.Thedifferencebetweentheacquisitioncostandredemptionvalueofsuch

debtsecuritiesisamortisedusingtheeffectiveinterestratemethodovertheperiodtomaturity.

Debtsecuritiesandmarketableequitysecurities,otherthanthosesecuritiesheldfortradingorintendedtobeheldto

maturity,areclassifiedasbeingavailable-for-saleandarestatedatfairvalue,withanyresultantgainorlossbeing

recogniseddirectlyinequity.Theexceptionsareimpairmentlossesandgainsorlossesfromtransferinvestment,

whicharerecognisedinthestatementofincome.Whentheseinvestmentsarederecognised,thecumulativegainor

losspreviouslyrecogniseddirectlyinequityisrecognisedinthestatementofincome.Wheretheseinvestmentsare

interest-bearing,interestcalculatedusingtheeffectiveinterestmethodisrecognisedinthestatementofincome.




178 A n n u a l R e p o r t 2 0 0 8

Equitysecuritieswhicharenotmarketablearestatedatcostlessimpairmentlosses.

Thefairvalueoffinancialinstrumentsclassifiedasheld-for-tradingandavailable-for-saleforequitysecuritiesis

determinedatthequotedbidpriceatthebalancesheetdate.

ThemarketvaluesofdebtinstrumentsingovernmentsecuritiesarecomputedusingtheThaiBondMarketAssociation’s

yieldcurve.

Themarketvaluesofdebtinstrumentsinthedomesticmarketarebasedonthemarketvaluesappraisedbyreliable

institutions,byusingyieldsofthosedebtinstruments,orbycomputationsbasedontheThaiBondMarketAssociation’s

yieldcurve,adjustedbyanappropriateriskfactor.Theinstitutionsperformingappraisalshavetoprovidewritten

documentationofthebasisoftheirappraisal.

Disposal of investments

Ondisposalofaninvestment,thedifferencebetweennetdisposalproceedsandthecarryingamounttogetherwith

theassociatedcumulativegainorlossthatwasreportedinequityisrecognisedinthestatementofincome.

IftheGroupdisposesofpartofitsholdingofaparticularinvestment,thedeemedcostofthepartsoldisdetermined

usingtheweightedaveragemethodappliedtothecarryingvalueofthetotalholdingoftheinvestment.

4.10 Propertiesforeclosed

Immovablepropertiesforeclosedacquiredfromdebtsettlementbefore2002arestatedatthelowerofappraised

valueorbookvalueoftherelateddebts,andimmovablepropertiesforeclosedacquiredfromdebtsettlementafter

2002arerecognisedatthefairvaluelessexpecteddirectsellingexpenses,notexceedingtheinvestmentinloans

andunearnedinteresttowhichtheBankislegallyentitled.Theassetsboughtfrompublicauctionarerecognisedat

purchasepriceplustransfercosts,lessexpecteddirectsellingexpenses.

WheretheBankhasaspecificplantosellimmovablepropertiesforeclosed,theBankwillassesstheexpected

recoveryvalueoftheimmovablepropertiesforeclosedaccordingtotheirgrade(basedonattributessuchaslocation,

availableutilities,andpotentialpropertyusage),numberofyearsholdingandmarketdemand.Therecoveryvalues

areassessedindividuallyforhighervalueproperties.Otherpropertiesareassessedonportfoliobasisandgrouped

accordingtotheirgradeandnumberofyearsholding.Then,thediscountrateswillbeappliedtothepropertiesbased

ontheirgradeandnumberofyearsholding.Thediscountusedisbasedonhistoricalsellingdataandmarketdemand.

Lossonimpairmentischargedtothestatementofincome.Gainsorlossesonthesalesofpropertiesforeclosed

arerecognisedinthestatementofincomeupondisposal.





4.11 Premisesandequipment

Owned assets

Landandbuildingsandequipmentarestatedatcostlessaccumulateddepreciationandimpairmentlossesexcept

forlandandbuildingswhicharestatedattheirrevaluedamounts.Therevaluedamountisthefairvaluedetermined

onthebasisoftheproperty’sexistinguseatthedateofrevaluationlessanysubsequentaccumulateddepreciation

andsubsequentaccumulatedimpairmentlosses.

Revalued assets

Revaluationsareperformedbyindependentprofessionalvaluerswithsufficientregularityincompliancewiththe

BankofThailand’snotificationtoensurethatthecarryingamountoftheseassetsdoesnotdiffermateriallyfromthat

whichwouldbedeterminedusingfairvaluesatthebalancesheetdate.

Anyincreaseinvalue,onrevaluation,iscreditedtoequityundertheheading‘revaluationsurplus’unlessitoffsets

apreviousdecreaseinvaluerecognisedinthestatementofincomeinrespectofthesameasset.Adecreasein

valueisrecognisedinthestatementofincometotheextentitexceedsanincreasepreviouslyrecognisedinequity

inrespectofthesameasset.Upondisposalofarevaluedasset,anyrelatedrevaluationsurplusistransferredfrom

equitytoretainedearningsandisnottakenintoaccountincalculatingthegainorlossondisposal.

Depreciation

Depreciationofbuildingsandequipmentischargedtothestatementofincomeonastraight-linebasisoverthe

estimatedusefullivesofassetsasfollows:

Depreciationofbuildings(includingsurplusonrevaluation)iscomputedusingthestraight-linemethodovertheir

remainingusefullives,(totalusefullivesarenotmorethan50years),asassessedbyindependentappraisal

companies.Depreciationisincludedinpremisesandequipmentexpenses.

Depreciationofequipmentiscomputedusingthestraight-linemethodovertheirusefullivesof3-10years.

Nodepreciationisprovidedonland,assetsunderconstructionorinstallationwork.

Depreciationoffixedassetsofoverseasbranchesiscomputedatratesspecifiedbythelawsapplicableineach

localityat20-25%ofcost.




180 A n n u a l R e p o r t 2 0 0 8

4.12 Intangibleassets

Goodwill (see note 4.2)

Goodwillarisesontheacquisitionofsubsidiaries.

Goodwillarisingontheacquisitionofaninterestinasubsidiaryrepresentstheexcessofthecostoftheadditional

investmentoverthecarryingamountofthenetassetsacquiredatthedateofacquisition.

Acquisitionspriorto1January2008

GoodwillrepresentstheamountrecognisedundertheGroup’spreviousaccountingpolicyunderwhichgoodwillwas

statedatcostlessaccumulatedamortisationandimpairmentlosses.

In2008goodwillisnotamortisedandisinsteadtestedforimpairmentannually,ormorefrequentlyifeventsor

changesincircumstancesindicatethatitmightbeimpaired.

4.13 Impairment

Impairment

ThecarryingamountsoftheGroup’sassetsarereviewedateachbalancesheetdatetodeterminewhetherthereis

anyindicationofimpairment.Ifanysuchindicationexists,theassets’recoverableamountsareestimated.

Goodwillandintangibleassetswithindefiniteusefullivesandintangibleassetsnotyetavailableforusearetested

forimpairmentannuallyandwhenindicatorsofimpairmentareidentified.

Animpairmentlossisrecognisedwheneverthecarryingamountofanassetoritscash-generatingunitexceedsits

recoverableamount.Theimpairmentlossisrecognisedinthestatementofincomeunlessitreversesaprevious

revaluationcreditedtoequity,inwhichcaseitischargedtoequity.

Whenadeclineinthefairvalueofanavailable-for-salefinancialassethasbeenrecogniseddirectlyinequityandthere

isobjectiveevidencethatthevalueoftheassetisimpaired,thecumulativelossthathadbeenrecognizeddirectly

inequityisrecognisedinthestatementofincomeeventhoughthefinancialassethasnotbeenderecognised.The

amountofthecumulativelossthatisrecognisedinthestatementofincomeisthedifferencebetweentheacquisition

costandcurrentfairvalue,lessanyimpairmentlossonthatfinancialassetpreviouslyrecognisedinthestatement

ofincome.





Calculation of recoverable amount

TherecoverableamountoftheGroup’sinvestmentsinheld-to-maturitysecuritiesandreceivablescarriedatamortised

costiscalculatedasthepresentvalueofestimatedfuturecashflows,discountedattheoriginaleffectiveinterest

rate.Receivableswithashortdurationarenotdiscounted.

Therecoverableamountofavailable-for-salefinancialassetsiscalculatedbyreferencetothefairvalue.

Therecoverableamountofnon-financialassetsisthegreateroftheassets’netsellingpriceandvalueinuse.In

assessingvalueinuse,theestimatedfuturecashflowsarediscountedtotheirpresentvalueusingapre-taxdiscount

ratethatreflectscurrentmarketassessmentsofthetimevalueofmoneyandtherisksspecifictotheasset.Foran

assetthatdoesnotgeneratecashinflowslargelyindependentofthosefromotherassets,therecoverableamount

isdeterminedforthecash-generatingunittowhichtheassetbelongs.

Reversals of impairment

Animpairmentlossinrespectofafinancialassetisreversedifthesubsequentincreaseinrecoverableamountcan

berelatedobjectivelytoaneventoccurringaftertheimpairmentlosswasrecognised.Forfinancialassetscarried

atamortisedcostandavailable-for-salefinancialassetsthataredebtsecurities,thereversalisrecognisedinthe

statementofincome.Foravailable-for-salefinancialassetsthatareequitysecurities,thereversalisrecognised

directlyinequity.

Animpairmentlossinrespectofgoodwillisnotreversed.Impairmentlossesrecognisedinpriorperiodsinrespect

ofothernon-financialassetsareassessedateachreportingdateforanyindicationsthatthelosshasdecreasedor

nolongerexists.Animpairmentlossisreversediftherehasbeenachangeintheestimatesusedtodeterminethe

recoverableamount.

Animpairmentlossisreversedonlytotheextentthattheasset’scarryingamountdoesnotexceedthecarryingamount

thatwouldhavebeendetermined,netofdepreciationoramortisation,ifnoimpairmentlosshadbeenrecognised.

4.14 Providentfund

TheBank,subsidiarycompaniesanditspermanentemployeesestablishedcontributoryprovidentfundsforits

employees.Membershiptothefundsisonavoluntarybasis.Contributionsaremademonthlybytheemployeesat

ratesrangingfrom2%to10%oftheirbasicsalariesandbytheBankandsubsidiarycompaniesat5%to10%ofthe

employees’basicsalaries.TheprovidentfundsareregisteredwiththeMinistryofFinanceasjuristicentitiesandare

managedbyalicensedfundmanagerandarethereforenotpresentedinthebalancesheets.




182 A n n u a l R e p o r t 2 0 0 8

4.15 Provisions

AprovisionisrecognisedinthebalancesheetwhentheGrouphasapresentlegalorconstructiveobligationasa

resultofapastevent,anditisprobablethatanoutflowofeconomicbenefitswillberequiredtosettletheobligation

andareliableestimatecanbemadeoftheamountoftheobligation.Iftheeffectismaterial,provisionsaredeter-

minedbydiscountingtheexpectedfuturecashflowsatapre-taxratethatreflectscurrentmarketassessmentsof

thetimevalueofmoneyand,whereappropriate,therisksspecifictotheliability.

Provisions for contingent liabilities

Whereaccountshavebeenclassifiedassubstandard,doubtful,doubtfuloflossandloss,theBankprovidesprovision

fortheoff-balancesheetcontingencieswhicharehighcreditrisksuchasloanguarantees,avalsorcommitments

irrevocablebyfinancialinstitutions.Theprovisionrateforsuchoff-balancesheetitemswillbeequaltotheallowance

rateforloansinthatparticularcase.

TheBankprovidesprovisionfortheoff-balancesheetcontingenciesonperformingloanssince30June2008and

forletterofguaranteeswhichwereclaimed.

4.16 Foreigncurrencies

Foreign currency transactions

TransactionsinforeigncurrenciesaretranslatedtoThaiBahtatthebuyingandsellingratesspecifiedbytheBank

whenthetransactionsoccur.

Monetaryassetsandliabilitiesdenominatedinforeigncurrenciesatthebalancesheetdatearetranslatedinto

ThaiBahtatthereferenceratesannouncedbytheBankofThailandatthatdate.Foreignexchangedifferencesarising

ontranslationarerecognisedinthestatementofincome.

ThefinancialstatementsofoverseasbranchesaretranslatedatthereferenceratesannouncedbytheBankof

Thailandattheperiodend.Foreignexchangedifferencesarisingontranslationarerecognisedinaseparatecomponent

ofequityuntildisposaloftheinvestments,exceptfortheCaymanIslandsBranchforwhichtheforeignexchange

differencearisingontranslationisincludedinthestatementofincome.

4.17 Derivativefinancialinstruments

Tradingderivativefinancialinstrumentsarerecognisedinitiallyatfairvalue.Subsequenttoinitialrecognition,theyare





remeasuredatfairvaluebyusingthemarketprice.Thegainorlossonremeasurementtofairvalueisrecognised

immediatelyinthestatementofincome.

Thefairvalueofderivativesisdeterminedbasedonmarketprice,ifavailable,derivedfromreliablesources.Ifmar-

ketpriceisnotavailable,thefairvalueisderivedfromusingvaluationsincorporatingthemarketdatafromreliable

sources.Themarketpriceormarketdataaremainlybasedonexchange-tradedprices,broker/dealerquotations,or

counterpartiesquotations.

FortheBank’smanagementofBankingbook,financialderivativesintheformofinterestratecontractssuchas

interestrateswapsarerecognisedonanaccrualbasis.Foreigncurrencyfundingoffinancialderivativessuchas

currency/FXswapsarerecognisedonanamortisationbasis.Thedifferencebetweentheforwardrateandthespot

rateatthecontractdateisrecognisedasincomeorexpenseusingthestraight-linemethodovertheperiodofthe

contract.

4.18 Cashandcashequivalents

Cashandcashequivalentsinthestatementsofcashflowsincludecashonhandandcashintheprocessofcollection.




184 A n n u a l R e p o r t 2 0 0 8

5 Supplementaryinformation

5.1 Interbankandmoneymarketitems(assets)

Consolidated

2008 2007

Atcall Term Total Atcall Term Total

(in million Baht)

Domestic

TheBankofThailandandFinancial

InstitutionsDevelopmentFund 3,848 55,700 59,548 4,629 - 4,629

Commercialbanks 47 585 632 778 9,336 10,114

Securitiescompanies - - - 8 690 698

Otherbanks - 5,818 5,818 1 - 1

Otherfinancialinstitutions 31 256 287 55 181 236

Total 3,926 62,359 66,285 5,471 10,207 15,678

Add Accruedinterestreceivable - 43 43 - 11 11

Less Allowancefordoubtfulaccounts - (6) (6) (1) (98) (99)

Totaldomestic 3,926 62,396 66,322 5,470 10,120 15,590

Foreign

USDollar 2,438 2,907 5,345 1,144 2,970 4,114

JapaneseYen 414 - 414 405 - 405

Othercurrencies 501 - 501 539 103 642

Total 3,353 2,907 6,260 2,088 3,073 5,161

Add AccruedinterestReceivable - 18 18 - 23 23

Less Allowancefordoubtfulaccounts - (13) (13) - (14) (14)

Totalforeign 3,353 2,912 6,265 2,088 3,082 5,170

TotaldomesticandForeign 7,279 65,308 72,587 7,558 13,202 20,760





Bankonly

2008 2007


(in million Baht)

Domestic

TheBankofThailandand Financial

InstitutionsDevelopmentFund 3,848 55,700 59,548 4,629 - 4,629

Commercialbanks 46 384 430 76 9,171 9,247

Securitiescompanies - - - 8 500 508

Otherbanks - 5,818 5,818 1 - 1

Otherfinancialinstitutions 31 256 287 55 181 236

Total 3,925 62,158 66,083 4,769 9,852 14,621

Add Accruedinterestreceivable - 42 42 - 10 10

Less Allowancefordoubtfulaccounts - (6) (6) (1) (98) (99)

Totaldomestic 3,925 62,194 66,119 4,768 9,764 14,532

Foreign

USDollar 2,438 2,907 5,345 1,144 2,970 4,114

JapaneseYen 414 - 414 405 - 405

Othercurrencies 501 - 501 539 - 539

Total 3,353 2,907 6,260 2,088 2,970 5,058

Add AccruedinterestReceivable - 18 18 - 23 23

Less Allowancefordoubtfulaccounts - (13) (13) - (14) (14)

Totalforeign 3,353 2,912 6,265 2,088 2,979 5,067

TotaldomesticandForeign 7,278 65,106 72,384 6,856 12,743 19,599

5.2 Securitiespurchasedunderresaleagreements

ConsolidatedandBankonly

2008 2007

(in million Baht)

ThebondsofGovernmentandtheFinancial

InstitutionsDevelopmentFund - 27,800

Total - 27,800




186 A n n u a l R e p o r t 2 0 0 8

5.3 Investments

Consolidated

2008 2007

Costvalue/ Market Costvalue/ Market

bookvalue value bookvalue value

(in million Baht)

Currentinvestments

Trading investments

Governmentandstateenterprisesecurities 5,003 5,010 4,399 4,400

Privatedebtinstruments - - 139 139

Domesticmarketableequitysecurities 79 53 - -

Total 5,082 5,063 4,538 4,539

Add(less)Allowanceforrevaluation (19) - 1 -

Total 5,063 5,063 4,539 4,539

Available-for-sale securities


Privatedebtinstruments 50 - 863 820

Domesticmarketableequitysecurities 165 74 1,270 1,268

Total 23,507 23,475 23,983 24,042

AddAllowanceforrevaluation 80 - 109 -

LessAllowanceforimpairment (112) - (50) -

Total 23,475 23,475 24,042 24,042

Held-to-maturity debt instruments

Governmentandstateenterprisesecurities 742 752 - -

Privatedebtinstruments 1,267 1,272 168 168

Total 2,009 2,024 168 168

Totalcurrentinvestments-net 30,547 30,562 28,749 28,749





Consolidated

2008 2007



(in million Baht)

Long-terminvestments




Foreigndebtinstrument 465 445 - -

Domesticmarketableequitysecurities 3,985 2,331 6,890 6,669

Others - - 651 666

Total 15,576 14,291 25,335 25,130

Add (less)Allowanceforrevaluation (277) - 1,148 -

LessAllowanceforimpairment (1,008) - (1,353) -

Total 14,291 14,291 25,130 25,130



Privatedebtinstruments - - 1,185 1,220

Total 34,718 35,634 37,154 36,851

General investments

Domesticnon-marketableequitysecurities 2,989 2,502 4,050 4,095

Foreignnon-marketableequitysecurities 80 108 79 20

Total 3,069 2,610 4,129 4,115


Total 1,863 2,610 2,833 4,115

Totallong-terminvestments-net 50,872 52,535 65,117 66,096




188 A n n u a l R e p o r t 2 0 0 8

Bankonly

2008 2007



(in million Baht)

Currentinvestments

Trading investments



Domesticmarketableequitysecurities 79 53 - -

Total 5,082 5,063 4,538 4,539

Add (less)Allowanceforrevaluation (19) - 1 -

Total 5,063 5,063 4,539 4,539



Privatedebtinstruments 50 - 863 820

Domesticmarketableequitysecurities 165 74 770 768

Total 23,507 23,475 23,483 23,542

AddAllowanceforrevaluation 80 - 109 -

LessAllowanceforimpairment (112) - (50) -

Total 23,475 23,475 23,542 23,542


Governmentandstateenterprisesecurities 742 752 - -

Privatedebtinstruments 1,267 1,272 168 168

Total 2,009 2,024 168 168

Totalcurrentinvestments-net 30,547 30,562 28,249 28,249





Bankonly

2008 2007



(in million Baht)

Long-terminvestments




Foreigndebtinstrument 465 445 - -

Domesticmarketableequitysecurities 3,972 2,325 6,877 6,656

Others - - 651 666

Total 15,563 14,285 25,322 25,117

Add (less) Allowanceforrevaluation (276) - 1,148 -


Total 14,285 14,285 25,117 25,117



Privatedebtinstruments - - 1,185 1,220

Total 34,044 34,960 36,441 36,138

General investments

Domesticnon-marketableequitysecurities 2,989 2,502 4,050 4,095

Foreignnon-marketableequitysecurities 80 108 79 20

Total 3,069 2,610 4,129 4,115


Total 1,863 2,610 2,833 4,115

Totallong-terminvestments-net 50,192 51,855 64,391 65,370




190 A n n u a l R e p o r t 2 0 0 8

Asat31December2008,theBankanditssubsidiaryclassifiednon-negotiablepromissorynotesavaledbythe

FinancialInstitutionsDevelopmentFund(“FIDF”)thattheBankanditssubsidiaryhadreceivedfortheloanstransferred

totheThaiAssetManagementCorporation(“TAMC”)asheld-to-maturitydebtinstrumentsofBaht9,566millioninthe

consolidatedfinancialstatementsandBaht8,891millionintheBankonlyfinancialstatements(31December2007:

Baht10,043millioninconsolidatedfinancialstatementsandBaht9,330millionintheBankonlyfinancialstatements).

(SeeNote5.26)Thenotesareduein2011to2015andbearinterestrateattheaverageinterestratesfordeposits

ofthefivelargestdomesticcommercialbanksandtheinterestispayableonthelastworkingdayofeachyear.

At31December2008and2007available-for-saleandheld-to-maturitydebtinstrumentsclassifiedbytheremaining

maturityareasfollows:

Consolidated

2008

Maturity Total

Within Over Over

1year 1-5years 5-10years

(in million Baht)


Governmentandstateenterprisesecurities 23,292 10,726 400 34,418

Privatedebtinstruments 50 - - 50

Foreigndebtinstrument 137 329 - 466

Total 23,479 11,055 400 34,934

AddAllowanceforrevaluation 111 309 57 477

Less Allowanceforimpairment (50) - - (50)

Total 23,540 11,364 457 35,361


Governmentandstateenterprisesecurities 742 31,315 3,403 35,460

Privatedebtinstruments 1,267 - - 1,267

Total 2,009 31,315 3,403 36,727

Totaldebtinstruments 25,549 42,679 3,860 72,088





Consolidated

2007

Maturity Total

Within Over Over


(in million Baht)



Privatedebtinstruments 863 840 - 1,703

Others - 651 - 651

Total 22,714 14,101 4,344 41,159

AddAllowanceforrevaluation 111 16 - 127

LessAllowanceforimpairment (50) - - (50)

Total 22,775 14,117 4,344 41,236


Governmentandstateenterprisesecurities - 27,392 8,576 35,968

Privatedebtinstruments 168 1,185 - 1,353

Total 168 28,577 8,576 37,321





192 A n n u a l R e p o r t 2 0 0 8

Bankonly

2008

Maturity Total

Within Over Over


(in million Baht)


Governmentandstateenterprisesecurities 23,292 10,726 400 34,418

Privatedebtinstruments 50 - - 50

Foreigndebtinstrument 137 329 - 466

Total 23,479 11,055 400 34,934

AddAllowanceforrevaluation 111 309 57 477

Less Allowanceforimpairment (50) - - (50)

Total 23,540 11,364 457 35,361


Governmentandstateenterprisesecurities 742 30,641 3,403 34,786

Privatedebtinstruments 1,267 - - 1,267

Total 2,009 30,641 3,403 36,053






Bankonly

2007

Maturity Total

Within Over Over


(in million Baht)



Privatedebtinstruments 863 840 - 1,703

Others - 651 - 651

Total 22,714 14,101 4,344 41,159

AddAllowanceforrevaluation 111 16 - 127

LessAllowanceforimpairment (50) - - (50)

Total 22,775 14,117 4,344 41,236


Governmentandstateenterprisesecurities - 26,698 8,558 35,256

Privatedebtinstruments 168 1,185 - 1,353

Total 168 27,883 8,558 36,609





194 A n n u a l R e p o r t 2 0 0 8

Theunrealisedgain/(loss)ontherevaluationofinvestmentsasof31December2008and2007isasfollows:

Consolidated Bankonly

2008 2007 2008 2007

(in million Baht)

Unrealised gain on revaluation of investments

Debtinstruments 509 220 509 220

Equitysecurities 78 1,877 77 1,876

Total 587 2,097 586 2,096

Unrealised loss on revaluation of investments

Debtinstruments (25) (87) (25) (87)

Equitysecurities (754) (748) (752) (747)

Total (779) (835) (777) (834)

Unrealised gain / (loss) on revaluation of

investments – net

Debtinstruments 484 133 484 133

Equitysecurities (676) 1,129 (675) 1,129

Total (192) 1,262 (191) 1,262





Gain/(loss)oninvestmentsinthestatementsofincomefortheyearsended31December2008and2007areas

follows:


2008 2007 2008 2007

(in million Baht)

Gainonsaleofsecurities

Tradinginvestments 114 147 114 147

Available-for-salesecurities 1,259 705 1,258 697

Held-to-maturitydebtinstruments 2 - 2 -

Generalinvestments 410 422 409 402

Investmentsinsubsidiaries/associates - 11 - 11

Total 1,785 1,285 1,783 1,257

Lossonsaleofsecurities

Tradinginvestments (50) (58) (50) (58)

Available-for-salesecurities (801) (20) (801) (20)

Generalinvestments (4) (73) (4) (73)

Investmentsinsubsidiaries/associates (162) (7) (10) (2)

Total (1,017) (158) (865) (153)

Lossontransferofinvestments (3) - (3) -

Gain/(loss)fromrevaluation (19) 7 (19) 7

Lossonimpairmentofsecurities (1,100) (1,965) (1,093) (5,029)

Totallossoninvestments (354) (831) (197) (3,918)

InSeptember2008,theBanksoldtheTMBMacquarieSecurities(Thailand)LimitedsharesheldbytheBankto

MacquarieInternationalHoldingsLimited,andrecordedalossonsaleofinvestmentofBaht158millioninthe

consolidatedfinancialstatementsandBaht6millionintheBank’sfinancialstatements.




196 A n n u a l R e p o r t 2 0 0 8

Investmentsofover10%ofthepaid-upsharecapital(excludinginvestmentsinsubsidiariesandassociates)areheld

inthefollowingindustries:


2008 2007

(in million Baht)

Manufacturingandcommerce 18 42

Propertydevelopmentandconstruction 46 34

Infrastructureandservice 45 140

Others 1,116 1,937

Total 1,225 2,153

Asof31December2008and2007investmentsheldbytheBankininvestmentsinlistedcompanieswhichmeetSET’s

criteriafordelisting,orcompanieswhoseabilitytocontinueasagoingconcernisuncertain,orunlistedcompanies

whosefinancialpositionandoperatingresultaresimilartothosecompanieswhichmeetSET’scriteriafordelisting

areasfollows:


2008

Costvalue/bookvalue Fairvalueof Allowancefor

ofequity equity impairment

securities securities

(in million Baht)

1.ListedcompanieswhichmeetSET’scriteriafor

delisting,andareindefaulton

debtinstruments 12 - (12)

2.Companieswhoseabilitytocontinueasagoing

concernisuncertain,orunlistedcompanieswhose

financialpositionandoperatingresultsaresimilarto

thosecompanieswhichmeetSET’scriteriafordelisting 1,379 185 (1,194)

Total 1,391 185 (1,206)






2007

Costvalue/bookvalue Fairvalueof Allowancefor

ofequity equity impairment

securities securities

(in million Baht)

1. ListedcompanieswhichmeetSET’scriteriafor

delisting,andareindefaultondebt

instruments 12 - (12)

2. Companieswhoseabilitytocontinueasagoing

concernisuncertain,orunlistedcompanieswhose

financialpositionandoperatingresultsaresimilarto

thosecompanieswhichmeetSET’scriteriafordelisting 1,445 161 (1,284)

Total 1,457 161 (1,296)

Investmentsinsubsidiaryandassociatedcompanies


2008 2007 2008 2007

(in million Baht)

At1January 2,479 2,444 2,957 4,306

Shareofnetprofitofinvestments-equitymethod 466 282 - -

Acquisitions 46 150 533 169

Dividendincome (212) (162) - -

Allowanceforimpairment - - (370) (1,250)

Disposals (215) (235) (897) (268)

At31December 2,564 2,479 2,223 2,957




198 A n n u a l R e p o r t 2 0 0 8

Investmentsinsubsidiaryandassociatedcompaniesat31December2008and2007areasfollows:

Typeof Typeof

business sharecapital

Subsidiarycompanies

PhayathaiAssetManagementCo.,Ltd. Financial Ordinaryshares

IFCTAdvisoryCo.,Ltd.(seenote1) Financial Ordinaryshares

DesigneeforETAContractLtd. Designee Ordinaryshares

TMBAssetManagementCo.,Ltd. Assetmanagement Ordinaryshares

TMBMacquarieSecurities(Thailand)Ltd.(seenote1) Securities Ordinaryshares

Associatedcompanies

SiamResortFund Type4propertyfund Unittrust

ThaiORIXLeasingCo.,Ltd. Leasing Ordinaryshares

TheThaiBusinessFundII Type4propertyfund Unittrust

TheColumnPropertyFund Type4propertyfund Unittrust

PhayathaiPropertyFund Type2propertyfund Unittrust





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the

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2008

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(%)

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Asso

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und

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200 A n n u a l R e p o r t 2 0 0 8

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Asso

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202 A n n u a l R e p o r t 2 0 0 8

Thefollowingsummarisedfinancialinformationonassociatedcompanieswhichhavebeenaccountedforusingthe

equitymethodisnotadjustedforthepercentageofownershipheldbytheGroup:

Ownership Total Total Total Net

interest assets liabilities revenues profit

(%) (in million Baht)

2008

SiamResortFund 56.26 1,777 4 539 534

ThaiORIXLeasingCo.,Ltd. 45.96 4,678 3,620 413 145

TheThaiBusinessFundII 32.00 1,478 706 472 309

PhayathaiPropertyFund 30.00 673 10 63 45

TheColumnPropertyFund 29.90 2,189 46 119 23

Total 10,795 4,386 1,606 1,056

2007

SiamResortFund 59.62 1,406 5 181 177

ThaiORIXLeasingCo.,Ltd. 45.96 4,870 3,872 449 170

TheThaiBusinessFundII 32.00 1,633 614 450 287

TheColumnPropertyFund 31.51 2,141 45 104 45

PhayathaiPropertyFund 30.00 671 9 58 37

Total 10,721 4,545 1,242 716





ThefollowingareextractsofthefinancialstatementsofPhayathaiAssetManagementCompanyLimitedwhichisa

subsidiarycompany,asrequiredbyBankofThailandguidelines:

PhayathaiAssetManagementCompanyLimited

Condensedbalancesheets

Asat31December2008and2007

2008 2007

(in Baht)

Assets

Cashanddepositsatfinancialinstitutions 250,763,223 138,431,383

Investmentsinsecurities-net 680,242,286 1,226,165,961

Investmentsinreceivables-net 910,974,144 1,225,558,115

Totalinvestments-net 1,591,216,430 2,451,724,076

Loansandreceivablesandaccruedinterestreceivable-net 1,254,536,723 1,662,009,094

Propertiesforeclosed-net 2,442,204,452 3,086,003,308

Equipment-net 1,296,965 1,816,989

Otherreceivables 231,737,434 110,361,660

Otherassets 18,253,335 21,924,527

Totalassets 5,790,008,562 7,472,271,037

Liabilitiesanddeficitinshareholders’equity

Liabilities

Borrowingsfromfinancialinstitutions 2,600,000,000 4,800,000,000

Promissorynotespayable 1,010,622,012 1,010,622,012

Accountspayablefromnon-performingloanstransferred - 982

Otherpayables 10,222,375 58,588,968

Accruedinterestpayable 83,257,806 67,153,906

Provisionsofobligationsfromthetransferred

non-performingassets 3,429,543,380 3,234,172,101

Otherprovisions 16,110,000 -

Otherliabilities 32,452,441 86,485,356

Totalliabilities 7,182,208,014 9,257,023,325

Deficitinshareholders’equity (1,392,199,452) (1,784,752,288)

Totalliabilitiesanddeficitinshareholders’equity 5,790,008,562 7,472,271,037




204 A n n u a l R e p o r t 2 0 0 8


Condensedstatementsofincome

Fortheyearsended31December2008and2007

2008 2007

(in Baht)

Interest income

Loananddeposits 135,272,770 239,809,719

Investmentsinreceivables 185,356,662 271,753,444

Investmentsinsecurities 11,422,329 14,512,540

Totalinterestincome 332,051,761 526,075,703

Interest expense

Interestexpense 238,292,941 80,346,791

Totalinterestexpense 238,292,941 80,346,791

Netinterestincome 93,758,820 445,728,912

Baddebtsanddoubtfulaccounts(reversal) (79,507,884) (177,969,027)

Lossonimpairmentofinvestmentsinreceivables 64,861,406 141,081,976

Lossondebtrestructuring 20,524,947 21,773,012

Netinterestincomeafterbaddebts,

doubtfulaccounts,lossonimpairmentofinvestments

inreceivablesandlossondebtrestructuring 87,880,351 460,842,951

Non-interestincome 59,260,705 301,173,706

Non-interest expenses

Lossonprovisionsofobligationfromthetransferred

non-performingassets 9,371,280 3,204,279,341

Lossonotherprovisions 16,110,000 -

Otherexpenses 98,548,341 617,371,356

Totalnon-interestexpenses 124,029,621 3,821,650,697

Netprofit/(loss) 23,111,435 (3,059,634,040)






Statementsofcashflows


2008 2007

(in Baht)

Cash flows from operating activities

Netprofit/(loss) 23,111,435 (3,059,634,040)

Adjustments to reconcile net profit / (loss) to net cash

provided by / (used in) operating activities

Depreciationandamortization 1,099,812 1,580,617

Lossonimpairmentinvalueofsecurities 6,935,070 -

Lossonimpairmentofinvestmentsinreceivables 64,861,406 141,081,976

Lossonimpairmentofpropertiesforeclosedandotherassets 19,592,917 515,480,224

Baddebtsanddoubtfulaccounts(reversal) (79,507,884) (177,969,027)

Lossondebtrestructuring 20,524,948 21,773,012

Loss/(gain)onsaleofequipment 5,020 (11,108)

Gainonsaleofinvestments (1,628,297) (27,609,524)

Lossonprovisionsofobligationfromthetransferred

non-performingassets 9,371,280 3,204,279,341

Lossonotherprovisions 16,110,000 -

Increase/(decrease)inotheraccruedexpenses 846,802 (10,458)

Netinterestincome (93,758,821) (445,728,912)

Incometaxexpense 181,062 307,940

Interestreceived 324,842,261 438,732,779

Interestpaid (36,189,041) (60,273,973)

Incometaxpaid (181,062) (307,940)

Netprofitfromoperationsbeforechangesinoperating

assetsandliabilities 276,216,908 551,690,907




206 A n n u a l R e p o r t 2 0 0 8


Statementsofcashflows


2008 2007

(in Baht)

(Increase) / decrease in operating assets

Investmentsinreceivables (23,439,214) 212,454,020

Loansandreceivables 398,833,325 570,762,579

Propertiesforeclosed 723,818,223 1,088,431,419

Otheraccountsreceivable 128,959,701 149,417,678

Otherassets 1,219,694 (2,425,075)

Increase / (decrease) in operating liabilities

Otheraccountpayables (48,366,593) 35,610,501

Otherliabilities (54,880,700) (212,382,106)

Netcashprovidedbyoperatingactivities 1,402,361,344 2,393,559,923

Cash flows from investing activities

Purchasesofavailable-for-saleinvestments - (2,423,000,000)

Salesofavailable-for-saleinvestments 501,174,143 2,180,124,930

Redemptionsofheld-to-maturityinvestments 38,430,007 38,000,000

Salesofgeneralinvestments 454,155 339,492

Purchasesofequipment (104,632) (871,137)

Salesofequipment 16,823 11,600

Purchasesofintangibleassets - (37,500)

Netcashprovidedby/(usedin)investingactivities 539,970,496 (205,432,615)

Cash flows from financing activities

Increaseinissuedandfullypaid-up-ordinaryshares 370,000,000 -

Paymentsofloansfromfinancialinstitutions (2,200,000,000) (2,200,000,000)

Netcashusedinfinancingactivities (1,830,000,000) (2,200,000,000)

Netincrease/(decrease)incashandcashequivalents 112,331,840 (11,872,692)

Cashandcashequivalentsatbeginningofyear 138,431,383 150,304,075

Cashandcashequivalentsatendofyear 250,763,223 138,431,383





5.4 Loansandaccruedinterestreceivable

Classified by types of loans


2008 2007 2008 2007

(in million Baht)

Overdrafts 38,880 41,398 38,755 41,268

Loans 268,453 301,213 267,597 301,815

Bills 116,576 121,421 117,504 122,340

Others 377 863 349 652

Total 424,286 464,895 424,205 466,075

AddAccruedinterestreceivable 3,296 4,026 3,378 4,092

LessAllowancefordoubtfulaccounts (45,463) (51,486) (43,932) (49,930)

Revaluationallowance

fordebtrestructuring (453) (628) (453) (628)

Total 381,666 416,807 383,198 419,609

Classified by remaining period to maturity of contracts


2008 2007 2008 2007

(in million Baht)

Within1year 178,944 179,315 175,719 175,223

Over1year 245,342 285,580 248,486 290,852

Total 424,286 464,895 424,205 466,075




208 A n n u a l R e p o r t 2 0 0 8

Classified by currencies and residence of debtors

Consolidated

2008 2007

Domestic Overseas Total Domestic Overseas Total

(in million Baht)

Baht 410,019 3,773 413,792 450,644 2,371 453,015

USDollar 8,679 256 8,935 9,996 282 10,278

Othercurrencies 344 1,215 1,559 548 1,054 1,602

Total 419,042 5,244 424,286 461,188 3,707 464,895

Bankonly

2008 2007


(in million Baht)

Baht 409,938 3,773 413,711 451,824 2,371 454,195

USDollar 8,679 256 8,935 9,996 282 10,278

Othercurrencies 344 1,215 1,559 548 1,054 1,602

Total 418,961 5,244 424,205 462,368 3,707 466,075





Classified by type of business and by loan classification

Consolidated

2008

Pass Special Sub-standard Doubtful Doubtful Total

mention ofloss

(in million Baht)

Agricultureandmining 6,135 1,416 301 541 4,950 13,343

Manufacturingand

commerce 121,071 30,259 5,477 4,101 32,561 193,469

Propertydevelopment

andconstruction 26,922 4,981 1,219 1,064 5,178 39,364

Infrastructureandservices 59,787 12,373 1,089 722 4,936 78,907

Housingloans 50,245 2,447 713 808 3,821 58,034

Others 36,885 1,988 271 235 1,790 41,169

Total 301,045 53,464 9,070 7,471 53,236 424,286

Consolidated

2007


mention ofloss

(in million Baht)


Manufacturingand

commerce 144,585 18,801 8,548 11,779 27,152 210,865

Propertydevelopment


Infrastructureandservices 77,137 5,835 1,439 1,388 4,588 90,387

Housingloans 51,446 1,246 644 672 3,620 57,628

Others 40,285 1,908 400 404 1,850 44,847

Total 356,093 32,098 13,422 16,594 46,496 464,703

TMBMacquarieSecurities(Thailand)Ltd. 192

Total 464,895




210 A n n u a l R e p o r t 2 0 0 8

Bankonly

2008


mention ofloss

(in million Baht)


Manufacturingand

commerce 121,071 30,259 5,477 4,101 31,013 191,921

Propertydevelopment


Infrastructureandservices 59,787 12,373 1,089 722 4,525 78,496

Housingloans 50,245 2,447 713 808 3,821 58,034

Others 40,500 1,988 271 235 1,241 44,235

Total 304,659 53,464 9,070 7,471 49,541 424,205

Bankonly

2007


mention ofloss

(in million Baht)


Manufacturingand

commerce 144,502 18,735 8,471 11,779 25,537 209,024

Propertydevelopment


Infrastructureandservices 77,114 5,825 1,420 1,388 4,179 89,926

Housingloans 51,446 1,246 644 672 3,620 57,628

Others 46,069 1,886 372 404 1,242 49,973

Total 361,677 31,983 13,249 16,583 42,583 466,075





Classified by loan classification

Asat31December2008and2007theBankanditssubsidiarieshaveclassifiedloansandaccruedinterestreceivable

(excludingloanstobanksandmoneymarketitems)inaccordancewiththeannouncementoftheBankofThailand,

regardingworthlessandirrecoverableassetsanddoubtfulassetsthatmaybeworthlessorirrecoverableofcom-

mercialbanks,asfollows:

Consolidated

2008

Loansand Totaldebtnet Allowance Allowance

accruedinterest ofcollateral* amount

receivables

(in million Baht) (%) (in million Baht) Pass

303,282 113,579 1 1,172

Specialmention 53,729 18,893 2 378

Sub-standard 9,229 4,001 100 4,001

Doubtful 7,505 2,490 100 2,490

Doubtfulofloss 53,836 29,378 100 29,378

Total 427,581 168,341 37,419

AddExcessoverBankofThailandminimumrequirement 8,044

Total 45,463

*Inthecaseofallowanceforsub-standard,doubtfulanddoubtfulofloss,totaldebtnetofcollateralmeanstotal

debtafterdeductionofthepresentvalueoffuturecashflowsexpectedtobereceivedfromdebtrepayment,orthe

expectedproceedsfromthedisposalofcollateral.




212 A n n u a l R e p o r t 2 0 0 8

Consolidated

2008



receivables

(in million Baht) (%) (in million Baht)

Pass 358,391 133,228 1 1,390


Sub-standard 13,636 7,049 100 7,049

Doubtful 16,766 8,165 100 8,165

Doubtfulofloss 47,645 22,587 100 22,587

Total 468,729 181,652 39,404

AddExcessoverBankofThailandminimumrequirement 12,082

Loansof

TMBMacquarieSecurities

(Thailand)Ltd. 192 -

Total 468,921 51,486








At31December2008and2007theBankhasclassifiedloansandaccruedinterestreceivable(excludingloansto

banksandmoneymarketitems)inaccordancewiththeannouncementoftheBankofThailand,regardingworth-

lessandirrecoverableassetsanddoubtfulassetsthatmaybeworthlessorirrecoverableofcommercialbanksas

follows:

Bankonly

2008



receivables


Pass 306,980 117,194 1 1,172


Sub-standard 9,229 4,001 100 4,001

Doubtful 7,505 2,490 100 2,490

Doubtfulofloss 50,141 28,070 100 28,070

Total 427,584 170,648 36,111

AddExcessovertheBankofThailandminimumrequirement 7,821

Total 43,932







214 A n n u a l R e p o r t 2 0 0 8

Bankonly

2008



receivables


Pass 364,042 139,039 1 1,390


Sub-standard 13,463 7,011 100 7,011

Doubtful 16,755 8,165 100 8,165

Doubtfulofloss 43,732 21,262 100 21,262

Total 470,168 186,098 38,041

AddExcessovertheBankofThailandminimumrequirement 11,889

Total 49,930




Asat31December2008and2007theBankanditssubsidiarieshaveunearneddiscountsasfollows:


2008 2007

(in million Baht)

Unearneddiscounts 22 33





Non-performingloans(NPLs)

NPLsperBOT’sregulationsreferstoallsub-standard,doubtful,doubtfuloflossandlossloans.

AccordingtotheBankofThailand’sregulations,commercialbanksarerequiredtoreportinformationonnon-per-

formingloans:

-Non-performingloans(net)whichreferstothenon-performingloansvalueafterallowancesfordoubtfulaccounts

ofNPLs.

-TheratiooftotalloansafterallowancesfordoubtfulaccountswhichmeanstheratioofNPLs(net)tototalloans

afterallowancesfordoubtfulaccountsofNPLs.

Asat31December2008and2007theBankanditssubsidiaries’non-performingloans(net)(includinginter-bank

andmoneymarketitems)basedontheabovedirectivecanbesummarisedasfollows:


2008 2007 2008 2007

(in million Baht)

Non-performingloans(net) 34,042 38,965 31,654 36,231

Totalloans–net 452,059 438,905 453,286 441,155

PercentageofNPLs(net) 7.53 8.88 6.98 8.21

Asat31December2008and2007theBankanditssubsidiariesnon-performingloans(gross)(includinginter-bank

andmoneymarketitems)basedontheabovedirectivecanbesummarisedasfollows:


2008 2007 2008 2007

(in million Baht)

Non-performingloans(gross) 69,777 76,512 66,082 72,415

Totalloans 487,794 476,453 487,713 477,339

PercentageofNPLs(gross) 14.30 16.06 13.55 15.17




216 A n n u a l R e p o r t 2 0 0 8

Troubleddebtrestructuring

Fortheyearsended31December2008and2007,theBankanditssubsidiariesenteredintocontractsfortroubled

debtrestructuringwhichresultedinlossinthefollowingcases:

Consolidated

2008

Typeof Beforerestructuring Afterrestructuring Assetacquired Lossondebt

restructuring atendofyear restructuring

Numberof Amount Numberof Amount Type Fairvalue

receivables receivables

(in million Baht) (in million Baht) (in million Baht) Modifica-

tion

ofterms 99 4,898 42 3,711 - - 608

Various Landand

restructuring 14 1,349 3 39building 879 30

Total 113 6,247 45 3,750 879 638

TheBankanditssubsidiariesmeasuretheexpectedrecoverableamountsofloansrestructuredbychangingrepay-

mentconditionsbyusingthepresentvalueoffuturecashflowsdiscountedbythemarketrate.

Consolidated

2008

BeforerestructuringAfterrestructuringatendofyear

Termofdebtrestructuringagreements Numberof Amount Numberof Amount


(in million Baht) (in million Baht)

Notover5years 74 2,109 22 531

Over5-10years 26 1,447 15 667

Over10years 13 2,691 8 2,552

Total 113 6,247 45 3,750

Fortheyearended31December2008,theBankanditssubsidiariesrecognisedinterestincomeofBaht466million.

Asat31December2008,theBankanditssubsidiarieshave597troubleddebtrestructuringreceivableswithatotal

carryingamountofBaht7,913million.





Consolidated

2007





(in million Baht) (in million Baht) (in million Baht)

Transferofassets 2 5 1 2 - - 2

Modification

ofterms 210 4,319 75 3,161 - - 1,139

Various Landand

restructuring 39 2,016 12 1,472 building 126 164

Total 251 6,340 88 4,635 126 1,305

Consolidated

2007





Notover5years 200 3,203 58 1,797

Over10years 19 3,052 14 2,806

Over10years 30 80 15 30

Total 249 6,335 87 4,633

Fortheyearended31December2007,theBankanditssubsidiariesrecognisedinterestincomeofBaht343million.

Asat31December2007,theBankanditssubsidiarieshave215troubleddebtrestructuringreceivableswithatotal

carryingamountofBaht11,224million.




218 A n n u a l R e p o r t 2 0 0 8

Fortheyearsended31December2008and2007,theBankanditssubsidiariesenteredintocontractsfortroubled

debtrestructuringwhichresultedinlossinthefollowingcases:

Bankonly

2008





(in million Baht) (in million Baht) (in million Baht) Modifica-

tion

ofterms 99 4,898 42 3,711 - - 608

Various Landand

restructuring 3 1,264 - -building 879 9

Total 102 6,162 42 3,711 879 617

Bankonly

2008





Notover5years 63 2,024 19 492

Over5-10years 26 1,447 15 667

Over10years 13 2,691 8 2,552

Total 102 6,162 42 3,711

Fortheyearended31December2008,theBankreceivedinterestincomerecognisedonrestructuredloansofBaht

451million.

Asat31December2008,theBankhas553troubleddebtrestructuringreceivableswithatotalcarryingamountof

Baht7,709million.





Bankonly

2007



Numberof Amount Numberof Amount Type Fair

receivables receivables value

(in million Baht) (in million Baht) (in million Baht)

Modification

ofterms 210 4,319 75 3,161 - - 1,139

Various Landand

restructuring 20 1,806 4 1,406building 123 144

Total 230 6,125 79 4,567 123 1,283

Bankonly

2007





Notover5years 181 2,993 50 1,731

Over5-10years 19 3,052 14 2,806

Over10years 30 80 15 30

Total 230 6,125 79 4,567

Fortheyearended31December2007,theBankreceivedinterestincomerecognisedonrestructuredloansofBaht

330million.

Asat31December2007,theBankhas157troubleddebtrestructuringreceivableswithatotalcarryingamountof

Baht10,965million.




220 A n n u a l R e p o r t 2 0 0 8

5.5 Classifiedassets

Classifiedassets,whichconsistofinvestmentinsecurities,loansandaccruedinterestreceivable(includingloans

tobanksandmoneymarketitems),propertiesforeclosed,premisesandequipmentandotherassets,asat31De-

cember2008and2007,wereclassifiedinaccordancewiththeregulationoftheBankofThailandasfollows:

Consolidated

2008

Typeofassets

Investments Loansand Properties Premises Otherassets Total

insecurities accrued foreclosed and

interest equipment

receivables

(in million Baht)

Pass - 366,850 - - - 366,850

Specialmention - 53,729 - - - 53,729

Sub-standard - 9,229 - - - 9,229

Doubtful - 7,505 - - - 7,505

Doubtfulofloss 3,134 53,836 4,319 736 520 62,545

Total 3,134 491,149 4,319 736 520 499,858

Consolidated

2007

Typeofassets



interest equipment

receivables

(in million Baht)

Pass - 369,642 - - - 369,642

Specialmention - 32,326 - - - 32,326

Sub-standard - 13,636 - - - 13,636

Doubtful - 16,766 - - - 16,766

Doubtfulofloss 3,536 47,645 4,469 675 531 56,856

3,0536 480,015 4,469 675 531 489,226

Loansof

TMBMacquarieSecurities

(Thailand)Ltd. - 192 - - - 192

Total 3,536 480,207 4,469 675 531 489,418





Bankonly

2008

Typeofassets



interest equipment

receivables

(in million Baht)

Pass - 370,548 - - - 370,548

Specialmention - 53,729 - - - 53,729

Sub-standard - 9,229 - - - 9,229

Doubtful - 7,505 - - - 7,505

Doubtfulofloss 6,997 50,141 3,913 736 511 62,298

Total 6,997 491,152 3,913 736 511 503,309

Bankonly

2008

Typeofassets



interest equipment

receivables

(in million Baht)

Pass - 375,294 - - - 375,294

Specialmention - 32,211 - - - 32,211

Sub-standard - 13,463 - - - 13,463

Doubtful - 16,755 - - - 16,755

Doubtfulofloss 7,035 43,732 3,980 675 521 55,943

Total 7,035 481,455 3,980 675 521 493,666




222 A n n u a l R e p o r t 2 0 0 8

5.6 Allowancefordoubtfulaccounts

Movementsintheallowancefordoubtfulaccounts(seealsoNote5.4)fortheyears31December2008and2007

areasfollows:

Consolidated

2008

Pass Special Sub-standard Doubtful Doubtful Allowance Total

mention ofloss fordoubtful

accountsin

excessof

theBOT

minimum

requirement

(in million Baht)

Balanceatbeginning

oftheyear 1,390 213 7,049 8,165 22,587 12,082 51,486

Provisionduring

theyear (218) 165 (3,048) (5,675) 18,074 (4,038) 5,260

Baddebtsrecovered - - - - 167 - 167

Baddebtswrittenoff - - - - (4,563) - (4,563)

Allowancefor

loanssold - - - - (6,887) - (6,887)

Balanceatend

ofyear 1,172 378 4,001 2,490 29,378 8,044 45,463





Consolidated

2007



accountsin

excessof

theBOT

minimum

requirement

(in million Baht)

Balanceatbeginning

oftheyear 2,422 200 1,622 3,499 19,647 2,718 30,108

Provisionduring

theyear (1,031) 13 5,427 4,666 13,240 9,364 31,679


Baddebtswrittenoffี - - - - (2,947) - (2,947)

Allowancefor

loanssold - - - - (8,051) - (8,051)

Others (1) - - - 1 - -

Balanceatend

ofyear 1,390 213 7,049 8,165 22,587 12,082 51,486




224 A n n u a l R e p o r t 2 0 0 8

Bankonly

2008



accountsin

excessof

theBOT

minimum

requirement

(in million Baht)

Balanceatbeginning

oftheyear 1,390 213 7,011 8,165 21,262 11,889 49,930

Provisionduring

theyear (218) 165 (3,010) (5,675) 18,091 (4,068) 5,285



Allowancefor

loanssold - - - - (6,887) - (6,887)

Balanceatend

ofyear 1,172 378 4,001 2,490 28,070 7,821 43,932

Bankonly

2007



accountsin

excessof

theBOT

minimum

requirement

(in million Baht)

Balanceatbeginning

oftheyear 2,422 200 1,557 3,482 18,269 2,586 28,516

Provisionduring

theyear (1,031) 13 5,454 4,683 13,293 9,303 31,715







Allowancefor

loanssold - - - - (8,051) - (8,051)

Others (1) - - - 1 - -

Balanceatend

ofyear 1,390 213 7,011 8,165 21,262 11,889 49,930

5.7 Revaluationallowancefordebtrestructuring


2008 2007

(in million Baht)

Balanceatbeginningoftheyear 628 1,520

Decreaseduringtheyear (175) (892)

Balanceatendoftheyear 453 628

5.8 Propertiesforeclosed

Consolidated

2008

Beginningbalance Increase DisposalEndingbalance

(in million Baht)

Typeofpropertiesforeclosed

Assetsfromsettlement

Immovableassets 26,239 2,421 (5,741) 22,919

Movableassets 199 175 (63) 311

Others 587 14 (252) 349

Total 27,025 2,610 (6,056) 23,579

Add(less)Allowanceforimpairment (4,469) (990) 1,140 (4,319)

Propertiesforeclosed–net 22,556 1,620 (4,916) 19,260




226 A n n u a l R e p o r t 2 0 0 8

Consolidated

2007


(in million Baht)





Others 822 51 (286) 587

Total 30,685 5,757 (9,417) 27,025

Add(less)Allowanceforimpairment (873) (3,834) 238 (4,469)

Propertiesforeclosed-net 29,812 1,923 (9,179) 22,556

Bankonly

2008


(in million Baht)





Others 587 14 (252) 349

Total 23,450 2,516 (5,235) 20,731

Add(less)Allowanceforimpairment (3,980) (974) 1,041 (3,913)


Bankonly

2007


(in million Baht)





Others 728 51 (192) 587

Total 26,853 4,572 (7,975) 23,450

Add(less)Allowanceforimpairment (777) (3,387) 184 (3,980)






On9October2006,theBankenteredintoanagreementwithBangkokCommercialAssetManagementCo.,Ltd.

(“BAM”)forthetransferofnon-performingassets(NPA).Thetransferpricewouldbeproratedbytheappraisedvalue

ofeachpropertyvariedbytheliquidityconditionoftheasset.ThisisincompliancewiththeBankofThailandDirec-

tive,Re:“RequirementsandOperationProceduresforAssetManagementCompanies”dated27November2000,

andtheRoyalDecreeonAssetManagementCompanies,B.E.2541.TheBankisrequiredtocompletetheclas-

sificationofNPAwithin120daysfromtheagreement-signingdate.BAMwillexaminetheassetsbeforeconfirming

totheBankthepurchasepriceonindividualassetswithin30daysfromthedateofassetclassificationmadebythe

Bank.TheBankandBAMwillenterintoasaleandpurchaseagreementwithin30daysfromthesigningdateofthe

NPAtransferagreement.PaymentforNPAwillbeintheformofnon-interestbearingpromissorynotes.Thetermof

thepromissorynoteswilldependupontheliquidityoftheNPAtransferred.

Fortheyearsended31December2008and2007,theBankenteredintosaleandpurchaseagreementswithBAM

(transferee)tosellNPAtotalingBaht266millionandBaht1,482million,respectivelyatnetbookvalue(netofal-

lowanceforimpairment)withrelatedgainofBaht0.11millionandrelatedlossofBaht331million,respectively.The

BankreceivedpromissorynotesavalbytheFinancialInstitutionsDevelopmentFundofBaht266millionandBaht

1,151million,respectivelywhichmaturein2009-2016.Uponreceipt,theBankrecognisedpresentvaluelosseson

thesenotesofBaht33millionandBaht160million,respectively,whichhavebeenrecordedinotherexpenses.




228 A n n u a l R e p o r t 2 0 0 8

5.9 Premisesandequipment

Changesinpremisesandequipment(includingrevaluedincrementalcost)foryearended31December2008are

summarisedasfollows:

Consolidated

2008

Land Buildings Equipment Installation Total

cost Revalued cost Revalued work

incremental incremental

cost cost

(in million Baht)

BookvalueAtbeginningofyear 4,516 1,869 2,484 1,381 2,815 2 13,067

Changesincostduringtheyear

Atbeginningofyear 5,104 1,869 4,971 1,835 8,747 2 22,528

Surplusonrevaluation - 1,246 - 1,675 - - 2,921

Purchased/transferin 7 - 39 - 469 2 517

Disposal/transfer (30) - (96) (1) (1,717) (4) (1,848)

Atendofyear 5,081 3,115 4,914 3,509 7,499 - 24,118

Changes in accumulated depreciation during the year

Atbeginningofyear - - 2,401 454 5,932 - 8,787

Accumulateddepreciationon

revaluationsurplus - - - 820 - - 820

Depreciation - - 111 61 845 - 1,017

Disposal/transfer - - (34) - (1,596) - (1,630)

Atendofyear - - 2,478 1,335 5,181 - 8,994

Less Allowanceforimpairment (627) - (109) - - - (736)

Bookvalueatendofyear 4,454 3,115 2,327 2,174 2,318 - 14,388

Depreciationfortheyearended31December2008intheamountofBaht1,017millionwasincludedinpremises

andequipmentexpenses.

Asat31December2008,premisesandequipmentwithacostofBaht5,983millionwerefullydepreciated,butstill

inuse.





Changesinpremisesandequipment(includingrevaluedincrementalcost)fortheyearended31December2007

aresummarisedasfollows:

Consolidated

2007


Cost Revalued Cost Revalued work


cost cost

(in million Baht)




Purchased/transferin 39 - 287 - 1,313 32 1,671

Disposal/transfer (68) - (78) (9) (977) (61) (1,193)

Atendofyear 5,104 1,869 4,971 1,835 8,747 2 22,528



Depreciation - - 154 49 892 - 1,095

Disposal/transfer - - (23) (2) (943) - (968)

Atendofyear - - 2,401 454 5,932 - 8,787


Bookvalueatendofyear 4,516 1,869 2,484 1,381 2,815 2 13,067




inuse.




230 A n n u a l R e p o r t 2 0 0 8



Bankonly

2008




cost cost

(in million Baht)

BookvalueAtbeginningofyear 4,516 1,869 2,484 1,381 2,692 - 12,942


Atbeginningofyear 5,104 1,869 4,971 1,835 8,439 - 22,218

Surplusonrevaluation - 1,246 - 1,675 - - 2,921

Purchased/transferin 7 - 39 - 448 - 494

Disposal/transfer (30) - (96) (1) (1,596) - (1,723)

Atendofyear 5,081 3,115 4,914 3,509 7,291 - 23,910



Accumulateddepreciation

onrevaluationsurplus - - - 820 - - 820

Depreciation - - 111 61 807 - 979

Disposal/transfer - - (34) - (1,509) - (1,543)

Atendofyear - - 2,478 1,335 5,045 - 8,858



Depreciationfortheyearended31December2008intheamountofBaht979millionwasincludedinpremisesand

equipmentexpenses.


inuse.







Bankonly

2007




cost cost

(in million Baht)




Purchased/transferin 39 - 287 - 1,298 29 1,653

Disposal/transfer (68) - (78) (9) (933) (54) (1,142)

Atendofyear 5,104 1,869 4,971 1,835 8,439 - 22,218



Depreciation - - 154 49 846 - 1,049

Disposal/transfer - - (23) (2) (897) - (922)

Atendofyear - - 2,401 454 5,747 - 8,602






inuse.




232 A n n u a l R e p o r t 2 0 0 8

5.10 Deposits


2008 2007 2008 2007

(in million Baht)

Classified by type of deposit

Current 21,987 19,799 21,999 19,808

Savings 152,285 174,156 152,536 174,286

Term

-Within6months 151,725 128,805 151,725 128,817

-6monthsto1year 33,301 24,404 33,301 24,419

-Over1year 90,999 118,295 90,999 118,295

Certificatesofdeposit - 3 - 3

Total 450,297 465,462 450,560 465,628

Classified by remaining period to maturity of contracts

Within1year 419,432 443,150 419,695 443,316

Over1year 30,865 22,312 30,865 22,312

Total 450,297 465,462 450,560 465,628

Classifiedbycurrencyandresidenceofdepositors

Consolidated

2008 2007


(in million Baht)

Baht 447,188 2,549 449,737 463,015 1,993 465,008

USDollar 237 117 354 295 121 416

Othercurrencies 176 30 206 26 12 38

Total 447,601 2,696 450,297 463,336 2,126 465,462

Bankonly

2008 2007


(in million Baht)

Baht 447,445 2,549 449,994 463,181 1,993 465,174

USDollar 243 117 360 295 121 416

Othercurrencies 176 30 206 26 12 38

Total 447,864 2,696 450,560 463,502 2,126 465,628





5.11 Interbankandmoneymarketitems(liabilities)

Consolidated

2008 2007


(in million Baht)

Domestic

TheBankofThailandand

FinancialInstitutions

DevelopmentFund - 4,035 4,035 - 12,821 12,821

Commercialbanks 138 - 138 1,801 41 1,842

Otherbanks 58 17 75 50 4,917 4,967

Finance,securities

andcreditfonciercompanies 150 4 154 164 422 586

Otherfinancialinstitutions 2,547 424 2,971 2,741 703 3,444

Totaldomestic 2,893 4,480 7,373 4,756 18,904 23,660

Foreign

USDollar 465 175 640 94 - 94

Othercurrencies 589 697 1,286 361 878 1,239

Totalforeign 1,054 872 1,926 455 878 1,333

Totaldomesticandforeign 3,947 5,352 9,299 5,211 19,782 24,993




234 A n n u a l R e p o r t 2 0 0 8

Bankonly

2008 2007


(in million Baht)

Domestic

TheBankofThailandand

FinancialInstitutions

DevelopmentFund - 4,035 4,035 - 12,821 12,821

Commercialbanks 138 - 138 1,801 41 1,842

Otherbanks 58 17 75 50 4,917 4,967

Finance,securitiesand

creditfonciercompanies 150 4 154 519 303 822

Otherfinancialinstitutions 2,547 424 2,971 2,741 703 3,444

Totaldomestic 2,893 4,480 7,373 5,111 18,785 23,896

Foreign

USDollar 465 175 640 94 - 94

Othercurrencies 589 697 1,286 361 730 1,091

Totalforeign 1,054 872 1,926 455 730 1,185

Totaldomesticandforeign 3,947 5,352 9,299 5,566 19,515 25,081





5.12 Securitiessoldunderrepurchaseagreements


2008 2007

(in million Baht)

ThebondsofgovernmentandtheFinancial

InstitutionsDevelopmentFund - 4,765

Total - 4,765

5.13 Borrowings

Classified by type of instrument and source of borrowing

Consolidated

2008 2007

Domestic Foreign Total Domestic Foreign Total

(in million Baht)

Subordinateddebentures 12,624 - 12,624 13,591 - 13,591

Hybriddebentures 250 - 250 250 - 250

PerpetualNon-Cumulative

Tier1Securities - 6,989 6,989 - 6,750 6,750

Debentures

-Within270days 10,218 - 10,218 5,912 - 5,912

-Others 2,743 - 2,743 2,845 - 2,845

Billsofexchange 24,715 - 24,715 14,027 - 14,027

Fixed-ratenotepayables 518 - 518 1,843 - 1,843

Others 731 7,529 8,260 1,159 7,039 8,198

Total 51,799 14,518 66,317 39,627 13,789 53,416




236 A n n u a l R e p o r t 2 0 0 8

Bankonly

2008 2007

Domestic Foreign Total Domestic Foreign Total

(in million Baht)

Subordinateddebentures 12,624 - 12,624 13,591 - 13,591

Hybriddebentures 250 - 250 250 - 250

PerpetualNon-Cumulative

Tier1Securities - 6,989 6,989 - 6,750 6,750

Debentures

-Within270days 10,218 - 10,218 5,912 - 5,912

-Others 2,743 - 2,743 2,845 - 2,845

Billsofexchange 24,740 - 24,740 14,027 - 14,027

Fixed-ratenotepayables 518 - 518 1,843 - 1,843

Others 731 7,529 8,260 958 7,039 7,997

Total 51,824 14,518 66,342 39,426 13,789 53,215





Classified by type of instrument and maturity

Type Interestrate Maturities ConsolidatedBankonly

(%) 2008 2008

(in million Baht)

Subordinateddebentures 3.50-5.25 2009-2015 12,624 12,624

Hybriddebentures 5.75 2013 250 250

PerpetualNon-CumulativeTier1Securities 7.75 2016 6,989 6,989

Debentures

-Within270days 3.60-4.05 2009 10,218 10,218

-Others 4.00-10.25 2009-2010 2,743 2,743

Billsofexchange 2.00-5.50 2009-2011 24,715 24,740

Fixed-ratenotepayables 3.00-3.50 2009 518 518

Others 0-5.02 2010-2031 8,260 8,260

Total 66,317 66,342

Type Interestrate Maturities ConsolidatedBankonly

(%) 2007 2007

(in million Baht)

Subordinateddebentures 3.50-18.02 2009-2015 13,591 13,591

Hybriddebentures 4.625 2013 250 250

PerpetualNon-CumulativeTier1Securities 7.75 2016 6,750 6,750

Debentures

-Within270days 3.15-3.40 2008 5,912 5,912

-Others 4.00-10.25 2008-2010 2,845 2,845

Billsofexchange 2.75-4.00 2007-2008 14,027 14,027

Fixed-ratenotepayables 2.00-4.00 2008-2009 1,843 1,843

Others 0-6.01 2008-2031 8,198 7,997

Total 53,416 53,215




238 A n n u a l R e p o r t 2 0 0 8

Classified by currencies

Consolidated

2008 2007

Currencies Foreigncurrencies Bahtequivalent Foreigncurrencies Bahtequivalent

(million) (in million Baht) (million) (in million Baht)

USDollar 403 14,090 395 13,315

Euro 9 444 10 497

Baht 51,783 39,604

Total 66,317 53,416

Bankonly

2008 2007

Currencies Foreigncurrencies Bahtequivalent Foreigncurrencies Bahtequivalent

(million) (in million Baht) (million) (in million Baht)

USDollar 403 14,090 395 13,315

Euro 9 444 10 497

Baht 51,808 39,403

Total 66,342 53,215





Subordinated debentures

On20September1999theBankissued10yearsubordinateddebenturesofBaht742millionwithaninterestrate

of5%perannum.Interestispayableyearly.

On18January2000theBankissued10yearsubordinateddebenturesofBaht1,077millionwithaninterestrateof

4.25%perannum.Interestispayableyearly.

On28December2000theBankissued10yearsubordinateddebenturesofBaht260millionandBaht545million

withaninterestrateof3.5%perannum.Interestispayableyearly.

On20March2003theBankissued10yearsubordinateddebenturesofBaht800million.Theinterestrateforthe

first5yearsis4%perannumandtheremaining5yearsisMLR-2%perannum.Interestispayablesemiannuallyon

20Marchand20September.On20March2008theBankredeemedtheabovementionedsubordinateddebentures

beforethematuritydate.

On30July2003theBankissued10yearsubordinateddebenturesofBaht2,000million.Theinterestrateforthe

first5yearsis18.02%perannumandtheremaining5yearsisMLR-2%perannum,butnotlowerthan3.23%per

annum.Interestispayablesemiannuallyon30Januaryand30July.

On9March2005theBankissued10yearsubordinateddebenturesofBaht8,000million.Inyears1-5,interestis

payableatthehigherofthefloatingrateequaltothe12monthfixeddepositrateoftheBankplus2%perannumor

4%perannum.Inyears6-10,interestispayableatthehigherofthefloatingrateequaltothe12monthfixeddeposit

rateoftheBankplus2%perannumor5%perannum.InterestispayablequarterlyinMarch,June,September

andDecember.TheBankcanredeemthesubordinateddebenturesbeforethefifthyearaftertheissuingdateor

accordingtocertainspecifiedconditions.




240 A n n u a l R e p o r t 2 0 0 8

Hybrid debentures

On20March2003theBankissued10yearsubordinatedebenturesofBaht250million.Theinterestrateforthefirst

5yearsoftheprincipalis4.625%perannumandtheremaining5yearsinterestrateisMLR-1.5%perannum.The

Bankcanredeemhybriddebenturesbeforethematuritydate,5yearsaftertheissuingdateoraccordingtocertain

specifiedconditions.Thehybriddebentureshavetherighttoreceivedebtrepaymentinsequenceafterthegeneral

subordinateddebentures.

Perpetual Non-Cumulative Tier 1 Securities

On3May2006,theBankissuedUSD200millioninaggregateasaprincipalamountofPerpetualNon-Cumula-

tiveTier1securities(HybridTier1).Thesecuritiesareperpetual,howevertheBankhasanearlyredemptionoption

subjecttothepriorwrittenapprovaloftheBankofThailandandtheBankbeingsolventatthetime.Earlyredemption

ispermittedinthefollowingcircumstances:

1. Fromyear10onwards,oneachinterestpaymentdate.

2. IntheeventofcertainchangesaffectingtaxationinThailandortheCaymanIslandsmadebyanypolitical

sub-divisionorotherauthoritywiththepowertotax.

3. IntheeventthesecuritiesnolongerqualifyasTier1capitaloftheBank,undertheBankofThailand’scapital

adequacyrequirementsandapplicableregulations.

Interestispayableforthefirst10yearsatafixedinterestrateof7.75%perannumpayablesemi-annuallyon30

Juneand30December,andforyear11onwardsatafloatinginterestrateof3.13%perannumabove3-monthUSD

LIBORandispayablequarterlyon30March,30June,30Septemberand30December.

Attheendoftheperiodafterwhichtheinterestisdue,iftheBankdoesnotexpectanetprofitintheconsolidated

financialstatements,theBankisnotobligedtomakeanyinterestpaymentsforthatperiod.Moreover,thisinterest

willbenon-cumulativeandwillnotbecarriedforwardtoanotherpaymentperiod.

Fortheyearended31December2008,theBankpaidinterestexpensesofBaht527millionforHybridTier1.

Fortheyearended31December2007,theBankdidnotreportnetprofitintheconsolidatedfinancialstatements.

However,theBankrequestedtheBankofThailand’spermissiontopayinteresttothenoteholders.Strictlyapplying

thenotes’condition,theBankofThailanddidnotallowtheBanktopaytheabovementionedinterestfortheyear

ended31December2007.





Other Borrowing

Borrowingswithspecificusesasat31December2008areasfollows:


BorrowingFrom Objectives Outstandingbalances

Currencies Bahtequivalent

(million) (in million Baht)

MinistryofFinance Agro-industrialenterprises THB19 19

Enterprisesinmajorbasic EUR0.31 15

industries

EnergyConservation Investinginenergyconservation THB604 604

PromotionFund

NationalScienceand Researchanddevelopmentactivities THB93 93

TechnologyDevelopment

Agency

NordicInvestmentBank JointventureswiththeNordiccountries USD73 2,558

(NIB) andbusinessesusingNordic

machinery/equipment

JapanBankforInternational Forequityinvestment&on-lendingto USD130 4,543

Cooperation(JBIC) non-SETlistedenterprisesand

non-environmentalimpacthaving

ajoint-venturewithJapaneseor

Japaneseconnection,orTsunami

adverselyaffectedentrepreneurs

havingJapaneseconnection

Kreditanstaltfur Smallindustrybusinesses EUR9 428

Wiederaufbau(KfW)

8,260




242 A n n u a l R e p o r t 2 0 0 8

5.14 Provisionsofobligationfromthetransferrednon-performingassets

Consolidated

TAMC BAM Total

(note5.26) (note5.27)

(in million Baht)

At1January 5,071 - 5,071

Provisionsmadefor

Increaseinloss 774 3,204 3,978

At31December2007and1January2008 5,845 3,204 9,049

Provisionsmadefor

Decreaseinloss (49) - (49)

Presentvalue 61 186 247

At31December2008 5,857 3,390 9,247

Bankonly

TAMC BAM Total

(note5.26) (note5.27)

(in million Baht)

At1January 5,041 - 5,041

Provisionsmadefor

Increaseinloss 774 - 774

At31December2007and1January2008 5,815 - 5,815

Provisionsmadefor

Decreaseinloss (58) - (58)

Presentvalue 61 - 61

At31December2008 5,818 - 5,818

Refertonote5.26fortheprovisionmadefromthesellingofloanstoThaiAssetManagementCorporation(“TAMC”)

andnote5.27forthesellingofassetsofPhayathaiAssetManagementCompanyLimitedtoBangkokCommercial

AssetManagementCompanyLimited(“BAM”).





5.15 Otherprovisions

Consolidated

2008 2007

Typeofprovisions Beginning Increase Ending Beginning Increase Ending

balance balance balance balance

(in million Baht)

Off-balancesheet

contingencies 157 1,111 1,268 53 104 157

Litigation(note5.21) 936 39 975 816 120 936

Earlyretirementproject - 850 850 - - -

Others - 67 67 - - -

Total 1,093 2,067 3,160 869 224 1,093

Bankonly

2008 2007

Typeofprovisions Beginning Increase Ending Beginning Increase Ending

balance balance balance balance

(in million Baht)

Off-balancesheet

contingencies 157 1,111 1,268 53 104 157

Litigation(note5.21) 936 23 959 816 120 936

Lossoninvestmentin

subsidiaryinexcessofcost 1,785 (370) 1,415 - 1,785 1,785

Earlyretirementproject - 850 850 - - -

Others - 67 67 - - -

Total 2,878 1,681 4,559 869 2,009 2,878

TheBankprovidesprovisionfortheoff-balancesheetcontingencies(seenote4.15).

Theprovisionfortheearlyretirementprojectrelatestotheexpectedcostsofthevoluntaryearlyretirementplanan-

nouncedbytheBanktotheemployeesinDecember2008.Theexpectedcostisbasedonmanagementestimates

andwilldependonthenumberofeligibleemployeesunderthetermsoftheplan,andtheirrespectivecompensation.

Theprovisionisexpectedtobeusedin2009.




244 A n n u a l R e p o r t 2 0 0 8

5.16 Sharecapitalandwarrants

Share capital


Parvalue 2008 2007

pershare Number Amount Number Amount

(in Baht) (million shares/million Baht)

Authorised

Balanceat1January

-preferredshares 10 1,992 19,920 1,992 19,920

-ordinaryshares 10 41,717 417,167 16,737 167,367

Reductionofshares

-ordinaryshares 10 - - (128) (1,283)

Increaseofnewshares

-ordinaryshares 10 - - 25,108 251,083

Balanceat31December


-ordinaryshares 10 41,717 417,167 41,717 417,167

Issuedandpaid

Balanceat1January


-ordinaryshares 10 41,537 415,367 16,537 165,367

Increaseofnewshare

-ordinaryshares 10 - - 25,000 250,000

Balanceat31December


-ordinaryshares 10 41,537 415,367 41,537 415,367





Asat31December2008and2007theBankhadauthorisedsharecapitalofBaht437,087million,consistingof

41,716,741,279ordinarysharesofBaht10parvalue,and1,991,997,200preferredsharesofBaht10parvalue.

Asat31December2008and2007theBankhadfullypaid-upsharecapitalofBaht435,287million,consistingof

41,536,741,279ordinarysharesofBaht10parvalue,and1,991,997,200preferredsharesofBaht10parvalue.

TheExtraordinaryGeneralMeetingofShareholdersNo.1/2007,convenedon27November2007,passedthe

followingresolutions:

1. Toapprovetherevocationof131,842,000unitsofwarrantsand128,365,942ordinarysharesnewlyissuedfor

accommodationthewarrantsnotyetissuedandallocatedtotheBank’semployees.

2.ToapprovetheBank’srecapitalisationasthefollowingdetails:

2.1ToconsiderapprovingthedecreaseoftheBank’sregisteredcapitalfromBaht187,287,384,790to

Baht186,003,725,370bymeansofeliminating128,365,942unallocatedordinaryshareswithaparvalue

ofBaht10pershare.

2.2 ToapprovetheincreaseoftheBank’sregisteredcapitalfromBaht186,003,725,370toBaht437,087,384,790

byissuing25,108,365,942newordinaryshareswithaparvalueofBaht10pershare.

2.3ToapprovetheallocationoftheBank’s25,000,000,000newlyissuedordinarysharesandthedetailsofthe

allocationofshares.Theallocationsshallbemadeinthefollowingorders:

2.3.1 Notexceeding10,970,893,359newlyissuedordinaryshareswillbeofferedforsaletoINGBank

N.V.,attheofferingpriceofBaht1.60pershare.

2.3.2 Notexceeding2,141,728,186newlyissuedordinaryshareswillbeofferedforsaletoThaiNVDR

Co.,Ltd.duetothepurchaseofNon-VotingDepositoryReceipts(the“NVDR”)inanequalamount

byINGSupportHoldingB.V.fromThaiNVDRCompanyLimitedatanofferingpriceofBaht1.60pershare.

2.3.3 Notexceeding11,887,378,455newlyissuedordinaryshareswillbeofferedthroughapreferential

offeringinThailandtotheexistingshareholdersoftheBank.Detailsoftheallocationareasfollows:

1) Notexceeding5,586,944,825newlyissuedordinaryshareswillbeallocatedto:

a)theMinistryofFinanceontherightofferingbasisdeterminedfromtheshareholdingproportion

ofnotexceeding2,854,559,829shares,attheofferingpriceofBaht1.40pershare.

b) theMinistryofFinancebasedontheexcessrightstoitsshareholdingproportionofnot

exceeding2,732,384,996shares,attheofferingpriceofBaht1.40pershare.

2) Notexceeding6,300,433,630newlyissuedordinaryshareswillbeallocatedthroughapreferential

offeringinThailandtotheexistingshareholdersoftheBankwhosenamesarelistedinthe

shareholdersregisterbookon7November2007(excepttheMinistryofFinance),atthe

offeringpriceofBaht1.40pershare.Theexistingshareholdersmayexercisetheirrightsto

subscribeanynumberofsharesastheywish,buttheshareswillbeallocatedinproportionto

theirshareholdingsasappearedintheshareholdersregisterbookasattheclosingdate(except

theMinistryofFinance),ataratioof1existingshareto0.4941newshares.Anyfractionofthe

sharesremainingfromtheallocationshallbediscarded.




246 A n n u a l R e p o r t 2 0 0 8

2.4 Toapprovetheofferingofnewlyissuedordinaryshares,atthepricediscountedfromthemarketpricebymorethan10%.

2.5 ToapprovetheenteringintotheconnectedtransactionbetweentheBankandtheMinistryofFinanceinthe

portionoftheexcessrightstoshareholdingproportionofnotmorethan2,732,384,996shares.

2.6Toapprovetheallocationofadditional108,365,942ordinarysharesofBaht10parvalueforaccommodating

theadjustmentofrightsunderthewarrantstopurchasetheBank’sordinaryshares.

2.7ToapprovethewaiverfrommakingatenderoffertopurchaseallsecuritiesoftheBankbyINGBankN.V.

On7December2007theBankregisteredtheincreasedauthorizedsharecapitalfromBaht186,003,725,370toBaht

437,087,384,790withtheMinistryofCommerce,consistingof41,716,741,279ordinarysharesofBaht10parvalue

and1,991,997,200preferredsharesofBaht10parvalue.

On28December2007theBankregisteredtheincreaseinfullypaid-upsharedcapitalofBaht250,000million,

consistingof25,000millionordinarysharesofBaht10parvalue.

AllexpensesinvolvingtheissuingofnewsharecapitalofBaht391millionhavebeenincludedintheamountdisclosed

asthediscountonnewordinarysharesofBaht212,769millionasat31December2007.

Preferred shares

TheonlypreferredsharesoutstandingaretheclassBnon-cumulativepreferredshareswithvotingrights,issuedto

theMinistryofFinanceundertheTier1CapitalSupportSchemeon19May2000,whichhavetherighttoreceive

dividendpriortotheordinaryshares.TherightsandbenefitsoftheclassBpreferredsharesaresummarisedasfollows:

1.Righttoreceiptofdividendissuperiortothatofordinaryshares.

- Attherateof3.75%perannum.IfinanyyeartheBankpaysdividendforordinarysharesataratehigher

thanthatofpreferredshares,theBankhastopaythesamerateofdividendforpreferredshares.

- Iftheprofitisinadequatetopaydividendforpreferredsharesatthedeterminedrate,theBankwillpay

dividendforpreferredsharesaccordingtoitseligibleprofitandfinancialability.

2. Incaseofcapitaldecreaseduetothefollowingevents.

- TheoperatinglossesarisingfromtheassetsacquiredbeforethecapitalinjectionoftheMinistryofFinance,

theBankwillreducethecapitaloftheordinarysharesbeforeareductionofthecapitalofthepreferredshares.

- TheoperationallossresultingfromtheassetsexistingaftertheMinistryofFinance’sincreaseofcapital,the

Bankshallproportionatelydecreasecapitalaccordingtotheholdingportionoftheordinarysharesand

thepreferredshares.

- Othercircumstances,orintheeventoftheBank’sliquidation,thepreferredshareswillhavethepreferential

rightovertheordinarysharesinreceivingthereturnofcapital.





ClassBpreferredshareswillhavethepreemptiverightfor10yearsi.e.until19May2010,wheneachsuchpreferred

shareoutstandingshallautomaticallybecomeanordinaryshare,withthesamerightsasotherordinaryshares.The

holderofaclassBpreferredshareshallbeentitledtoconvertitintoaordinarysharebefore19May2010onany

20March,20June,20Septemberor20December.

Warrants

On1February2006theBankissued68,158,000warrantswithzeropricetotheBank’semployees.Thewarrants

canbeexercisedtobuyordinaryshares.Thesewarrantsareinthebearer’snameandarenon-negotiable,except

forlegacytransfers.

Thedetailsofthewarrantsissuedisasfollows:

1. Offerdate 1February2006

2. Maturity Fiveyearsfromtheissuancedate

3. Offerprice Bahtzero

4. Righttoexercise 1warrant:1.051*ordinaryshare

5. Exerciseprice Baht4.48*pershareexceptincaseofadjustment

inaccordancewiththetermsandconditions

6. Exercisedate(everylastbusinessday) 31Januaryand31Julyofeachyear

7. Termofexerciseperiod 31July2008-31January2011

*Adjusted

Thestructureofshareholdersasat31December2008and2007aresummarisedasfollows:

Classified by type of persons


2008 2007

(%)

Individuals 1 1

Juristicentities 99 99

Classified by nationality


2008 2007

(%)

Thai 55 50

Foreign 45 50




248 A n n u a l R e p o r t 2 0 0 8

Restrictions on dividend payments

PaymentofdividendsbytheBankisregulatedbylawandisalsosubjecttothediscretionofitsBoardofDirectors,

andwilldependon,amongotherthings,itsearnings,financialcondition,capitalrequirementsandotherfactors.Under

Thailaw,theBankmayonlypaydividendsifitsretainedearningsarepositive,evenifanetprofitisrecordedinthe

currentyear.

InaccordancewiththeBankofThailand’sannouncementregardingbadordoubtfulassets,theBankisnotallowed

topayanydividendstotheshareholdersduringanyperiodinwhichthebadorirrecoverableassetshavenotbeen

writtenofforanallowancefordoubtfulassetshasnotbeenfullyprovided.

AccordingtotheBankofThailand’sannouncementonguidelinesforcommercialbanksdividendpayments,

commercialbanksshouldnottakeunrealisedprofitorprofitthatisnotbasedonactualcashflowtomakedividend

paymentssuchasprofitfrommark-to-marketsecuritiesvalue,oranyprofitderivingfromthereclassifyingoffinancial

assetsortheprofitsharingfromassociatedandsubsidiarycompanies.Commercialbanksshouldnotmakedividend

paymentsoutofprofitfromthesaleofassets,whichisnotactuallycompleted,andwhichmayresultinabnormal

profitorloss,noroutofthesaleofpropertiesforeclosedwhererepurchaseconditionsarepartofthearrangement.

5.17 Reserves

Currency translation changes

Thecurrencytranslationchangesrecognisedinshareholders’equityrelatetoforeignexchangedifferencesarising

fromtranslationofthefinancialstatementsofforeignoperationstoThaiBaht.

Fair value changes and revaluation surpluses

Fairvaluechangesandrevaluationsurplusesrecognisedinequityrelatetocumulativenetchangesinthefairvalue

ofavailable-for-saleinvestmentsandsurplusesarisingfromtherevaluationsoflandandbuildings.





Surplusonrevaluationoffixedassets

TheBankcompletedtherevaluationofitslandsandbuildingsduringthequarterended30September2008.Asat

thedateofrevaluation,thesurplusonassetrevaluationincreasedbyBaht2,101millionwhiletherewasanincrease

inallowanceforimpairmentlossesonlandsandbuildingsofBaht48million.Thisallowanceforimpairmentlosses

wasrecordedaslossonimpairmentofassetsinthestatementofincome.TheBankwillincludetheappreciationin

valueofpremiseinTier2capitalaftertheBOT’sapproval.

Asat31December2008and2007thesurplusonrevaluationoffixedassetsrepresentedthesurplusonlandre-

valuationofBaht3,115millionandBaht1,869million,respectively,andthesurplusonbuildingrevaluationofBaht

2,174millionandBaht1,381million,respectively,(netofaccumulateddepreciationofBaht1,335millionandBaht

454million,respectively).Thelandandbuildingrevaluationwasassessedbyindependentappraisalcompanies.

Legal reserve

Section116ofthePublicCompaniesActB.E.2535requiresthatacompanyshallallocatenotlessthan5%ofits

annualnetprofit,lessanyaccumulatedlossesbroughtforward(ifany),toareserveaccount(“legalreserve”),until

thisaccountreachesanamountnotlessthan10%oftheregisteredauthorisedcapital.Thelegalreserveisnot

availablefordividenddistribution.

5.18 Incometax

ThecurrentincometaxexpenseintheconsolidatedandtheBankonlystatementsofincomeislessthantheamount

determinedbyapplyingtheThaicorporationincometaxratetotheaccountingprofitfortheyearprincipallybecause

unutilisedtaxlossesbroughtforwardfromthepreviousyearshavebeenutilisedduringtheyeartoset-offagainst

thecurrentyear’staxableincome.

TheincometaxexpenseforthepreviousyearintheconsolidatedandtheBankonlystatementsofincomerelated

totheprofitoftheBank’ssubsidiariesandforeignbranches.ThelossessufferedbytheBankonlyandcertainsub-

sidiariescannotbeset-offagainsttheprofitoftheBank’sothersubsidiariesandforeignbranches.




250 A n n u a l R e p o r t 2 0 0 8

5.19 Earnings/(loss)pershare

Basic earnings / (loss) per share

Thecalculationofbasicearnings/(loss)persharefortheyearsended31December2008and2007wasbasedon

thenetprofit/(loss)attributabletoordinaryshareholdersandtheweightedaveragenumberofsharesoutstanding

duringeachyearasfollows:

Net profit /(loss) attributable to ordinary shareholders (basic)


2008 2007 2008 2007

(in million Baht)

Netprofit/(loss)attributableto

ordinaryshareholders(basic) 424 (43,677) 289 (43,916)

Weighted average number of ordinary shares (basic)


2008 2007

(in million shares)

Issuedordinarysharesat1January 41,537 16,537

Effectofissuedordinarysharesat28December2007 - 274

Weightedaveragenumberofordinaryshares(basic) 41,537 16,811





Diluted earnings / (loss )per share

Thecalculationofdilutedearnings/(loss)persharefortheyearsended31December2008and2007wasbased

onthenetprofit/(loss)attributabletoordinaryshareholdersasaboveandtheweightedaveragenumberofshares

outstandingduringeachyearasfollows:

Weighted average number of ordinary shares (diluted)


2008 2007

(in million shares)

Weightedaveragenumberofordinaryshares(basic) 41,537 16,811

Effectofconversionofconvertiblepreferredshares 1,992 1,992

Weightedaveragenumberofordinaryshares(diluted) 43,529 18,803

Thereisnodilutingeffectonearnings/(loss)persharethatmightresultfromanassumedexerciseofwarrants.




252 A n n u a l R e p o r t 2 0 0 8

5.20 Capitalrequirements

ThecapitalmaintainedbytheBankandPhayathaiAssetManagementCompanyLimited(subsidiary)asrequiredby

theBankofThailand,asat31December2008and2007consistedof:


2008 2007

(in million Baht)

Tier1capital

Issuedandfullypaidsharecapitalandpremium

(discount)onordinaryandpreferredshares 132,199 132,199

HybridTier1 6,897 6,837

Legalreserve 2,100 2,100

Otherreserves 8,717 8,717

Netlossafterappropriation (103,927) (104,272)

TotalTier1capital 45,986 45,581

Tier2capital

Surplusonlandrevaluation 1,302 1,302

Surplusonpremisesrevaluation 660 690

HybridTier1 615 675

Provisionforassetsclassifiedas“pass” 5,040 1,503

Hybriddebt-capitalinstruments 200 250

Subordinateddebentures 9,977 11,701

Unrealisedgainonrevaluationofavailable-for-sale

equitysecurities(net) - 508

TotalTier2capital 17,794 16,629

TotalCapitalbeforedeductivetransaction 63,780 62,210

LessUnrealisedlossonrevaluationofavailable-for-sale

equitysecurities(net) (675) -

Total 63,105 62,210






2008 2007 2008 2007

(%)

Tier1capital 12.25 10.52 10.14* 10.57

Totalcapital 16.81 14.35 13.91* 14.43

Minimumtier1capitalratiorequirement 4.25 4.25 4.25 4.25

Minimumtotalcapitalratiorequirement 8.50 8.50 8.50 8.50

TheconsolidatedcapitalratiosabovearebasedonthefinancialstatementsoftheBankandPhayathaiAsset

ManagementCompanyLimited.

*AsrequiredbyBOT,theBankonlyratiosin2008includetheeffectofusingtheBaselIIapproach(i.e.thisincludes

anadjustmentforoperationalrisk).AlltheotherratiosshownabovearearrivedatundertheBaselIapproach.




254 A n n u a l R e p o r t 2 0 0 8

5.21 Contingenciesandcommitments


2008 2007

Baht Foreign Total Baht Foreign Total

Currency Currency

(in million Baht)

Avaltobillsand

guaranteesofloans

Avaltobills 296 - 296 822 - 822

Loanguarantees 1,765 1,549 3,314 2,630 1,784 4,414

Total 2,061 1,549 3,610 3,452 1,784 5,236

Customerliabilitiesunder

unmaturedimportbills 151 1,082 1,233 293 1,028 1,321

Lettersofcredit 1,142 26,549 27,691 1,467 20,815 22,282

Othercontingencies

Otherguarantees 29,703 8,727 38,430 36,881 6,882 43,763

Foreignexchangecontracts

Forwardforeignexchange

agreements

Bought - 50,983 50,983 - 46,572 46,572

Sold - 52,766 52,766 - 49,842 49,842

Bought

Bought - 71 71 - - -

Sold - 344 344 - - -

Currencyswaps

Bought - 2,546 2,546 - 3,116 3,116

Sold - 883 883 - 918 918

Interestratecontracts

Interestrateswaps 155,757 8,982 164,739 114,373 7,676 122,049

Interestrateoptions - 6,989 6,989 - 6,749 6,749

Swaptions - - - 201 - 201

Unusedoverdraftcreditlines 42,178 - 42,178 47,861 1 47,862

Totalothercontingencies 227,638 132,291 359,929 199,316 121,756 321,072

PrivateR/Pagreement - - - 87 - 87

Total 230,992 161,471 392,463 204,615 145,383 349,998





Litigation

Asat31December2008,legalproceedingsunderguaranteesandotherclaimshadcommencedagainsttheGroupand

theBankin195casesand182cases,respectively(2007:200casesand191cases,respectively)withanamount

claimedofapproximatelyBaht18,488millionandBaht13,735million,respectively(2007:Baht22,532millionand

Baht18,188million,respectively).Asat31December2008,theGroupandtheBankrecognisedprovisionsfor

contingentlossfromlegalcasesofapproximatelyBaht975millionandBaht959million,respectively(2007:Baht

936million).Managementhasconcludedthatsuchprovisionsareadequatetocoveranypossiblelossfromthese

legalcases.

Inaddition,theBankisthedefendanttoaclaimforapproximatelyBaht140,261millionarisingfromaguaranteeallegedly

issuedbytheBank.Thecourtrejectedthisclaim,andthejudgmentisnowbeingappealed.Managementhasbeen

counseledthattheappealhasnomeritandisveryunlikelytosucceed.Managementaccordinglybelievesthatthe

Bankwillhavenomaterialliabilityinthiscase.

TheBankissuedaletterofguaranteetoaforeignbankinaccordancewithasharepurchasecontractdated3April1996

intheproportionofitsshareholdingpercentageof10%amountingtoHongKongDollar73millionandUSD0.07

million.Asat31December2008and2007theoutstandingamount,inproportionwiththeshareholdingpercentage,

isHongKongDollar4million.

Asat31December2008and2007therewerecommitmentswithlistedcompaniesunderrehabilitationplansofBahtnil

andBaht1million,respectively.




256 A n n u a l R e p o r t 2 0 0 8

Capitalcommitments


2008 2007 2008 2007

(in million Baht)

Contractedbutnotprovidedfor

Buildingsandotherconstructions 12 - 12 -

Equipment 90 218 90 215

Total 102 218 102 215


2008 2007 2008 2007

(in million Baht)

Non-cancellableoperatinglease

commitments

Withinoneyear 230 262 218 237

Afteroneyearbutwithinfiveyears 240 257 233 233

Total 470 519 451 470

5.22 Pledgedassets

Asat31December2008and2007,governmentsecuritiesusedascollateralatfacevalueareasfollows:


2008 2007

(in million Baht)

Pledgedassecuritiesforrepurchaseagreements - 4,751

PledgedassecuritiesforRuamJaiHousingLoan 17 17

Pledgedassecuritieswiththecourt 8 8

Total 25 4,776





5.23 Relatedpartytransactionsandbalances

1.Loansandcontingenciesmadetoexecutives*,andtoenterpriseswhereover10%oftheirpaid-upcapitalisheld

bytheBank,executiveofficers(in2008,includingtheirrelatedparties),aresummarisedbelow.

Consolidated

2008 2007

Balanceatthe Balanceatthe

endofyear endofyear

(in million Baht)

Loans

Relatedcompanies 149 774

Executiveofficers* 20 87

Bankonly

2008 2007

Balanceatthe Balanceatthe

endofyear endofyear

(in million Baht)

Loans

Relatedcompanies 2,749 5,574

Executiveofficers* 20 87

*Fortheyearended31December2008executivesaredirectorsorexecutiveofficersandseniororfirstvicepresident

ofFinanceGroup(fortheyearended31December2007,executivesincludeallfirstvicepresidents).




258 A n n u a l R e p o r t 2 0 0 8

2. RelatedpartiesarethosepartieslinkedtocompaniesintheGroupandtheBankbyshareholders,co-investors

ordirectors.Transactionswithrelatedpersonsorrelatedcompaniesareconductedatpricesbasedonmarketprices

or,wherenomarketpriceexists,atcontractuallyagreedprices.

Relatedpartiesareasfollows:

1. Majorshareholderswhoownover10%oftheBank’spaid-upsharecapitalandrelatedcompaniesofsuchmajor

shareholders.

2. CompanieswhoarecontrolledbytheBankorsignificantlyinfluencedbytheBank.

3. Companieswhosesharesareownedbyover20%ofpaid-upcapitalisheldbytheBankorarecontrolledor

significantlyinfluencedbytheBank’sdirectorsorexecutiveofficers.

4. CompaniesinwhichtheBank’sdirectorsorexecutiveofficers,includingrelatedparties,ownshares,orinwhich

theyarethedirectorswithcontrolorsignificantinfluence.

5. TheBank’sdirectorsorexecutiveofficers,includingrelatedparties.

Theadditionalinformationoninvestmentsinsubsidiaries,associatesandrelatedcompaniesisdisclosedinnote5.3

tothefinancialstatements.

*Fortheyearended31December2008executivesaredirectorsorexecutiveofficersandseniororfirstvicepresi-

dentofFinanceGroup(fortheyearended31December2007,executivesincludeallfirstvicepresidents).





ThefollowingsarerelationshipswithrelatedpartiesthatcontrolorjointlycontroltheBankorarebeingcontrolledor

jointlycontrolledbytheBankorhavetransactionswiththeBank/Group.

Nameofentities Countryofincorporation Natureofrelationships

Companieswhoseshareswereownedor Thailand Majorshareholderhas10%ormoreshareholdinginthiscompany.

werecontrolledbytheMinistryofFinance

INGLifeLtd. Thailand Majorshareholderhas10%ormoreshareholdinginthiscompany.

INGFunds(Thailand)Co.,Ltd. Thailand Majorshareholdershave10%ormoreshareholdinginthiscompany.

PhayathaiAssetManagementCo.,Ltd. Thailand Subsidiary,100%shareholding,morethan50%of

ofdirectorsarerepresentativesoftheBank.

IFCTAdvisoryCo.,Ltd. Thailand Subsidiary,100%shareholdinguntil29December2008,morethan50%

(seenote1) ofdirectorsarerepresentativesoftheBank.

DesigneeforETAContractLtd. Thailand Subsidiary,99.40%shareholding,morethan50%ofdirectorsare

representativesoftheBank.

TMBAssetManagementCo.,Ltd. Thailand Subsidiary,75.00%shareholding,equalto50%ofdirectorsare

representativesoftheCompany.

TMBMacquarieSecurities(Thailand)Ltd. Thailand Subsidiary,51%shareholdinguntil2September2008,lessthan50%

(seenote1) ofdirectorswererepresentativesoftheCompany.

TheThaiBusinessFund2 Thailand Beingpropertyfundsundercategory4whichissuedforinstitutional

investorand32%shareholding,lessthan50%ofdirectorsare


SiamResortFund Thailand Beingpropertyfundsundercategory4whichissuedforinstitutional

investorand56.26%shareholding,lessthan50%ofdirectorsare


ThaiOrixLeasingCo.,Ltd Thailand Associate,45.96%shareholding,lessthan50%ofdirectorsare

representativesoftheBank.

PhayathaiPropertyFund Thailand Beingpropertyfundsundercategory2whichissuedforinstitutional

investorand30%shareholding,lessthan50%ofdirectorsare


TheColumnPropertyFund Thailand Beingpropertyfundsundercategory4whichissuedforinstitutional

investorand29.90%shareholding,lessthan50%ofdirectorsare





260 A n n u a l R e p o r t 2 0 0 8

Pricing and interest rate policy for related party transactions

TheBank’spricingandinterestratepolicyisasfollows:

- Interestratesofloansareinaccordancewiththemarketrateexceptfortheinterestrateofstaffwelfareloans

whichareinaccordancewiththeBank’sregulation,andtheinterestrateofloanstosomesubsidiarycompanies

whicharebasedonthedepositinterestrate.

- Feeandserviceincomesuchasannualregistrarfees,transferservicefeestoinvestmentunitholderswhohave

enteredintotransactionswiththeBank,servicesfeesforactingasasubsidiary’spayingagentinrespectof

fundsmanagedbythatsubsidiaryandarelatedcompanyandtrailingagentfeesfromthatsubsidiaryanda

relatedcompanyarechargedattheratebasedonconditionsspecifiedincontractsnegotiatedinthenormal

courseofbusiness,whicharedeterminedbythesizeoffundsandthepurchaseandsalevolumesofinvestment

unitswheretheBankactsasthesellingagent.

- Interestratesondepositsareinaccordancewiththemarketrate.

- Feeandserviceincomeisinaccordancewiththemarketpriceexceptthatthemonthlyserviceincomeforacting

astheagentfordebtcollectionandreceivingdebtrepaymentforasubsidiaryisequaltoBaht10,000andfees

andserviceincomeforprovidingcollateralappraisalservicestoasubsidiarycompanyisequaltoBaht500per

case.Iftheappraisalinvolvesmorethanoneoftitledocument,anadditionalfeeischargedofBaht200perpiece.

Forverificationoflandright-holdingdocuments,theactualchargewillbereimbursed.Forappraisalandverification

ofdocumentsoutsideBangkok,thereisanextraservicechargeofBaht500perday.

- TheBankenteredintoofficerentalandserviceagreements

- TheBankenteredintoofficerentalandserviceagreementswithanassociatedcompanyandarelatedcompany

forabranch,andtherentalandservicefeesarebasedonmarketrate.

- TheBankenteredintoofficerentalandserviceagreementswherethetermisaperiodof3yearstorentoffice

spaceandrenderservicesto2subsidiariesandarelatedcompany,andtherentalandservicefeesarebased

onamutuallyagreedbasisandmarketrate.

Significant agreements with related parties

1. On25April2008,theAnnualGeneralMeetingofShareholdersapprovedtheconnectedtransactionbetweenthe

BankandcompaniesundertheINGGroupwhichareconnectedpersonsoftheBankasfollows:





1.1DistributionAgentAgreementbetweenTMBandINGFunds(Thailand)Co.,Ltd.Thecontracthasaduration

of10years.Theagreementprovidesco-exclusivedistributionrightstoTMBAssetManagementCompany

LimitedandINGFunds(Thailand)Co.,Ltd.Priortotheexpirationoftheagreement,negotiationscanbe

conductedtoreviewtheappropriatenessoftheagreementsandconditions,andifTMBwishestocontinuethe

arrangement,theissuemustbeproposedtotheshareholdersmeetingforapproval.

FeestobereceivedbyTMBvaryaccordingtothetypeoffund,andwillbedeterminedjointlybytheparties.

1.2BancassuranceProductDistributionAgreementbetweenTMBandINGLifeLtd.Thecontract,whichis

exclusive(precludesTMBfromsellinglifeinsuranceproductsfromothercompaniesexceptINGLife),has

adurationof10years.Priortotheexpirationoftheagreement,negotiationscanbeconductedtoreviewthe

appropriatenessoftheagreementsandconditions,andshouldTMBwishtocontinuethearrangement,the

issuemustbeproposedtotheshareholdersmeetingforapproval.

Feesandothercommercialtermsaretobemutuallyagreedbybothparties.

2. On28August2008,TheBank’sBoardofDirectorsunanimouslyapprovedthatTheBankcanenterinto2referral

agreements(“TheAgreements”)withINGAsiaPrivateBankLimited,whoisconsideredasconnectedperson.

Detailsareasfollow;

TheAgreementswereexecutedbyTheBankandINGAsiaPrivateBankLimitedon10November2008.Each

partyhasitsrightstoterminateTheAgreementsbygivingone-monthadvancednoticetoitscounterparty.

Feestobereceivedbyeachpartyvaryaccordingtothetypeofbankingservicesandproducts,whichare

stipulatedinTheAgreements.

Other benefits payable to the directors and executives

TheBank’sdirectorsandexecutivesfromtherankofdepartmentmanagerupwardsdonotreceiveotherbenefits,

monetaryornon-monetaryitems,exceptforthebenefitsthatarenormallypaidsuchasmonthlydirectors’remuneration,

directors’fees,salaryandbonus.DirectorswhoareTMB’sexecutivesanddirectorsrepresentingINGBankN.V.for

theyear2008declinetoreceiveremunerationaspertheBankandINGBankN.V.’spolicies.Nevertheless,Directors

withpermanentresidenceabroadcanreimbursetravellingandaccommodationexpensesinconnectionwiththe

operationofTMBbusinessasactuallyincurred.Certainforeignexecutivesareeligibletobereimbursedforhome

rental,utilitiesandhometripexpensesaccordingtotherelevantguidelines.




262 A n n u a l R e p o r t 2 0 0 8

2.1 SignificantbalancesbetweentheBankandshareholderswhosesharesareover10%oftheBank’spaid-up

capitalandtheirrelatedpartiesasat31December2008and2007areasfollows:


2008 2007

(in million Baht)

Loansandaccruedinterestreceivable

(beforeallowancefordoubtfulaccounts)

Companieswhoseshareswereownedorwere

controlledbytheMinistryofFinance 16,423 1,642

16,423 1,642

Allowancefordoubtfulaccounts


controlledbytheMinistryofFinance 250 16

250 16

Otherassets


controlledbytheMinistryofFinance 4 -

Deposits


controlledbytheMinistryofFinance 9,706 11,832

INGLifeLtd. 168 6

INGFunds(Thailand)Co.,Ltd. 4 -

Total 9,878 11,838






2008 2007

(in million Baht)

Borrowings


controlledbytheMinistryofFinance 51 3,963

Otherliabilities



Contingencies



Fortheyearsended31December2008and2007thesignificanttransactionsareasfollows:


2008 2007

(in million Baht)

Interestincome 290 85

Non-interestincome 195 1

Interestexpenses 389 414

Non-interestexpenses 113 108




264 A n n u a l R e p o r t 2 0 0 8

2.2 SignificantbalancesbetweentheBankanditssubsidiaries,andassociates(theBank’sshareisover20%of

thepaid-upcapital)asat31December2008and2007areasfollows:


2008 2007 2008 2007

(in million Baht)



Subsidiarycompanies

PhayathaiAssetManagementCo.,Ltd. - - 2,601 4,801

Associatedcompanies

ThaiOrixLeasingCo.,Ltd. 100 125 100 125

Allowancefordoubtfulaccounts

Subsidiarycompanies - - 26 48

Associatedcompanies 1 1 1 1

Otherassets

Subsidiarycompanies

TMBAssetManagementCo.,Ltd. - - 16 12

Associatedcompanies

TheThaiBusinessFundII 1 5 1 5

SiamResortFund 3 12 3 12

PhayathaiPropertyFund - 3 - 3

TheColumnPropertyFund - 12 - 12






2008 2007 2008 2007

(in million Baht)

Deposits

Subsidiarycompanies

PhayathaiAssetManagementCo.,Ltd. - - 248 140

IFCTAdvisoryCo.,Ltd. - - - 12


TMBMacquarieSecurities(Thailand)Ltd. - - - 312

Associatedcompanies

TheThaiBusinessFundII - 1 - 1

PhayathaiPropertyFund 17 13 17 13

ThaiOrixLeasingCo.,Ltd. 49 - 49 -

Otherliabilities

Subsidiarycompanies


TMBMacquarieSecurities(Thailand)Ltd. - - - 2



2008 2007 2008 2007

(in million Baht)

Interestanddividendincome



Non-interestincome(feesandserviceincome)


Interestexpenses


Non-interestexpenses






266 A n n u a l R e p o r t 2 0 0 8

2.3 SignificantbalancesbetweentheBankandcompanieswhosesharesareownedbyover20%ofpaid-upcapital

isheldbytheBankorarecontrolledorsignificantlyinfluencedbytheBank’sdirectorsorexecutiveofficersas

at31December2008and2007areasfollows:


2008 2007 2008 2007

(in million Baht)



WitcorpChemicalsLtd. - 61 - 61

MHomeSPV1Co.,Ltd. - 45 - 45

ThaibarodaIndustriesCo.Ltd. - 375 - 375

MahachaiLandDevelopmentCo.,Ltd. - 25 - 25

Total - 506 - 506

Allowancefordoubtfulaccounts - 397 - 397

Deposits

TMBPropertyDevelopmentCo.,Ltd. 4 4 4 4

WitcorpChemicalsLtd. - 1 - 1

CharanInsurancePCL - 81 - 81

MSIGInsurance(Thailand)Co.,Ltd. - 125 - 125

MahachaiLandDevelopmentCo.,Ltd. - 7 - 7

Total 4 218 4 218

Contingencies - 1 - 1

Otherliabilities - 1 - 1







2008 2007 2008 2007

(in million Baht)

Interestincome 1 8 1 8

Interestexpenses 3 10 3 10

Non-interestexpenses 2 16 2 16

Therelatedpartiesincludedebtorsunderrestructuring.

2.4 SignificantbalancesbetweentheBankandcompaniesinwhichtheBank’sdirectorsorexecutiveofficers,

includingrelatedparties,ownshares,orinwhichtheyarethedirectorswithcontrolorsignificantinfluenceas

at31December2008and2007areasfollo


2008 2007

(in million Baht)



MajorCineplexGroupPCL - 167

Allowancefordoubtfulaccounts - 2




268 A n n u a l R e p o r t 2 0 0 8


2008 2007

(in million Baht)

Deposits

PhutathumInsuranceCo.,Ltd. - 91

VictoryToolCo.,Ltd. - 3

DhipayaInsurancePCL - 282

RPMDetailingCo.,Ltd. - 1

MajorCineplexGroupPCL - 1

Total - 378

Contingencies - 10



2008 2007

(in million Baht)

Interestincome - 18

Interestexpenses - 13

Non-interestexpenses 6 8

2.5 Additionally,significantbalancesbetweentheBankandtheBank’sdirectorsorexecutiveofficers,including





relatedpartiesasat31December2008and2007areasfollows:


2008 2007

(in million Baht)

Loansandaccruedinterestreceivables 6 26

Welfareloans 14 80

Allowancefordoubtfulaccounts - 1

Deposits 133 258

Otherliabilities - 1



2008 2007

(in million Baht)

Interestincome 1 3

Non-interestincome - 12

Interestexpenses 2 8




270 A n n u a l R e p o r t 2 0 0 8

5.24 Thefinancialpositionandresultsofoperations

Financial position categorised by type of business

Consolidated

2008

Domestic Overseas Eliminated Total

business business transactions

(in million Baht)

Totalassets 601,048 11,860 (10,923) 601,985

Interbankandmoneymarketitems-net(assets) 72,308 279 - 72,587

Investments-net 83,983 - - 83,983

Loans 423,685 601 - 424,286

Deposits 450,083 214 - 450,297

Interbankandmoneymarketitems(liabilities) 9,228 71 - 9,299

Borrowings 54,786 11,531 - 66,317

Contingencies 385,459 7,004 - 392,463

Consolidated

2007



(in million Baht)

Totalassets 620,993 11,166 (9,998) 622,161

Interbankandmoneymarketitems-net(assets) 20,546 214 - 20,760

Securitiespurchasedunderresaleagreements 27,800 - - 27,800

Investments-net 96,346 - - 96,346

Loans 464,019 876 - 464,895

Deposits 465,190 272 - 465,462

Interbankandmoneymarketitems(liabilities) 24,950 43 - 24,993

Securitiessoldunderrepurchaseagreements 4,765 - - 4,765

Borrowings 42,954 10,462 - 53,416

Contingencies 343,238 6,760 - 349,998





Results of operations categorised by type of business

Theresultsofoperationscategorisedbytypeofbusinessfortheyearsended31December2008and2007which


Consolidated

2008



(in million Baht)

Interestanddividendincome 29,135 745 (729) 29,151

Interestexpense 13,358 717 (716) 13,359

Netincomefrominterestanddividends 15,777 28 (13) 15,792

Non-interestincome 6,984 17 13 7,014

Non-interestexpenses 22,164 26 - 22,190

Profitbeforeincometax 597 19 - 616

Consolidated

2007



(in million Baht)

Interestanddividendincome 33,699 905 (880) 33,724

Interestexpense 17,835 335 (888) 17,282

Netincomefrominterestanddividends 15,864 570 8 16,442

Non-interestincome 6,579 21 (8) 6,592

Non-interestexpenses 66,415 28 - 66,443

Profit/(loss)beforeincometax (43,972) 563 - (43,409)




272 A n n u a l R e p o r t 2 0 0 8

5.25 Financialinstruments

Afinancialinstrumentisanycontractthatgivesrisetobothafinancialassetofoneenterpriseandafinancialliability

orequityinstrumentofanotherenterprise.

Accounting policies

Detailsofsignificantaccountingpoliciesandmethodsadopted,includingcriteriaforrecognition,thebasisof

measurementandthebasisonwhichrevenueandexpensesarerecognisedinrespectofeachclassoffinancial

assetsandfinancialliabilitiesaredisclosedinNote4.

Risk Management Approach

TheBankhassetupitsriskmanagementstructureinordertoefficientlymanageitscorerisksi.e.credit,market,

operational,liquidity,reputationalandstrategicrisks.Variousriskpoliciesandprocedureshavebeenestablishedto

providecommonguidelinesandstandardstobeappliedconsistentlyacrosstheBank.

TheBankmanagesitsrisksunderthefollowingkeyprinciples:corerisksmustbeidentified,measured,monitored,

reported,analysedandcontrolled;businessactivitiesaremanagedunderarisk-returnframeworktoensurethat

risksundertakenarecommensuratewithanappropriatereturn.

TheBankriskgovernancestructureconsistsoftheRiskManagementCommittee(RMC)andseniormanagement

riskcommitteeswhichprovideforumstodiscussspecificriskareas:AssetandLiabilitiesManagementCommittee

(ALCO),theCreditPolicyCommittee,theOperationalRiskManagementCommitteeandtheChiefExecutiveCom-

mittee.TheRMChasbeendelegatedbytheBoardofDirectorstoreviewandoverseethemanagementofallrisks

acrosstheenterpriseandisauthorisedtoapprovetheBank’soverallriskmanagementstrategies,policies,frameworks

andstandards,aswellasaggregaterisktoleranceandriskconcentrationlevels.

Whilebusinessunitsareprimarilyresponsibleformanagingrisks,alltheriskmanagementrelatedfunctionsareunder

thestewardshipoftheChiefRiskOfficer(CRO).Therearededicatedunitsformarketriskmanagement,creditrisk

managementandoperationalriskmanagementwhichareresponsibleforestablishingfirm-wideriskmanagement

policiesandguidelines,actascentresforriskmanagementactivitiesandassumesthefollowingroles:todevelop

andmaintainriskmanagementpolicies;toproposeriskstrategyandrecommendriskappetitetotopmanagement

forapproval,andtomonitor,controlandreportrisklevelstotopmanagement.





Credit risk

Creditriskreferstotheriskthatacounter-partyoranobligororanissuerwilldefaultonitscontractualobligations

resultinginafinanciallosstotheBank.Thispotentialearningsvolatilityiscausedbytheinabilityorunwillingnessof

anobligortofulfillitscontractualobligations.Creditexposuremainlyarisesfromlendingandderivativesactivities,

paymenttransactionsandsecuritiessettlements.

Credit Policies/Framework

TheBank’screditriskappetiteandstrategyareapprovedbytheRiskManagementCommittee.Toproperlymanage

creditrisk,theBankhasputinplacetheCoreCreditRiskPolicies(CCRP)andframeworksinordertoensurethat

creditdecisionsareprudentlymadeandmakecreditriskmanagementanintegratedpartofallcredit-relatedbusiness

processes.AllrelevantBusinessUnitsandSupportUnitsarerequiredtoformulatetheirownspecificpoliciesand

supplementarypoliciesundertheCCRP.TheBankhasalsoestablishedpoliciestoensurediversificationofitscredit

portfoliotoaddressvariousconcentrationriskscoveringsingleexposureconcentrationriskonagroupbasisthatis

economicallyinterdependent,industry/businesssectorconcentrationriskandcountryexposureconcentrationrisk.

Credit Approval Process

Inmanagingcreditrisk,theBanksegregatestherolesandresponsibilitiesofthecreditmarketingfunctionfromthe

creditgrantingfunctiontoensureproperchecksandbalance.Individualcreditriskisanalysedandassessedby

experiencedcreditofficersandapprovedbyanappropriateauthoritydependingonthesizeandrisklevelsofcredit

requested.

TheBankhascontingentliabilitiesbyissuingloanpaymentguarantees,andotherformsofguaranteeaswellas

issuinglettersofcreditandendorsingavaloncommercialbillsandnotesforitscustomers.Suchcontingenttransaction

activitiesrequireassessmentonfinancialconditionofcustomersinthesamemannerasthosefordirectlending.The

Banknormallydemandstheplacementofadequatecollateralbycustomersinvariousformsincluding,forexample,

bankdeposits,securitiesandpersonal/corporateguarantees.TheBankalsomakesitastandardpracticetosetcredit

termsandconditionstomitigatetheelementsofriskinthesamemannerasforothercreditgrantingprocedures.




274 A n n u a l R e p o r t 2 0 0 8

Credit Quality Review

TheBankhassetupCreditQualityReviewDepartmentindependentfromcreditprocessestoprovideon-going

surveillanceonpotentialcreditqualitydeteriorationtrend.Anindependentreviewofthecreditqualityfunctionis

fullydedicatedtoidentifyingearly-warningsignsofchangesinportfolioqualityandprovidingseniormanagement

withinsightandin-depthinformationonthequalityofthecreditportfolio,weaknessesofpolicies,processesand

procedurestogetherwithcorrectiveandprotectiverecommendations.Changesandimprovementstorelevantcredit

policies,proceduresandprocessescouldbemadebasedonlessons-learnedrecommendationstorelevantparties.

Market risk

Marketriskreferstotheriskofthefluctuationofforeignexchangerates,interestratesandpricesofequitysecurities,

allofwhichhaveastrongimpactontheBank’sassetsandliabilitiesincludingoff-balancesheetitems.

TheALCOholdstheresponsibilitytoensurethatbank-widemarketriskmanagementfollowstherelevantriskpolicies

andlevelsofriskappetite.TheBankclassifiestheoverallmarketriskinto2parts:tradingbookandbankingbook.

TheBankhassetapolicytosetstandardsonthebookdefinitionsandclassificationcriteria.

Market risk in the trading book:Thetradingmarketriskconsistsofmarketriskfromfinancialinstruments,equities

andderivativeswhichareheldwithtradingintent,aswellasBank-widecurrencyrisk.TheBankmanagesallthe

tradingmarketriskswithintheguidelinessetundertheestablishedTradingMarketRiskManagementPolicyincluding

settinguptheappropriateriskappetite.

Market risk in the banking book:ThisriskconsistsofmarketriskembeddedintheBank’sonandoff-balancesheet

structure,andderivativesdesignatedtohedgeotherbankingbookitems.TheBankhasdevelopedaBalanceSheet

RiskManagementPolicy,whichoutlinestheapproachtowardsmanagingsuchmarketriskandsettingthemaximum

risklimitinawaywhichisappropriatetotheBank’sbalancesheetstructure.TheBankalsoregularlyemploysthe

toolssetunderthepolicytoanalysetheimpactofchangesinthemarketenvironmenttotheBank’sbalancesheet

aspartofthepracticeofassetandliabilitymanagement.





Currency risk

Currencyriskistheriskthatthevalueofafinancialinstrumentwillfluctuateduetochangesinforeignexchangerates.

ForeigncurrencypositionsinBahtequivalent,asof31December2008and2007wereasfollows:

Consolidated

2008

Currency

USDollars Yen Pounds Euro Others Total

(in million Baht)

Assets

Cash 97 70 18 100 68 353

Interbankandmoneymarketitems 5,643 414 36 192 171 6,456

Investments-net 445 - - 1 17 463

Loans 8,935 897 4 315 343 10,494

Totalassets 15,120 1,381 58 608 599 17,766

Liabilities

Deposits 354 11 5 133 57 560

Interbankandmoneymarketitems 640 - - 2 - 642

Liabilitiespayableondemand 2,041 283 - - 1 2,325

Borrowings 14,090 - - 444 - 14,534

Totalliabilities 17,125 294 5 579 58 18,061

Foreigncurrencypositionofon-balanceitems-net (2,005) 1,087 53 29 541 (295)

Off-balancesheetitems-net 1,750 (1,135) (93) (364) (551) (393)

(Forwardexchangecontracts,

crosscurrencyswapsandFXoptions)




276 A n n u a l R e p o r t 2 0 0 8

Consolidated

2007

Currency


(in million Baht)

Assets

Cash 124 46 29 111 67 377


Investments-net - - - 1 16 17

Loans 10,278 356 66 495 685 11,880

Totalassets 14,516 807 149 804 964 17,240

Liabilities

Deposits 416 13 4 8 13 454

Interbankandmoneymarketitems 94 - - - 50 144

Liabilitiespayableondemand 1,967 217 1 - - 2,185

Borrowings 13,315 - - 497 - 13,812


Foreigncurrencypositionofon-balanceitems-net (1,276) 577 144 299 901 645

Off-balancesheetitems-net 1,080 (562) (168) (613) (809) (1,072)







Bankonly

2008

Currency


(in million Baht)

Assets

Cash 97 70 18 100 68 353


Investments-net 445 - - 1 17 463

Loans 8,935 897 4 315 343 10,494

Totalassets 15,120 1,381 58 608 599 17,766

Liabilities

Deposits 360 11 5 133 57 566

Interbankandmoneymarketitems 640 - - 2 - 642

Liabilitiespayableondemand 2,041 283 - - 1 2,325

Borrowings 14,090 - - 444 - 14,534


Foreigncurrencypositionofon-balanceitems-net (2,011) 1,087 53 29 541 (301)

Off-balancesheetitems-net 1,750 (1,135) (93) (364) (551) (393)






278 A n n u a l R e p o r t 2 0 0 8

Bankonly

2007

Currency


(in million Baht)

Assets

Cash 124 46 29 111 67 377


Investments-net - - - 1 16 17

Loans 10,278 356 66 495 685 11,880

Totalassets 14,516 807 149 804 964 17,240

Liabilities

Deposits 416 13 4 8 13 454

Interbankandmoneymarketitems 94 - - - 50 144

Liabilitiespayableondemand 1,967 217 1 - - 2,185

Borrowings 13,315 - - 497 - 13,812


Foreigncurrencypositionofon-balanceitems-net (1,276) 577 144 299 901 645

Off-balancesheetitems-net 1,080 (562) (168) (613) (809) (1,072)







Interest rate risk

Interestrateriskistheriskthatthevalueofafinancialinstrumentwillfluctuateduetochangesinmarketinterest

rates.

TheBank’sprincipalfinancialassets,loans,mostlyearninterestatfloatingrates,basedonMRR,MLR,MOR,

interestratesoftimedepositsorotherbenchmarkfloatingrates(SIBORorLIBOR).

Informationconcerningfixedversusfloatingratesofloansasat31December2008and2007areasfollows:


2008 2007 2008 2007

(in million Baht)

Fixedinterestrate 51,001 49,254 50,833 48,751

Floatinginterestrate 373,285 415,641 373,372 417,324

Total 424,286 464,895 424,205 466,075




280 A n n u a l R e p o r t 2 0 0 8

Theaveragebalancesoftheinterest-bearingfinancialassetsandliabilitiesoftheBankanditssubsidiaries,calculated

byusingthemonthlyaverageoffinancialassetsandliabilitiesandtheaverageofinterestanddividendratesforthe

yearended31December2008and2007areasfollows:

Consolidated

2008 2007

Interestand Interestand

dividend dividend

Average Income/ Average Average Income/ Average

balance expense rate(%) balance expense rate(%)


Interest-bearingfinancialassets

Interbankandmoneymarketitems 40,712 1,581 3.88 9,650 564 5.84

Securitiespurchasedunderresale

agreements - - - 10,211 192 4.23

Investments 103,483 3,421 3.31 100,532 3,788 3.77

Loans441,075 24,150 5.48 503,690 29,180 5.79

Total 585,270 29,152 4.98 624,083 33,724 5.40

Interest-bearingliabilities

Deposits 449,544 10,197 2.27 508,615 14,078 2.77

Interbankandmoneymarket

items 11,510 127 1.10 24,992 466 1.87

Securitiessoldunderrepurchase

agreements - - - 5,195 91 3.94

Borrowings 66,412 3,035 4.57 68,575 2,647 3.86

Total 527,466 13,359 2.53 607,377 17,282 2.85





Bankonly

2008 2007

Interestand Interestand

dividend dividend

Average Income/ Average Average Income/ Average

balance expense rate(%) balance expense rate(%)


Interest-bearingfinancialassets

Interbankandmoneymarketitems 40,090 1,565 3.90 9,003 551 6.12

Securitiespurchasedunderresale

agreements - - - 10,211 192 4.23

Investments 102,954 3,733 3.63 99,640 3,936 3.95

Loans 441,508 23,883 5.41 505,210 28,751 5.69

Total 584,552 29,181 4.99 624,064 33,430 5.36

Interest-bearingliabilities

Deposits 449,801 10,199 2.27 508,738 14,089 2.77

Interbankandmoneymarketitems 11,708 147 1.26 25,370 466 1.84

Securitiessoldunderrepurchase

agreements - - - 5,195 91 3.94

Borrowings 66,310 2,832 4.27 68,452 2,647 3.87

Total 527,819 13,178 2.50 607,755 17,293 2.85




282 A n n u a l R e p o r t 2 0 0 8

TMB

Bank

Pub

lic C

om

pany

Lim

ited a

nd it

s su

bsidia

ries

For th

e ye

ars

end

ed 3

1 D

ecem

ber

2008 a

nd 2

007

Note

s to

the

fin

anc

ial s

tate

men

ts

Thesign

ifica

ntfina

nciala

ssetsan

dlia

bilitiesclas

sifie

dby

matur

ityo

finter

estr

epric

ing

asat3

1Dec

embe

r200

8ar

eas

follo

ws:

Con

solid

ated

2008

Rep

ricing

Ove

rOve

r

Non

-in

tere

st

Non

-per

form

ing

Total

with

in3

mon

ths

3-12

mon

ths

1ye

ar

be

aring

asse

ts

(in

milli

on B

aht)

Fina

nciala

ssets

Interb

ankan

dmon

eym

arke

titems

59,456

5,84

3-

7,24

6-

72,545

Inve

stmen

ts-net

25,137

14

,987

36

,974

6,88

5-

83,983

Loan

s30

6,39

025

,071

21

,544

1,50

469

,777

42

4,28

6

Totalfinan

cialass

ets

390,98

345

,901

58

,518

15

,635

69

,777

58

0,81

4

Fina

ncialliabilities

Dep

osits

33

1,06

972

,179

30

,865

16

,184

-

450,29

7

Interb

ankan

dmon

eym

arke

titems

7,36

31,13

642

75

8-

9,29

9

Borro

wings

41

,844

9,82

514

,252

39

6-

66,317

Totalfinan

cialliab

ilities

380,27

683

,140

45

,159

17

,338

-

525,91

3





TMB

Bank

Pub

lic C

om

pany

Lim

ited a

nd it

s su

bsidia

ries

For th

e ye

ars

end

ed 3

1 D

ecem

ber

2008 a

nd 2

007

Note

s to

the

fin

anc

ial s

tate

men

ts

Thesign

ifica

ntfina

nciala

ssetsan

dlia

bilitiesclas

sifie

dby

matur

ityo

finter

estr

epric

ing

asat3

1Dec

embe

r200

7ar

eas

follo

ws:

Con

solid

ated

2007

Rep

ricing

Ove

rOve

r

Non

-in

tere

st

Non

-per

form

ing

Total

with

in3

mon

ths

3-12

mon

ths

1ye

ar

be

aring

asse

ts

(in

milli

on B

aht)

Fina

nciala

ssets

Interb

ankan

dmon

eym

arke

titems

13,144

8

22

7,66

5-

20,839

Secu

ritiespu

rcha

sedun

derr

esaleag

reem

ents

27,800

-

--

-27

,800

Inve

stmen

ts-net

20,879

16

,646

45

,572

13

,249

-

96,346

Loan

s34

8,03

214

,765

23

,968

1,61

876

,512

46

4,89

5

Totalfinan

cialass

ets

409,85

531

,419

69

,562

22

,532

76

,512

60

9,88

0

Fina

ncialliabilities

Dep

osits

32

7,22

496

,130

22

,312

19

,796

-

465,46

2

Interb

ankan

dmon

eym

arke

titems

22,703

98

428

01,02

6-

24,993

Secu

ritiesso

ldund

erre

purcha

seagr

eemen

ts

4,76

5-

--

-4,76

5

Borro

wings

29

,522

9,51

613

,201

1,17

7-

53,416

Totalfinan

cialliab

ilities

384,21

410

6,63

035

,793

21

,999

-

548,63

6




284 A n n u a l R e p o r t 2 0 0 8

Thesign

ifica

ntfina

nciala

ssetsan

dlia

bilitiesclas

sifie

dby

matur

ityo

finter

estr

epric

ing

asat3

1Dec

embe

r200

8ar

eas

follo

ws:

Bank

only

2008

Rep

ricing

Ove

rOve

r

Non

-in

tere

st

Non

-per

form

ing

Total

with

in3

mon

ths

3-12

mon

ths

1ye

ar

be

aring

asse

ts

(in

milli

on B

aht)

Fina

nciala

ssets

Interb

ankan

dmon

eym

arke

titems

59,254

5,84

3-

7,24

6-

72,343

เInvestments-net

24,463

14,987

36,974

6,538

-82,962

Loan

s31

0,00

525

,071

21

,544

1,50

466

,081

42

4,20

5

Totalfinan

cialass

ets

393,72

245

,901

58

,518

15

,288

66

,081

57

9,51

0

Fina

ncialliabilities

Dep

osits

33

1,32

072

,179

30

,865

16

,196

-

450,56

0

Interb

ankan

dmon

eym

arke

titems

7,36

31,13

642

75

8-

9,29

9

Borro

wings

41

,869

9,82

514

,252

39

6-

66,342

Totalfinan

cialliab

ilities

380,55

283

,140

45

,159

17

,350

-

526,20

1

TMB

Bank

Pub

lic C

om

pany

Lim

ited a

nd it

s su

bsidia

ries

For th

e ye

ars

end

ed 3

1 D

ecem

ber

2008 a

nd 2

007

Note

s to

the

fin

anc

ial s

tate

men

ts





Thesign

ifica

ntfina

nciala

ssetsan

dlia

bilitiesclas

sifie

dby

matur

ityo

finter

estr

epric

ing

asat3

1Dec

embe

r200

7ar

eas

follo

ws:

Bank

only

2007

Rep

ricing

Ove

rOve

r

Non

-in

tere

st

Non

-per

form

ing

Total

with

in3

mon

ths

3-12

mon

ths

1ye

ar

be

aring

asse

ts

(in

milli

on B

aht)

Fina

nciala

ssets

Interb

ankan

dmon

eym

arke

titems

12,301

8

22

7,34

8-

19,679

Secu

ritiespu

rcha

sedun

derr

esaleag

reem

ents

27,800

-

--

-27

,800

Inve

stmen

ts-net

20,166

16

,646

45

,572

13

,214

-

95,598

Loan

s35

3,51

714

,765

23

,952

1,42

672

,415

46

6,07

5

Totalfinan

cialass

ets

413,78

431

,419

69

,546

21

,988

72

,415

60

9,15

2

Fina

ncialliabilities

Dep

osits

32

7,36

596

,145

22

,312

19

,806

-

465,62

8

Interb

ankan

dmon

eym

arke

titems

23,055

98

428

076

2-

25,081

Secu

ritiesso

ldund

erre

purcha

seagr

eemen

ts

4,76

5-

--

-4,76

5

Borro

wings

29

,522

9,51

613

,201

97

6-

53,215

Totalfinan

cialliab

ilities

384,70

710

6,64

535

,793

21

,544

-

548,68

9

TMB

Bank

Pub

lic C

om

pany

Lim

ited a

nd it

s su

bsidia

ries

For th

e ye

ars

end

ed 3

1 D

ecem

ber

2008 a

nd 2

007

Note

s to

the

fin

anc

ial s

tate

men

ts




286 A n n u a l R e p o r t 2 0 0 8

Risk from changes in price of equities

Riskfromchangesinpriceofequitiesisanyriskthatarisesfromchangesinpriceofequitiesthatmaycausevolatility

intheBank’searningsorvalueoffinancialassets.

EquitiesportfoliomanagementoftheBankismanagedundertheInvestmentBankingGroup,andoverseenbythe

InvestmentCommittee(IC)and/orChiefExecutiveCommittee(CEC).(Allequityinvestmentmustcomplywith

thebank-wideInvestmentPolicyandFramework,andrelatedriskpolicies.)TheConsiderationcriteriaforequity

investmentsincludesconsiderationonriskfactorssuchasoncreditrisk,marketrisk,andliquidityrisk.Variouslimits

aresetincludingGrossInvestmentLimitsandLossLimitLevels.Allofthesemeasuresareestablishedtoensure

thatsecuritiesinvestmentscomplywithpoliciesandremainwithinapprovedlimitsandthattheimpactoncapital

adequacyisalsotakenintoconsideration.

Liquidity risk

LiquidityriskreferstotheriskthatarisesiftheBankfailstomeetitsobligationwhendueasassetscannotbe

liquidatedintocashatcurrentmarketpricesintimeorfromaninabilitytoraisefundsdeemedadequatebymanagement

totheBank’soperations.

TheBank’sALCOisresponsiblefortheoversightofliquiditymanagement.Itsmainpurposesaretomaintainthe

Bank’sliquiditylevelasrequiredbytheBankofThailand’sregulationsandtoensurethattheBank’sliquidityposition

issufficientfortheBank’snormaloperationsaswellasatanycriticalsituationthatmayarise.Inaddition,ALCO

isalsoresponsibleforconsideringappropriatefundingsourcestocopewiththechangeinmarketsituation.The

CorporateTreasuryGroup(CTG)istheBank’sunittaskedwithmonitoring,assessing,reportingaswellasproposing

fundraisingstrategiestoALCOundertheliquidityriskmanagementpolicy.Thepolicyisreviewedonceayearoras

andwhennecessarytoensurethatitisappropriateforallsituations.

Liquiditylimits/guidelinesareestablishedtomanageandcontrolliquidityrisk.Maturityprofilereportsbasedon

contractualandbehavioralmaturitydatesareroutinelyprepared.MCO(MaximumCumulativeOutflows)are

establishedtomeasuretheBank’sbiggestliquidityshortfallataparticularpointintime,enablingfutureplanningsuch

asliquidassetsandcreditlineassessmentstobedonetoprepareliquidityreserves.Inaddition,liquidityassessments

forcriticalsituationsaresetupinordertodealwithunexpectedsituations.AContingencyLiquidityPlanhasbeen

establishedandacknowledgedbytheBoardofDirectors(BOD)topreparetheBankforcrisissituations.

TheBankusesastandardriskmanagementcomputersoftwareprogramtoprocessdatafromtheBank’sown

databaseandtocollecthistoricaldatatoforecastcustomerbehaviour.





Thesign

ifica

ntfina

nciala

ssetsan

dlia

bilitiesclas

sifie

dby

matur

ityasat3

1Dec

embe

r200

8ar

esu

mmar

ised

asfollo

ws:

Con

solid

ated

2008

W

ithin

Ove

rOve

rOve

rOve

rOve

rNo

Atcall

1mon

th

1-3

mon

ths

3-12

mon

ths

1-5

year

s5-

10yea

rs

10yea

rs

matur

ity

Total

(in m

illion

Bah

t)

Fina

ncial a

ssets

Cas

h

11,317

-

--

--

--

11,317

Interb

ankan

dmon

eym

arke

titems

7,71

657

,385

40

36,99

645

-

--

72,545

Inve

stmen

ts-net

-2,64

410

,071

15

,285

44

,201

4,89

7-

6,88

583

,983

Loan

s*

53,769

5

1,67

547

,907

25

,593

82

,444

93

,629

69

,269

-

424,28

6

Totalfinan

cialass

ets

72,802

11

1,70

458

,381

47

,874

12

6,69

098

,526

69

,269

6,88

559

2,13

1

Fina

ncial liabilities

Dep

osits

17

4,27

250

,237

12

2,76

972

,154

30

,865

-

--

450,29

7

Interb

ankan

dmon

eym

arke

titems

3,94

72,82

91,34

51,13

642

-

--

9,29

9

Borro

wings

2

11

,736

18

,239

4,95

310

,890

20

,385

11

2-

66,317

Totalfinan

cialliab

ilities

178,22

164

,802

14

2,35

378

,243

41

,797

20

,385

11

2-

525,91

3

*Non

-per

form

ingloan

sar

eclas

sifie

dun

dert

heiror

iginalm

atur

ity.

TMB

Bank

Pub

lic C

ompany

Lim

ited a

nd it

s Su

bsidia

ries

For th

e ye

ars e

nded

31

Dec

ember

200

8 and

200

7

Note

s to

the

fin

anc

ial s

tate

men

ts




288 A n n u a l R e p o r t 2 0 0 8

Thesign

ifica

ntfina

nciala

ssetsan

dlia

bilitiesclas

sifie

dby

matur

ityasat3

1Dec

embe

r200

7ar

esu

mmar

ised

asfollo

ws:

Con

solid

ated

2007

W

ithin

Ove

rOve

rOve

rOve

rOve

rNo

Atcall

1mon

th

1-3

mon

ths

3-12

mon

ths

1-5

year

s5-

10yea

rs

10yea

rs

matur

ity

Total

(in m

illion

Bah

t)

Fina

ncial a

ssets

Cas

h

10,289

-

--

--

--

10,289

Interb

ankan

dmon

eym

arke

titems

8,12

010

,620

21

750

1,83

2-

--

20,839

Secu

ritiespu

rcha

sedun

derr

esaleag

reem

ents

-27

,800

-

--

--

-27

,800

Inve

stmen

ts-net

-3,84

82,72

619

,385

44

,217

12

,920

-

13,250

96

,346

Loan

s*

63,272

41

,119

52

,013

22

,911

95

,222

12

3,03

667

,322

-

464,89

5

Totalfinan

cialass

ets

81,681

83

,387

54

,956

42

,346

14

1,27

113

5,95

667

,322

13

,250

62

0,16

9

Fina

ncial liabilities

Dep

osits

19

3,95

461

,650

91

,205

96

,341

22

,312

-

--

465,46

2

Interb

ankan

dmon

eym

arke

titems

5,21

211

,723

6,79

498

579

20

0-

-24

,993

Secu

ritiesso

ldu

nder

repu

rcha

seagr

eemen

ts

-4,76

5-

--

--

-4,76

5

Borro

wings

75

11

,298

7,49

83,53

18,21

522

,673

12

6-

53,416

Totalfinan

cialliab

ilities

199,24

189

,436

10

5,49

710

0,85

730

,606

22

,873

12

6-

548,63

6

*Non

-per

form

ingloan

sar

eclas

sifie

dun

dert

heiror

iginalm

atur

ity.

TMB

Bank

Pub

lic C

ompany

Lim

ited a

nd it

s Su

bsidia

ries

For th

e ye

ars e

nded

31

Dec

ember

200

8 and

200

7

Note

s to

the

fin

anc

ial s

tate

men

ts





Thesign

ifica

ntfina

nciala

ssetsan

dlia

bilitiesclas

sifie

dby

matur

ityasat3

1Dec

embe

r200

8ar

esu

mmar

ised

asfollo

ws:

Bank

only

2008

W

ithin

Ove

rOve

rOve

rOve

rOve

rNo

Atcall

1mon

th

1-3

mon

ths

3-12

mon

ths

1-5

year

s5-

10yea

rs

10yea

rs

matur

ity

Total

(in m

illion

Bah

t)

Fina

ncial a

ssets

Cas

h

11,314

-

--

--

--

11,314

Interb

ankan

dmon

eym

arke

titems

7,69

657

,315

29

16,99

645

-

--

72,343

Inve

stmen

ts–

net

-2,64

410

,071

15

,285

43

,527

4,89

7-

6,53

882

,962

Loan

s*

50,673

5

1,66

447

,889

25

,493

82

,113

97

,104

69

,269

-

424,20

5

Totalfinan

cialass

ets

69,683

11

1,62

358

,251

47

,774

12

5,68

510

2,00

169

,269

6,53

859

0,82

4

Fina

ncial liabilities

Dep

osits

17

4,53

550

,237

12

2,76

972

,154

30

,865

-

--

450,56

0

Interb

ankan

dmon

eym

arke

titems

3,94

72,82

91,34

51,13

642

-

--

9,29

9

Borro

wings

2

11,736

18

,264

4,95

310

,890

20

,385

11

2-

66,342

Totalfinan

cialliab

ilities

178,48

464

,802

14

2,37

878

,243

41

,797

20

,385

11

2-

526,20

1

*Non

-per

form

ingloan

sar

eclas

sifie

dun

dert

heiror

iginalm

atur

ity.

TMB

Bank

Pub

lic C

ompany

Lim

ited a

nd it

s Su

bsidia

ries

For th

e ye

ars e

nded

31

Dec

ember

200

8 and

200

7

Note

s to

the

fin

anc

ial s

tate

men

ts




290 A n n u a l R e p o r t 2 0 0 8

TMB

Bank

Pub

lic C

ompany

Lim

ited a

nd it

s Su

bsidia

ries

For th

e ye

ars e

nded

31

Dec

ember

200

8 and

200

7

Note

s to

the

fin

anc

ial s

tate

men

ts

Thesign

ifica

ntfina

nciala

ssetsan

dlia

bilitiesclas

sifie

dby

matur

ityasat3

1Dec

embe

r200

7ar

esu

mmar

ised

asfollo

ws:

Bank

only

2007

W

ithin

Ove

rOve

rOve

rOve

rOve

rNo

Atcall

1mon

th

1-3

mon

ths

3-12

mon

ths

1-5

year

s5-

10yea

rs

10yea

rs

matur

ity

Total

(in m

illion

Bah

t)

Fina

ncial a

ssets

Cas

h

10,287

-

--

--

--

10,287

Interb

ankan

dmon

eym

arke

titems

7,41

810

,271

10

850

1,83

2-

--

19,679

Secu

ritiespu

rcha

sedun

derr

esaleag

reem

ents

-27

,800

-

--

--

-27

,800

Inve

stmen

ts-net

-3,84

82,72

519

,385

43

,523

12

,902

-

13,215

95

,598

Loan

s*

59,795

40

,911

51

,999

22

,518

95

,033

12

8,49

867

,321

-

466,07

5

Totalfinan

cialass

ets

77,500

82

,830

54

,832

41

,953

14

0,38

814

1,40

067

,321

13

,215

61

9,43

9

Fina

ncial liabilities

Dep

osits

19

4,09

461

,650

91

,215

96

,357

22

,312

-

--

465,62

8

Interb

ankan

dmon

eym

arke

titems

5,56

611

,457

6,79

498

579

20

0-

-25

,081

Secu

ritiesso

ldu

nder

repu

rcha

seagr

eemen

ts

-4,76

5-

--

--

-4,76

5

Borro

wings

75

11

,097

7,49

83,53

18,21

522

,673

12

6-

53,215

Totalfinan

cialliab

ilities

199,73

588

,969

10

5,50

710

0,87

330

,606

22

,873

12

6-

548,68

9

*Non

-per

form

ingloan

sar

eclas

sifie

dun

dert

heiror

iginalm

atur

ity.





TMB

Bank

Pub

lic C

ompany

Lim

ited a

nd it

s Su

bsidia

ries

For th

e ye

ars e

nded

31

Dec

ember

200

8 and

200

7

Note

s to

the

fin

anc

ial s

tate

men

ts

Off-

balanc

esh

eetc

ontin

genc

iesby

matur

ityasat3

1Dec

embe

r200

8ar

esu

mmar

ised

asfollo

ws:

Con

solid

ated

and

Ban

kon

ly

20

08

At

call

With

in

Ove

rOve

rOve

rOve

rOve

r

1mon

th

1-3

mon

ths

3-1

2mon

ths

1-5

year

s5-

10yea

rs

10yea

rs

Total

(in m

illion

Bah

t)

Off-

balanc

esh

eet

Avalto

bills

and

gua

rantee

soflo

ans

Avalto

bills

511

482

85

10

-

-29

6

Loan

gua

rantee

s

917

250

437

1,19

351

7-

-3,31

4

Total

922

364

519

1,27

852

7-

-3,61

0

Cus

tomer

liab

ilitiesun

deru

nmatur

edim

port

bills

139

460

523

3-

--

1,23

3

Lette

rso

fcre

dit

-

2,04

61,94

210

,507

13

,196

-

-27

,691




292 A n n u a l R e p o r t 2 0 0 8

TMB

Bank

Pub

lic C

ompany

Lim

ited a

nd it

s Su

bsidia

ries

For th

e ye

ars e

nded

31

Dec

ember

200

8 and

200

7

Note

s to

the

fin

anc

ial s

tate

men

ts

Con

solid

ated

and

Ban

kon

ly

20

08

At

call

With

in

Ove

rOve

rOve

rOve

rOve

r

1mon

th

1-3

mon

ths

3-1

2mon

ths

1-5

year

s5-

10yea

rs

10yea

rs

Total

(in m

illion

Bah

t)

Other

Con

tinge

ncies

Other

gua

rantee

s

5,96

799

92,96

46,91

335

913

21

,215

38

,430

Fore

ignex

chan

gecon

tracts

F

orwar

dfore

ignex

chan

geagr

eemen

ts

Bo

ught

3,25

916

,270

13

,451

18

,003

-

--

50,983

So

ld

42

,885

4,33

51,60

83,93

8-

--

52,766

F

Xop

tions

Bo

ught

-

60

11

--

--

71

So

ld

-

344

--

--

-34

4

Cur

renc

ysw

aps

Bo

ught

-

--

139

2,40

7-

-2,54

6

So

ld

-

-29

857

312

-

-88

3

Intere

stra

tecon

tracts

In

tere

stra

teswap

s

1,90

011

,980

11

,527

51

,941

78

,537

8,85

4-

164,73

9

In

tere

stra

teo

ptions

--

--

6,98

9-

-6,98

9





TMB

Bank

Pub

lic C

ompany

Lim

ited a

nd it

s Su

bsidia

ries

For th

e ye

ars e

nded

31

Dec

ember

200

8 and

200

7

Note

s to

the

fin

anc

ial s

tate

men

ts

Off-

balanc

esh

eetc

ontin

genc

iesby

matur

ityasat3

1Dec

embe

r200

7ar

esu

mmar

ised

asfollo

ws:

Con

solid

ated

and

Ban

kon

ly

20

07

At

call

With

in

Ove

rOve

rOve

rOve

rOve

r

1mon

th

1-3

mon

ths

3-1

2mon

ths

1-5

year

s5-

10yea

rs

10yea

rs

Total

(in m

illion

Bah

t)

Off-

balanc

esh

eet

Avalto

bills

and

gua

rantee

soflo

ans

Avalto

bills

36

179

418

167

22

--

822

Loan

gua

rantee

s

855

266

519

2,13

370

57

1-

4,41

4

Total

891

445

937

2,30

092

57

1-

5,23

6

Cus

tomer

liab

ilitiesun

deru

nmatur

edim

port

bills

-64

18

643

-

-1,02

81,32

1

Lette

rso

fcre

dit

-

2,25

63,06

64,31

912

,641

-

-22

,282




294 A n n u a l R e p o r t 2 0 0 8

TMB

Bank

Pub

lic C

ompany

Lim

ited a

nd it

s Su

bsidia

ries

For th

e ye

ars e

nded

31

Dec

ember

200

8 and

200

7

Note

s to

the

fin

anc

ial s

tate

men

ts

Con

solid

ated

and

Ban

kon

ly

20

07

At

call

With

in

Ove

rOve

rOve

rOve

rOve

r

1mon

th

1-3

mon

ths

3-1

2mon

ths

1-5

year

s5-

10yea

rs

10yea

rs

Total

(in m

illion

Bah

t)

Other

Con

tinge

ncies

Other

gua

rantee

s

6,04

31,34

73,44

88,50

377

214

23

,636

43

,763

Fore

ignex

chan

gecon

tracts

F

orwar

dfore

ignex

chan

geagr

eemen

ts

Bo

ught

-

11,399

11

,412

23

,761

-

--

46,572

So

ld

-

15,048

12

,867

21

,865

62

-

-49

,842

C

urre

ncysw

aps

Bo

ught

-

509

--

2,60

7-

-3,11

6

So

ld

-

--

-91

8-

-91

8

Intere

stra

tecon

tracts

In

tere

stra

teswap

s

-99

94,08

030

,899

77

,690

8,38

1-

122,04

9

In

tere

stra

teo

ptions

--

--

6,74

9-

-6,74

9

S

wap

tions

--

--

-20

1-

201

PrivateR/P

Agr

eemen

t

-87

-

--

--

87





Derivative financial instruments risk

Inthenormalcourseofbusiness,theBankusesderivativefinancialinstrumentstoservetheneedsofitscustomers

andtomanageitsexposureagainstfluctuationsinforeignexchangeratesandinterestrates.

TheseinstrumentsallowtheBankanditscustomerstotransfer,modifyorreducetheirforeignexchangeandinterest

raterisks.

TheBankhasestablishedriskpoliciesandlimits,reportinglinesandcontrolprocedurestomanageandcontrolits

derivativeactivities.Riskcontrolfunctionsareindependentfromthetradingunits.

Settlementriskrelatedtofinancialderivativesaremanagedaspartoftheoverallcreditlimitsgrantedtocustomers.

Tocontrolthelevelofcreditrisktaken,theBankassessescounterpartiesusingthesametechniquesasforlending

decisions.

Thenotionalamountsofcertaintypesoffinancialinstrumentsprovideabasisforcomparisonwithinstruments

recognisedonthebalancesheetbutdonotnecessarilyindicatetheamountsoffuturecashflowsinvolvedorthe

currentfairvalueoftheinstrumentsand,therefore,donotindicatetheBank’sexposuretocreditorpricerisks.The

derivativeinstrumentsbecomefavourable(assets)orunfavourable(liabilities)asaresultoffluctuationsinmarket

interestratesorforeignexchangeratesrelativetotheirterms.Therefore,theextenttowhichthefinancialderivative

instrumentsarefavourableorunfavourablecanfluctuatesignificantlyfromtimetotime.




296 A n n u a l R e p o r t 2 0 0 8

Estimated fair value of financial instruments

Thefairvalueshavebeenestimatedbyusingavailablemarketinformationandappropriatevaluationmethodologies.

Fairvaluesoffinancialinstruments,togetherwiththecarryingvaluesshowninthebalancesheetsat31December

2008and2007wereasfollows:

Consolidated

2008 2007

Balance Balance

Carryingvalue Fairvalue Carryingvalue Fairvalue

(in million Baht)

Financialassets

Cash 11,317 11,317 10,289 10,289

Interbankandmoneymarketitems-net 72,587 72,587 20,760 20,760

Securitiespurchasedunderresaleagreements - - 27,800 27,800

Investments-net 83,983 85,661 96,346 97,324

Loansandaccruedinterestreceivable-net 381,666 381,666 416,807 416,807

Customers’liabilitiesunderacceptances 103 103 280 280

Totalfinancialassets 549,656 551,334 572,282 573,260

Financialliabilities

Deposits 450,297 450,752 465,462 465,766

Interbankandmoneymarketitems 9,299 9,300 24,993 25,011

Securitiessoldunderrepurchaseagreements - - 4,765 4,765

Borrowings 66,317 63,717 53,416 52,434

Bank’sliabilitiesunderacceptances 103 103 280 280

Totalfinancialliabilities 526,016 523,872 548,916 548,256





Consolidated

2008 2007

Balance Balance


(in million Baht)

Derivatives


Forwardforeignexchangeagreements

Bought50,983 1,077 46,572 (550)

Sold 52,766 (1,071) 49,842 619

FXoptions

Bought71 1 - -

Sold 344 (3) - -

Currencyswaps

Bought2,546 (449) 3,116 (435)

Sold 883 76 918 191


Interestrateswaps 164,739 1,937 122,049 548

Interestrateoptions 6,989 - 6,749 -

Swaptions - - 201 1




298 A n n u a l R e p o r t 2 0 0 8

Bankonly

2008 2007

Balance Balance


(in million Baht)

Financialassets

Cash 11,314 11,314 10,287 10,287

Interbankandmoneymarketitems-net 72,384 72,384 19,599 19,599

Securitiespurchasedunderresaleagreements - - 27,800 27,800

Investments-net 82,962 84,640 95,598 96,577

Loansandaccruedinterestreceivable-net 383,198 383,198 419,609 419,609

Customers’liabilitiesunderacceptances 103 103 280 280

Totalfinancialassets 549,961 551,639 573,173 574,152

Financialliabilities

Deposits 450,560 451,015 465,628 465,932

Interbankandmoneymarketitems 9,299 9,300 25,081 25,099

Securitiessoldunderrepurchaseagreements - - 4,765 4,765

Borrowings 66,342 63,742 53,215 52,233

Bank’sliabilitiesunderacceptances 103 103 280 280

Totalfinancialliabilities 526,304 524,160 548,969 548,309





Bankonly

2008 2007

Balance Balance


(in million Baht)

Derivatives


Forwardforeignexchangeagreements

Bought 50,983 1,077 46,572 (550)

Sold 52,766 (1,071) 49,842 619

FXoptions

Bought 71 1 - -

Sold 344 (3) - -

Currencyswaps

Bought 2,546 (449) 3,116 (435)

Sold 883 76 918 191


Interestrateswaps 164,739 1,937 122,049 548

Interestrateoptions 6,989 - 6,749 -

Swaptions - - 201 1




300 A n n u a l R e p o r t 2 0 0 8

Methodsandassumptionsinestimatingmarketvalueorfairvalueoffinancialinstrumentsareasfollows:

- Cashandinterbankandmoneymarketitems(assets)

Thefairvalueapproximatesthecarryingvalue.

- Securitiespurchasedunderresaleagreements


- Investmentsinsecurities-net

ThefairvalueofinvestmentsinsecuritiesisdisclosedinNotes4.9and5.3

- Loansandaccruedinterestreceivable

Thefairvalueisbasedonthecarryingvalueofloansandaccruedinterestreceivablenetofallowancefordoubtful

accountsasmostloansarefloatingrateloans.

- Customers’liabilitiesunderacceptances


- Deposits

Thefairvalueisbasedonthecarryingvalueofdeposits,exceptforthefairvalueoffixedratedepositswith

remainingmaturitiesgreaterthan1yearwhichisestimatedbyusingadiscountedcashflowcalculationapplying

interestratescurrentlybeingofferedonsuchorsimilardeposits.

- Interbankandmoneymarketitems(liabilities)

Thefairvalueisbasedonthecarryingvalueofinterbankandmoneymarketitems,exceptforthefairvalueof

fixedratedepositswithremainingmaturitiesgreaterthan1yearwhichisestimatedbyusingadiscountedcash

flowcalculationapplyinginterestratescurrentlybeingofferedonsuchorsimilardeposits.





- Securitiessoldunderrepurchaseagreements


- Borrowings

Thefairvalueapproximatesthecarryingvalueexceptforfixedrateborrowingswithremainingmaturitiesgreater

than1yearwhichiscalculatedbasedonthepresentvalueoffutureprincipalandinterestcashflows,discounted

atthemarketrateofinterestatthereportingdate.

- Bank’sliabilitiesunderacceptances


- Derivatives

Thefairvalueapproximatesthemarketvalue.

Operationalrisk

Operationalriskisdefinedastheriskoflossresultingfrominadequateorfailedinternalprocesses,peopleand

systemsorfromexternalevents.Thisdefinitionincludeslegalrisk,butexcludesstrategicandreputationalrisk.

TheBankhasdevelopedanOperationalRiskManagementFrameworktoensurethattheoperationalrisksare

properlyidentified,measured,monitored,reported,analysedandcontrolledinasystematicandconsistentmanner.

TheframeworkconsistsofanOperationalRiskGovernanceStructure,OperationalRiskManagementPolicieswhich

coverallBaselIIlosseventcategories,othersupplementarypolicies,andthreeOperationalRiskTools;ControlSelf

Assessment(CSA),KeyRiskIndicators(KRI),andLossDataCollectionandIncidentManagement.

BusinessandSupportUnitsareprimarilyresponsibleandaccountablefortheirownOperationalRiskManagement

andControl.TheBankhasappointedanumberofUnitOperationalRiskManagers(UORM)intheBusinessand

SupportUnitswho,withsupportfromtheOperationalRiskManagementDepartment,takeon/carryouttheOperational

RiskManagementresponsibilitiesoftheirrespectiveunits.




302 A n n u a l R e p o r t 2 0 0 8

OthermajorOperationalRiskMitigationPrograms/MechanismsincludeProductandServiceApprovalProcess

(PSAP),OutsourcingRiskManagement,andBusinessContinuityPlanning(BCP).

Toensurethatproductsandservicesareofferedinasafemanner,thePSAPisestablishedtosetguidelinesfor

sign-offandapprovalofnewproductsandservices.Thisduediligenceprocessensuresthattheriskscreatedbythe

newproductsandservicesareproperlyidentifiedandaddressedandthenecessaryinfrastructureandcontrolsare

inplacetosupportthenewbusiness.

TheBankhasestablishedtheOutsourcingRiskManagementPolicytosetouttheprinciplesandstandardsforthe

effectiveidentificationofthemajorriskscreatedbyoutsourcingandthemanagementofsuchrisks.

TheBankhasestablishedtheBusinessContinuityManagementPoliciesandStandardstoprovideguidanceand

standardsforallunitstodevelopaBCP.TheBusinessContinuityManagementOfficeissetuptooverseethe

implementationofBCMPoliciesandStandardsandmonitorBCMreadinessoftheGroupandleadtheco-ordination

ofgroup-wideBCPinitiativestoraisetheoverallBCPreadinessoftheBank.

5.26 SaleofloanstoThaiAssetManagementCorporation(“TAMC”)

InaccordancewiththeconditionsoftheEmergencyDecreeontheThaiAssetManagementCorporationB.E.2544,

theBankanditssubsidiariesenteredintoanAssetTransferAgreementwithTAMCin2001forsalesofsub-standard

qualityassetstoTAMCandtheBankanditssubsidiarieshadreceivedpromissorynotesfromTAMCforthetrans-

fers(seeNote5.3).Undertheagreement,TAMCandthetransferorsarejointlyresponsibleforsharingtheprofits

orlossesfromTAMC’smanagingofthenon-performingassets,inaccordancewiththeconditionsspecifiedinthe

agreements,attheendofthefifthyearandattheendofthetenthyearcommencing1July2001.

Inthecaseoflosses,thetransferorswillberesponsibleforthefirstportionoflosses,notexceeding20%ofthe

transferprice.Thesecondportionoflosses,notexceeding20%ofthetransferprice,willbeequallysharedbetween

TAMCandthetransferors.TheremaininglosseswillbeabsorbedbyTAMC.

Incaseofprofits,thefirstportionofprofits,notexceeding20%ofthetransferprice,willbeequallysharedbetween

TAMCandthetransferors.Shouldtherebeanyprofitsremaining,thetransferorsareentitledtotheremainingprofits

uptoanamountnotexceedingthebookvalueofnon-performingassetslessthetransferpriceandthetransferors’

shareinthefirstportionoftheprofits.

In2006,TAMCinformedtheBankanditssubsidiariesofitslosssharingattheendoffifthyearofBaht730

millionTheBankanditssubsidiarieshadrecognisedpotentiallosssharingfromTAMCofaboveamountasprovision

forcontingentliability.Inaddition,theBankhadbeeninformedofanadjustmenttothetransferredpricefornon-





performingassetsbeingpledgedmachineryofBaht4,341millioninNovember2006.TheBankdeniedsuchadjustment

withthereasonofdefaultonassetstransferringagreementdated12October2001byTAMC,thereforeitmaynot

forcebylaw.TheBank,howeverhadrecordedpotentiallossfromtheadjustmentofmachineryofBaht4,341million

asaprovisionforcontingentliability.

Atpresent,theBankhascommencedlegalproceedingsagainstTAMC.

Asat31December2008and2007,theBankanditssubsidiarieshaveestimatedthepresentvalueofexpectedloss

sharingfromTAMC(excludingprovisionforcontingentliabilityonanadjustmenttothetransferpriceforpreviously

pledgedmachinery,asdiscussedabove)asattheendofthetenthyearintheconsolidatedfinancialstatements

attheamountofBaht1,240millionandBaht1,228million,respectively,andintheBank’sfinancialstatementsat

theamountofBaht1,201millionandBaht1,198million,respectively,byconsideringthereportfromTAMConthe

statusoftransferredassetsandotherhistoricalinformationrelatedtonon-performingassetsmanagement.The

discountrateusedtocalculatethepresentvalueofexpectedfuturelossisequaltotherateofreturnonassetsor

financialinstrumentshavingsimilarproperties.Thecumulativeprovisionsforcontingentliability(includingprovi-

sionforcontingentliabilityonanadjustmenttothetransferpriceonpreviouslypledgedmachinery)isBaht5,857

millionintheconsolidatedfinancialstatementsandBaht5,818millionintheBank’sfinancialstatements.Forthe

yearended31December2008,theBankanditssubsidiariesrecognisedthepresentvalueofexpectedlosssharing

fromTAMCofBaht61millionasaninterestexpenseintheconsolidatedstatementofincomeandtheBank’sstatement

ofincome.

5.27 PhayathaiAssetManagementCompanyLimited

PhayathaiAssetManagementCompanyLimited(“thesubsidiary”)wasregisteredwiththeMinistryofCommerceon9

August2000andregisteredwiththeBankofThailandtooperateasanassetmanagementcompanyon1September

2000.TheBankholdsapproximately100%ofthesharecapitalofthesubsidiary.

At31December2008and2007,theBankhadobligationstoregisterthetransferofownershipofthetransferred

assets,referredtobelow.

Underconditionsoftheassettransfers,theBank(transferor)deliversthedocumentsrelatingtotheseassetstothe

subsidiarycompany(transferee)within30daysfromthetransferdate(thedatestatedinthecontracttotransfer

non-performingassets).Thecontractingpartiescanagreetoextendthedeliveryperiod.Thetransferorortransferee

hastherighttorevisethetransferpricesofsuchassetswithin180daysfromthetransferdate.




304 A n n u a l R e p o r t 2 0 0 8

The sale of assets by Phayathai Asset Management Company Limited

On3September2003,thesubsidiarysignedanagreementwithBangkokCommercialAssetManagementCo.,Ltd.(“BAM”)

forthesaleofassetsasmentionedabove.Theeffectivedateoftheassettransferwas30September2003.The

transferoftheassetsandtheirunderlyingsecuritieswasarrangedundertheprovisionsoftheEmergencyDecreeonAsset

ManagementCompany,B.E.2541(1998)allowingthefixingoftransferpricesasagreedbythesubsidiaryandBAM.

Atthetransferdate,BAMpaidthesubsidiarythetotalvalueoftheassetsintheformofanegotiablepromissory

noteissuedon30September2003foranamountofBaht19,533million,whichwasthenonperformingloans

amountofBaht16,634millionandthepropertiesforeclosedamountofBaht2,899million,withamaturitydateof30

September2015.Theinterestonthepromissorynotewasfixedatarateequivalenttotheweightedaverageinterest

ratesforalltypesofThaiBahtdepositsatthe5largestlocalcommercialbanks.Thefirstpaymentisdueonthe6th

anniversaryofthepromissorynoteissuingdatewhilesubsequentpaymentswillbeonayearlybasisafterthefirst

paymentuntilthematuritydate.Oneconditionwasthatendorsementonthepromissorynotebythetransferorto

negotiatethepromissorynotewithanypartyotherthantheTMBBankPublicCompanyLimited,theBankofThailand

ortheFinancialInstitutionsDevelopmentFundwasnon-exercisable.IncaseofBAM’sdecisiontogointoliquidation

beforethepromissorynote’smaturitydate,BAMisrequiredtotransfertherightsandobligatorycommitmentsover

thepromissorynotetoanotherjuristicpersonasconsentedtobythesubsidiary.

BoththesubsidiaryandBAMhavetherighttocallforanadjustmenttothepricesofthetransferredassetswithin

180daysfromthetransferdate.Thepriceadjustment,ifineffect,couldbedonebyissuinganadditionalpromissory

notebythesubsidiaryorbyBAMasthecasemaybe.

AnagreementwasmadebetweenthesubsidiaryandBAMthatrecognitionofprofitorlosswouldbecomputedat

theendofsixthyearandtwelfthyearafterthetransferdate.

Computationofprofitorlossfrommanagementistobemadeonthevaluereceivedfromthedebtcollectionprocess.

Thedebtcollectioncanbeaccumulatedonacashbasisuntilthecomputationdate,onlyonthedebtsthatarefully

settled.Therecognitionmustcomefromthevaluereceivedlesscostofeachassetatthetransferdate,administra-

tiveexpensesoneachofthedebtssettledandinterestexpenseonthepromissorynote.Attheendofsixthyear

andtwelfthyearfromthetransferdate,resultsofthemanagementofassetsundertheagreementmustbeshared

betweenBAMandthesubsidiary.Incaseofdebtsettlementdonethroughassettransfer,recognitionofprofitorloss

onlyoccursaftertheassetissuccessfullydisposedofftoclearthedebt.

Incaseofalossfromthemanagementofgroup1assets,thesubsidiarywillabsorbthelossofthefirst20%.The

next20%ofthelosswillbesharedequallyataratioof1:1betweenthesubsidiaryandBAM.Therestoftheloss

willbeabsorbedinfullbyBAM.





Incaseofalossfromthemanagementofgroup2assets;

(a) ifthetransferpriceswerenotatadiscount,thesubsidiarywillabsorbthelossofthefirst30%whilethenext

20%ofthelosswillbesharedequallyataratioof1:1betweenthesubsidiaryandBAM.Therestoftheloss

willbeabsorbedinfullbyBAM

(b) ifthetransferpriceswereatadiscountof5%,thesubsidiarywillabsorbthelossofthefirst25%whilethenext

20%ofthelosswillbesharedequallyataratioof1:1betweenthesubsidiaryandBAM.Therestoftheloss

willbeabsorbedinfullbyBAM.

(c) ifthetransferpriceswereatadiscountof10%,thesubsidiarywillabsorbthelossofthefirst20%whilethe

next20%ofthelosswillbesharedequallyataratioof1:1betweenthesubsidiaryandBAM.Therestofthe

losswillbeabsorbedinfullbyBAM.

(d) ifthetransferpriceswereatadiscountof15%,thesubsidiarywillabsorbthelossofthefirst20%whilethe

next20%ofthelosswillbesharedequallyataratioof1:1betweenthesubsidiaryandBAM.Therestofthe

losswillbeabsorbedinfullbyBAM.

Incaseofaprofitfromthemanagementofbothgroup1andgroup2assets,thefirstportionofnotmorethan20%

ofthetransferpriceswillbesharedequallyataratioof1:1betweenthesubsidiaryandBAMandtherestoftheprofit

willbetakenbythesubsidiary.However,thisportionmustnotbegreaterthanthemarginbetweenthebookvalue

andthetransferprices.Therestoftheprofit,ifany,willbetakenbyBAM.

Regardingthetransferofnon-performingassetstoBAMfrom30September2003totheendofyear2005,the

subsidiaryhastransferreditsloansandinvestmentinloansofvariouscategoriestoBAM.Theseassetswereinthe

formsofloansanddebts,bothsecuredandunsecured,aswellaspropertiesforeclosedandrelatedassets.The

totaltransferpricewasBaht19,712million.BAMpaidforthoseassetstothesubsidiaryintheformofanegotiable

promissorynoteandthesubsidiaryendorsedthesaidpromissorynotetotheBankinsettlementofalong-termloan

installment.

ThesubsidiaryandBAMagreedanadjustmentofBaht1,011milliontothesellingprice,acceptingtherecoveryof

NPLsandthepropertiesforeclosedtotheendof2005.Thesubsidiaryissuedapromissorynotetothetransferee

forBaht1,011millioninrespectoftheagreedadjustedprice.Thesubsidiaryiswaitingtoissueapromissorynoteto

BAMforBaht4million,whichisthedifferencearisingfromthesaleofpropertiesforeclosedin2003.Inthisregard,

thesubsidiaryhasrecordedtheinterestexpensesonthesaidpromissorynotesinthefinancialstatementsofthe

subsidiaryfortheyearsended31December2008and2007ofBaht17millionandBaht20million,respectively.




306 A n n u a l R e p o r t 2 0 0 8

Intheyear2006,thesubsidiaryandBAMmetregardingthelossclaimscalculationofthesubsidiaryclaimedbyBAM

onnon-performingassets(purchaseagreement)withbothpartiesagreeingtoexaminethelossclaimsbytheend

ofsixthyearortwelfthyearwithanoffsetbetweentheclaimamountandthecashpaymentbyBAMforpromissory

notesasnotedinthepurchaseandsaleagreementdated3September2003.

Asat31December2008and2007,theGroupestimatedthepresentvalueofexpectedlosssharingfromBAMasat

theendofthetwelfthyearattheamountofBaht3,390millionandBaht3,204million,respectively,byconsidering

thereportfromBAMonthestatusofassetstransferredfromthesubsidiaryandotherhistoricalinformationrelated

tonon-performingassetsmanagement.Thediscountrateusedtocalculatethepresentvalueofexpectedfuture

lossisequaltotherateofreturnonassetsorfinancialinstrumentshavingsimilarproperties.Fortheyearended

31December2008,theGrouprecognisedtheincreaseinprovisionforcontingentliabilityofBaht186millionasan

interestexpenseintheconsolidatedstatementofincome.

5.28 Goodwill

Asat30June2007,duetounfavourableresultsandasluggisheconomy,theBankreviewedthecarryingvalueof

goodwillinrespectofthebusinessestransferredfromDBSThaiDanuBankPublicCompanyLimited(“DTDB”)and

theIndustrialFinanceCorporationofThailand(“IFCT”)forimpairment.TheBankcomparedtheprojectednetbook

valueasat30June2007tothenetpresentvalueofforecastedfutureeconomicbenefitsderivedfromDTDBand

IFCTassumingthatbothfinancialinstitutionswerestillinoperation.TheBankalsohiredanindependentfinancial

advisertoadviseonthere-evaluationofthecarryingvalueofgoodwill.

TheBankprojectedthenetbookvaluesofDTDBandIFCTasat30June2007byadjustingtherespectivenetbook

valuesatthemergerdatebyallocatingpre-provisionprofitandshareholder’sequityitemssuchastheunrealised

gain/(loss)onrevaluationofinvestmentssincethemerger,basedonthenetloanproportionsofeachfinancial

institution.Specificbaddebts,doubtfulaccountsandotherexpensesweresimilarlyallocated.

InestimatingthenetpresentvalueofforecastedfutureeconomicbenefitsfromDTDBandIFCT,theBankconsidered

theexpectedeconomicgrowthofthecountry,itseconomicenvironment,preliminaryimpactestimationofBasel2

implementation,theperformanceandfinancialstatusoftheBankanditspeersandtheBank’sbusinesstargets.An

averagelong-termgrowthrateof6%wasassumedinthiscalculation.Therequiredrateofreturnfrominvestinginthe

Bankwasusedasadiscountrate,estimatedat14-15%,derivedfromtheCapitalAssetPricingModel(CAPM).

TheresultoftheimpairmentreviewrevealedthattheprojectednetbookvalueofDTDBandIFCTwashigherthan

thenetpresentvalueofforecastedfutureeconomicbenefits.TheBankthereforewroteofftheentireamountof

goodwillrelatingtoDTDBandIFCTasat30June2007.





5.29 NewregulationsrelatedtotheBank

On3August2008,theFinancialInstitutionBusinessesAct2008andtherelatednotifications,circularsandnoticesas

issuedbytheBankofThailandbecameeffective,asannouncedintheGovernmentGazetteon5February2008.

On11August2008,theDepositProtectionAct2008andtherelatednotifications,circularsandnoticesasissued

bytheBankofThailandbecameeffective,asannouncedintheGovernmentGazetteon13February2008.

Asat31December2008,compliancewithsuchlawsabovedoesnothaveanymaterialimpactontheconsolidated

andBankonlyfinancialstatements.

5.30 ThaiAccountingStandards(TAS)notyetadopted

TheGrouphasnotadoptedthefollowingrevisedTASthathavebeenissuedasofthebalancesheetdatebutarenot

yeteffective.TheserevisedTASwillbecomeeffectiveforfinancialperiodsbeginningonorafter1January2009.

TAS36(revised2007) ImpairmentofAssets

TAS54(revised2007) Non-currentAssetsHeldforSaleandDiscontinuedOperations

TheadoptionandinitialapplicationoftheserevisedTASisnotexpectedtohaveanymaterialimpactonthecon-

solidatedorBank’sfinancialstatements.

5.31 Reclassificationofaccounts

Taxpaidandinterestpaidarenowshownaspartofcashflowsfromoperatingactivities,andwithholdingtaxis

expensedandshownaspartofotherexpenses.Comparativeshaveaccordinglybeenreclassified.

308 A n n u a l R e p o r t 2 0 0 8

Financial statistics and results of operations

“As at 31 December 2008, 2007, 2006, 2005 and 2004” (MillionBaht)

2008 2007 2006 2005 2004

(Restated)

Assets

Cash 11,314 10,287 10,910 9,029 9,145

Interbankandmoneymarketitems-net 72,384 19,599 17,248 9,611 10,053

Securitiesperchasedunderresaleagreements - 27,800 25,500 - 12,000

Investments-net 82,962 95,598 116,909 107,509 94,509

Loansandaccruedinterestreceivable-net 383,198 419,609 517,859 527,122 479,262

Propertiesforeclosed-net 16,818 19,470 26,076 28,369 28,453

Customers’liabilitiesunderacceptances 102 280 358 377 924

Premisesandequipment-net 14,316 12,942 12,537 11,724 13,276

Accountsreceivable-net 11,150 8,653 5,562 4,045 4,251

Goodwill-net - - 12,594 13,307 14,019

Otherassets-net 7,145 4,913 5,136 2,993 4,718

Totalassets 599,389 619,151 750,689 714,086 670,610

Liabilitiesandshareholders’equity

Deposits 450,560 465,628 568,675 517,215 456,007

Interbankandmoneymarketitems 9,299 25,081 21,786 41,180 42,240

Liabilitiespayableondemand 3,297 3,610 3,518 1,611 1,221

Securitiessoldunderrepurchaseagreements - 4,765 - 14,000 -

Borrowings 66,342 53,215 93,271 72,690 112,455

Bank’sliabilitiesunderacceptances 102 280 358 377 924

Accruedinterestpayables 1,891 2,413 4,810 2,465 1,926

Provisionsofobligationfromthetransferrednon-performingassets 5,818 5,814 5,041 - -

Provisionsofobligation-others 4,559 2,878 869 - -

Accountpayables 5,414 8,275 1,437 8,945 4,800

Otherliabilities 7,850 3,870 3,763 4,753 5,886

Totalliabilities 555,132 575,829 703,528 663,236 625,459

Shareholders’equity 44,257 43,322 47,161 50,850 45,151

Totalliabilitiesandshareholders’equity 599,389 619,151 750,689 714,086 670,610

Off-balancesheetitems-contingencies

Avaltobillsandguaranteesofloans 3,610 5,236 7,277 8,797 7,722

Liabilitiesunderunmaturedimportbills 1,233 1,321 1,926 2,799 1,509

Lettersofcredit 27,691 22,282 13,358 9,131 12,980

Othercontingencies 359,929 321,159 321,150 250,699 183,839

Interestanddividendincome 29,181 33,429 36,052 25,846 17,162

Interestexpense 13,179 17,293 20,975 11,304 6,401

Netinterestanddividendincome 16,002 16,136 15,077 14,542 10,761

Baddebtsanddoubtfulaccounts 5,192 31,770 13,157 3,834 4,508

Lossondebtrestructuring(reversal) (122) (775) (1,401) (3,780) 912

Netinterestanddividendincome/(expense)afterbaddebts,

doubtfulaccountsandlossondebtrestructuring 10,932 (14,859) 3,321 14,488 5,341

Non-interestincome 5,745 2,121 3,919 5,657 4,429

Non-interestexpenses 16,386 31,173 19,661 12,255 8,772

Profit/(loss)beforeincometaxexpense 291 (43,911) (12,421) 7,890 998

Incometaxexpense 2 5 94 90 50

Netprofit/(loss) 289 (43,916) (12,515) 7,800 948

Basicearnings/(loss)pershare(baht) 0.01 (2.61) (0.87) 0.59 0.09

Ordinaryshares(millionshares) 41,536.7413 41,536.7413 16,536.7413 13,314.3020 13,314.3006

Numberofemployees 9,039 8,700 9,077 8,221 7,925

Numberofbranches 473 473 467 429 453

“*Startingfrom1January2007,theBankhaschangedtheaccountingpolicyforinvestmentinsubsidiarycompaniesandassociatecompaniesfromtheequitymethodtothecostmethod.


Results of Operations in 2008

TheBank’sBoardofDirectorshasreportedtheresultsoftheoperationsonfollows:

Amounts:Baht

Retaineddeficitbroughtforward (104,216,003,901)

Add:Netprofitfortheyearending31December2008 289,145,961

Amortizationofsurplusonfixedassetsrevaluation 61,971,455

Retaineddeficitcarriedforward (103,864,886,485)

BesidestheretaineddeficitofBht.103,865million,theBankalsohasdiscountonordinaryshares–netofBht.303,088

million.AccordingtothePublicCompaniesActB.E.2535andotherrelatedregulations.TheBankthereforeisunableto

makedividendpayment.

TheBank’sBoardofDirectorshasdecidedthattherewillbenodividendpayment.


310 A n n u a l R e p o r t 2 0 0 8

General Information

Company Information TMB Bank Public Company Limited (“TMB” or “the Bank”) conducts a financial services business in

accordance with the Commercial Banking Act and under the permission of the Ministry of Finance, the Bank of

Thailand, and other parties concerned.

Head Office : 3000 Phahon Yothin Road, Chomphon, Chatuchak, Bangkok 10900

Registration No. : 0107537000017

Telephone : +66 2299 1111

Facsimile : +66 2273 7640, +66 2299 2758

TMB Phone Banking : 1558

Website : http://www.tmbbank.com

Email : [email protected]

The Bank changed its name from “Thai Military Bank Public Company Limited” to “TMB Bank Public

Company Limited” as of 9 May 2005 and launched its new logo as of 24 May 2005.

As of December 31, 2008, the Bank’s registered capital was Baht 437,087,384,790 of which Baht

435,287,384,790 was paid up, divided into:

Ordinary shares 41,536,741,279 shares at par value of Baht 10 / share

Class B preferred shares 1,991,997,200 shares at par value of Baht 10 / share


1 Phayathai Asset Bangkok Finance Common Stock 107,000,000 107,000,000 100.00 0.00 Management Co., Ltd. Tel. 0-2354-5001, Fax 0-2354-5014 2 IFCT Advisory Co., Ltd. Bangkok Services Common Stock 1,000,000 999,993 99.99 11,560,105.83 Tel. 0-2242-3287, Fax 0-2273-7641 3 TMB Property Bangkok Real Estate Common Stock 10,000 9,993 99.93 4,169,342.92 Development Co., Ltd. Tel. 0-2299-1172, Fax 0-2242-3871 4 Designee For ETA Bangkok Support Common Stock 1,000 994 9.40 13,617.80 Contract Co., Ltd. Financial Tel. 0-2299-1670, Institution Fax 0-2242-3871 5 TMB Asset Bangkok Finance Common Stock 10,000,000 7,499,997 75.00 188,230,287.36 Management Co., Ltd. Tel. 0-2636-1800 , Fax 0-2636-1823 6 Siam Resort Fund Bangkok Property Unit Trust 110,037,778 61,903,241 56.26 587,487,153.00 Tel. 0-2649-2000, Fund Fax 0-2649-2107-8 7 Thai Orix Leasing Co., Ltd. Bangkok Finance Common Stock 60,000,000 27,578,880 45.96 382,748,243.35 Tel. 0-2231-0589, Fax 0-2231-0661, 02-231-0936 8 Thai Business Fund 2 Bangkok Property Unit Trust 250,000,000 80,000,000 32.00 246,944,000.00 Tel. 0-2670-4900, Fund Fax 0-2679-1820 9 Phayathai Property Fund Bangkok Property Unit Trust 60,000,000 17,999,900 29.99 179,998,073.09 Tel. 0-2636-1800 Fund 10 The Column Property Fund Bangkok Property Unit Trust 212,421,538 63,518,545 29.90 637,562,766.40 Tel. 0-2649-2000, Fund Fax 0-2649-2107-8 11 Witcorp Chemicals Co., Ltd. Bangkok Wholesale/ Preferred 29,570,818 7,736,557 26.16 11,836,073.49 Tel. 0-2440-0809, Retail Stock Fax 0-2440-0827

Company Head Type of Type of Paid-up Amount Percentage Amount Office Business Capital Capital (Share) (%) (Baht) Location (Share) (Share) (net of allowance for diminution in value)

TMB's ownership

Investment of TMB Bank Pcl. in other companies As at December 31, 2008 investments in companies in which the TMB Public Company Limited held more

than 10 % of the paid-up capital in each company were as follows:

312 A n n u a l R e p o r t 2 0 0 8

12 N D Group Feedmill Co., Ltd. Lumphun Wholesale/ Common Stock 120,000 30,000 25.00 0.00

Tel. -, Retail

Fax -

13 Wing Group Co., Ltd. Chiang Mai Wholesale/ Common Stock 9,000 2,250 25.00 0.00

Tel. 053-271071, Retail

Fax 053-331316

14 Rural Capital Partners Co., Ltd. Bangkok Finance Common Stock 1,000,000 175,000 17.50 257,250.00

Tel. 0-2318-3958,

Fax 0-2718-1851

15 Thai Chareonphol Phrae Production Common Stock 15,500 2,500 16.13 0.00

Industry Co., Ltd.

Tel. 054-581202,

Fax 054-581876

16 Thai Rating and Information Bangkok Services Common Stock 1,000,000 153,000 15.30 14,361,948.00

Service Co., Ltd.

Tel. 0-2231-3011,

Fax 0-2231-3681

17 Thai Business Fun 5 Bangkok Property Fund Unit Trust 220,000,000 30,000,000 13.64 179,319,000.00

Tel. 0-2670-4900,

Fax 0-2679-1820

18 Thai Business Fund 4 Bangkok Property Fund Unit Trust 870,318,647 97,145,065 11.16 546,304,984.99

Tel. 0-2670-4900,

Fax 0-2679-1820

19 M-HOME SPV 1 Co., Ltd. Bangkok Real Estate Common Stock 10,000 1,000 10.00 0.00

Tel. 0-2633-6950,

Fax 0-2633-6990

20 Wholesale Town Co., Ltd. Bangkok Transportation Common Stock 22,000 2,200 10.00 0.00

Tel. 0-2531-6860,

Fax 0-2532-3009

21 NAVA SC Securities Hongkong Finance Common Stock 95,075,925 9,507,592 10.00 0.00

Investment LTD.

Tel. 2822-6888,

Fax 2845-0971

22 M THAI Estate Co., Ltd. Bangkok Real Estate Common Stock 30,000,000 3,000,000 10.00 0.00

Tel. 0-2261-1144,

Fax 0-2261-1143

23 Paiboon Insurance Co., Ltd. Bangkok Services Common Stock 2,000,000 200,000 10.00 30,200,000.00

Tel. 0-2246-9635,

Fax 0-2246-9660-1

TMB's ownership

Company Head Type of Type of Paid-up Amount Percentage Amount Office Business Capital Capital (Share) (%) (Baht) Location (Share) (Share) (net of allowance for diminution in value)


Other referral parties

Share Registrar : Thailand Securities Depository Co., Ltd.

The Stock Exchange of Thailand Building

62 Ratchadapisek Road, Klongtoey

Bangkok 10110, Thailand

Tel. 0-2229-2800

Auditors: Mr. Supot Singhasaneh CPA Registered No. 2826

Or Mr. Winid Silamongko CPA Registered No. 3378

Or Mrs. Wilai Buranakittisopon CPA Registered No. 3920

Or Ms. Somboon Supasiripinyo CPA Registered No. 3731

KPMG Phoomchai Audit Ltd.

50th- 51st Fl., Empire Tower

195 South Sathorn Road, Yannawa Zone

Sathorn District, Bangkok 10120

314 A n n u a l R e p o r t 2 0 0 8

Auditor’s remuneration

• Audit fee

TheBankanditssubsidiariespaidremunerationtothefollowingparties:-

-Theexternalauditorfortheaccountingperiodof2008inatotalamountofBaht11,245,000

-Individualorbusinessthatisrelatedwiththeauditorandtheauditofficeoftheauditorintheprevious

accountingyearamountingtoBaht1,415,000

•Non-audit fee

TheBankanditssubsidiarycompaniespaidremunerationforotherservices,whichincludedthefee

forspecialaudit,consultingfeeforpreparinginformationfortheprospectusandotherconsultingfees

tothefollowingparties:

Theauditofficefortheaccountingyearended2008amountingtoBaht1,700,000andpayableinthe

futureduetotheagreementon incompleteauditservices inthepreviousaccountingyeartotaling

Baht900,000

Individualorbusinessthat isrelatedwiththeauditorortheauditoffice inthepreviousaccounting

yearamountingtoBaht4,500,000andpayableinthefutureduetotheagreementonincompleteaudit

inthepreviousaccountingyeartotalingBaht1,500,000.


Other factors which may impact the investors’ decision

Legal Dispute

Legal disputes in which TMB is defendant

As of December 31, 2008, TMB Bank Plc. (TMB) or its subsidiary was involved in one case of legal

dispute, which is not yet finalized. This could negatively affect the Bank’s assets in an amount of higher than 5%

of its shareholders’ equity as per financial statements, ending December 31, 2008. Details of the case are

summarized as follows:

Legal dispute between Luang Bumrung Limited Partnership and TMB

On August 7, 2000, Luang Bumrung Limited Partnership (“LBP”) which is a juristic person registered with

the Ministry of Commerce, with a registered capital of Baht 5 million, was the plaintiff bringing a lawsuit to the

Southern Bangkok Civil Court against DBS Thai Danu Bank Plc. (“DTDB”) (which has now merged with TMB,

hence all of the rights and obligations has been transferred to TMB) as the 1st defendant together with 16

directors with regards to the violation of guarantee agreement, and claimed for compensation of about Baht

140.261 billion. The court accepted only the claim against DTDB and dismissed the claim against all the directors.

Pursuant to the claim by LBP, LBP had contacted and entered into agreement with Bangchak Petroleum

Plc. (BCP) regarding oil purchase. DTDB, Ladprao Branch, by Mrs. Panee Boonnak (Mrs. Panee), is claimed to

have issued a letter of guarantee (L/G) to LBP to guarantee the trading of oil with BCP in an amount of up to Baht

200 million. Later, BCP informed LBP that an account for the trading of oil with LBP could not be opened as, upon

examination of the L/G, DTDB was not the issuer of the L/G. DTDB then requested to have the L/G returned to be

used in bringing a criminal case against its staff. LBP deems that DTDB’s denial of being the issuer of the L/G is

considered as a violation of the agreement with LBP and has caused damage to LBP.

DTDB defended the case that the L/G was fraudulently issued. Mrs. Panee, DTDB’s Assistant Branch

Manager, issued the L/G upon LBP’s request, without the due authorization of DTDB. Furthermore, as regards the

case which DTDB together with the public prosecutor were plaintiffs bringing a criminal case against Mrs. Panee,

the final judgment was passed and the court ruled that the L/G was a forgery. Therefore, in informing BCP that

DTDB was not the issuer of the L/G, DTDB could not be deemed as having violated the agreement and did not do

any harm to LBP.

On December 29, 2004, the Southern Bangkok Civil Court passed a judgment for the red case no. 10000/

2547 that the L/G used by LBP in the litigation was the L/G fraudulently issued by Mrs. Panee without the due

316 A n n u a l R e p o r t 2 0 0 8

authorization of DTDB. Moreover, the final judgment was already passed for the case which DTDB together with

the public prosecutor were plaintiffs bringing a criminal case against Mrs. Panee regarding the issue of the L/G.

The criminal court ruled that such L/G was a forgery and that DTDB was not the issuer of the L/G to LBP.

Therefore, DTDB did not have to be liable for the L/G. The Southern Bangkok Civil Court, in this regard, dismissed

the claim.

Later, on March 15, 2005, LBP appealed this judgment to the Appellate Court, and on August 31, 2005,

TMB defended the case. The Appellate Court has yet to decide the matter.

In this respect, the Bank’s Management deems that the claim against the Bank has little merit and is

unlikely to succeed; therefore, the Bank will not have to be liable for this case.

Legal disputes in which TMB is plaintiff

Apart from the above case, TMB is still engaged in another case of legal dispute in which the Bank is

plaintiff. In this regard, the Bank deems it suitable to inform the investors of the matter. Details of the case are

summarized as follows:

Legal dispute between TMB and Thai Asset Management Corporation (TAMC)

On April 2, 2007, TMB brought a lawsuit to the civil court against Thai Asset Management Corporation

(TAMC) and Financial Institution Development Fund (FIDF) as the 1st and 2nd defendants respectively with

regards to the violation of promissory notes and aval, claiming for compensation of about Baht 7.196 billion.

Pursuant to the case that DTDB and the Industrial Finance Corporation of Thailand (IFCT) entered into

asset transfer agreements with TAMC. Later, following the Bank’s merger with DTDB and IFCT, all of the rights

and obligations under these asset transfer agreements were transferred to the Bank.

Later, TAMC sent a letter requesting downward adjustment of the NPA transfer price comprising machinery

and/ or other assets pledged as guarantee on the basis that machinery and/ or other assets pledged as guarantee

were not legally perfected. TMB did not consent to this request and sent a letter contradicting such downward

adjustment. On July 20, 2006, TAMC informed TMB to return three promissory notes totaling about Baht 6.525

billion to TAMC, as TAMC would like to adjust the amount and redeem the notes via a partial payment. In this

respect, TAMC agreed to issue and deliver new promissory notes with aval provided by FIDF to TMB. Therefore,

the Bank returned the promissory notes to TAMC. However, TAMC did not comply with the agreement, i.e. TAMC

would not issue and deliver new promissory notes with aval provided by FIDF to TMB.

Moreover, on November 14, 2006, TAMC did not make debt repayment of about Baht 520 million to TMB,

refused to make a partial payment and revoked one promissory note with aval provided by FIDF for the partial

payment of the transfer price of the NPAs.


On April 2, 2007, the Bank therefore initiated legal proceedings against TAMC and FIDF to the Civil Court

to seek the following relief from the Court. Details are summarized as follows:

1. TAMC to issue a promissory note of about Baht 4.432 billion avaled by FIDF with a maturity date on

December 31, 2012 and with interest to be payable on the last business day of every year to TMB which is

entitled to the payment. If TAMC and FIDF fail to do this, they are required to jointly pay such amount plus

interest from the date of the court filing.

2. TAMC to issue a promissory note of about Baht 2.027 billion avaled by FIDF with a maturity date on

October 31, 2011 and with interest to be payable on the last business day of every year to TMB which is entitled

to the payment. If TAMC and FIDF fail to do this, they are required to jointly pay such amount plus interest from

the date of the court filing.

3. TAMC to issue a promissory note of about Baht 12 million avaled by FIDF with a maturity date on

February 28, 2013 and with interest to be payable on the last business day of every year to TMB which is entitled

to the payment. If TAMC and FIDF fail to do this, they are required to jointly pay such amount plus interest from

the date of the court filing.

4. TAMC and FIDF to jointly pay about Baht 520 million plus interest calculated from the average deposit

interest rate until the date of the court filing amounting to about Baht 15 million, hence a total amount of about

Baht 535 million plus interest from the date of the court filing onwards.

The case is now under the consideration of the Civil Court.

In this regard, if TMB loses the cases, its NPA transfer price will be adjusted downward by about Baht

4.341 billion. Therefore, the Bank has already recognized provisions on contingent loss in full amount.

318 A n n u a l R e p o r t 2 0 0 8

Credit rating agency Dec 31, 2008 Dec 31, 2007

TRIS Rating *

Baht

Long-term - Debt instrument A+ A

- Unsecured subordinated debt instrument A A-

Outlook Stable Stable

Standard & Poor’s

Foreign Currency

Long-term - Debt instrument BB+ BB+

- Hybrid tier 1 debt instrument B+ CC

Short-term - Deposits / Debt instrument B B

BFSR D+ D+

Outlook Stable Negative

Moody’s Investors Service

Foreign Currency

Long-term - Deposits Baa2 Baa2

- Hybrid tier 1 debt instrument B1 B1

Short-term - Deposits / Debt instrument Prime-2 Prime-2

Outlook Stable Stable

BFSR D- D-

BFSR outlook Stable Stable

Credit Rating on TMB


Credit rating agency Dec 31, 2007 Dec 31, 2006

Fit Rating***

Foreign Currency

Long-term BBB- BB+

Short-term F3 B

Subordinated Debenture BB+ BB

Hybrid tier 1 debt instrument BB- B

BFSR C/D D

Supporting Rating Floor BB BB

Support Rating 3 3

Outlook Negative Rating watch

evolving

Domestic

Long-term A+(tha) A(tha)

Short-term F1(tha) F1(tha)

Subordinated Debenture A(tha) A-(tha)

Outlook Stable Rating watch

evolving

Note:

1. On 16 July 2008, TRIS Rating upgrade the Bank rating to “A+” from “A”, subordinated debentures

to “A” from “A-”.

2. On 2 January 2008, S&P rating on Hybrid Tier 1 Securities was lowered to “D” from “CC” following

the Bank’s announcement of non-payment of Hybrid Tier 1 interest for December 2007.

However, on 22 January 2008, S&P raised Hybrid Tier 1 securities rating to “B+” from “D”, reflecting

expectations that the Bank will pay the coupon on Hybrid Tier 1.

On 8 December 2008, S&P revised the outlook on TMB Bank from “Negative” to “Stable”, supported by

the bank’s strengthened management team and its improve financial profile.

3. On 23 January 2008, Fitch Rating upgraded ratings on Long-term foreign currency Issuer Default Rating

(IDR) to “BBB-” from “BB+” with “Stable” outlook, Short-term foreign currency IDR to “F3” from “B”, and

Foreign currency subordinated debt to “BB+” from “BB”, Hybrid Tier 1 to “BB-” from “B”, Individual to “C/D”

from “D”, National Long-term rating to “A+(tha)” from “A(tha)” with “Stable” outlook, and National

subordinated debt to “A(tha)” from “A-(tha)”.

On 2 December 2008, Fitch Ratings revised the international rating outlooks of TMB from “Stable” to

“Negative”. This action followed the revise of the outlook of Thailand’s Long term foreign and local currency

Issuer Default Rating (IDRs) from “Stable” to “Negative”.

320 A n n u a l R e p o r t 2 0 0 8

1 MINISTRYOFDEFENCE 0-2222-1215,0-2221-7736 0-2224-7406

2 KRATHUMBAEN 0-3484-8968,8971,0-3484-8977-9 Allnumbers

3 KRUNGKASEM 0-2222-5158-9,7801,5724 0-2222-5667

4 KLUAYNAMTHAI 0-2712-4048-51 Allnumbers

5 ROYALTHAIARMYHEADQUARTERS 0-2280-1537,1799 0-2280-1537

6 ROYALTHAINAVYHEADQUARTERS 0-2891-0051-5 Allnumbers

7 ROYALTHAIAIRFORCEHERADQUARTERS 0-2531-8560-2 0-2531-8561

8 SUPREMECOMMANDHEADQUARTERS- 0-2575-6425-7 Allnumbers

CHAENGWATTHANA

9 KHLONGCHUN 0-2377-1370,9737 0-2377-1360

10 KHLONGTOEI 0-2249-1518,1831 0-2249-1619

11 KHIRLAI 0-2588-1418,1778 0-2588-1418

12 NGAMWONGWAN 0-2588-0021,0023 0-2588-3148

13 CHARANSANITWONG 0-2424-0087,5520-1 0-2435-2393

14 CHAENGWATTHANA 0-2574-0203-5,0097 0-2574-0205

15 CHONGNONSI 0-2285-3939-44 0-2285-3944

16 CHOKCHAI4 0-2538-3125,3126 0-2539-2165

17 SOILANGSUAN 0-2652-2090-4,0-2652-2096-7,0-2652-1762,0-2652-1726 0-2652-2095

18 CENTRALRATANATHIBET 0-2525-4570-4 Allnumbers

19 DAOKHANONG 0-2476-6561-2,3840-1,0-2476-3631,0-2468-0429 Allnumbers

20 TRIPHET 0-2221-1371,2908 0-2221-8706

21 TALADNOI 0-2236-1004,0-2235-3436-7 0-2235-3436

22 TALADPONGPHET 0-2953-3901-5,0-2953-3907,0-2580-9859-60,0-2589-3228 0-2953-3906

23 TALADPHLU 0-2465-9949-9955-6,0-2465-9987 Allnumbers

24 TALADSIMUMMUEANG-RANGSIT 0-2536-4173-7 Allnumbers

25 TALINGCHAN 0-2880-8070-3 Allnumbers

26 TAOPOON 0-2585-1123,0-2587-8990-1 0-2585-1233

27 THANONCHOMTHONG 0-2476-5965,3951,4203 0-2476-3886

28 THANONCHAN 0-2213-2540-3,1308-9 0-2213-2541

29 THANONCHEANGWATTANA 0-2584-5549-50,0-2583-9996-7,0-2962-1695-8 0-2584-5548

30 THANONTIWANON 0-2950-0251-5,0-2591-0390 0-2591-0390

31 THANONTHEPARAK 0-2383-5618-20,0-2393-5968 0-2383-5620

32 THANONTHEPHARAKKM.12 0-2312-2123-5,0-2312-2440-1,0-2312-2621 0-2312-2126

33 THANONTHEPHARAKKM.22 0-2706-0992-8 Allnumbers

34 THANONTHEPARAKKM.3 0-2753-2860-6 0-2753-2864

35 THANONBOROMMARAT–CHONNI 0-2434-9791-3,0-2886-5433-4 Allnumbers

36 THANONBANGNA-TRATKM.4 0-2398-8116,0-2398-8230-1,0-2744-1214-6,0-2398-8224 0-2744-1213

NO. OFFICE TEL. FAX.

List of TMB’s Branches in Bangkok






37 THANONPRACHARAT-NONTHABURI 0-2525-3074-5,0-2967-5501-5,0-2526-5836 0-2526-3526

38 THANONPRACHAUTHIT 0-2870-9124-8 0-2870-9125

39 THANONRAMAIX 0-2643-0212,0383-4,0-2643-0398-9 0-2643-0212

40 THANONRAMAIX-THANONSERI7 0-2718-2743-8 Allnumbers

41 THANONPHAHONYOTHINSAPANMAI 0-2972-5583-7 0-2972-5587

42 THANONPHATTHANAKAN 0-2722-6845-9 Allnumbers

43 THANONPHIBUNSONGKHRAM 0-2526-2020-2 0-2526-2022

44 THANONPHETCHAKASEM-BANGKHAE 0-2413-0922-3,0-2413-0932,0-2804-5450-1,0-2454-2869 0-2804-6001

45 THANONPHETCHAKASEM-NONGKHAEM 0-2431-0308-12,0-2810-6874-5 0-2431-0313

46 THANONNEWPHETCHABURI 0-2319-1520-24,1450 0-2319-1522

47 THANONRATCHADAPHISEK-NANGLINCHI 0-2678-0164-7,0-2285-3493,0-2285-3237 0-2678-0168-9

48 THANONRATTANATHIBET 0-2921-8740-4 Allnumbers

49 THANONRAMAINTRAKM.6 0-2509-3211-7,0-2944-2373-4 0-2509-3218

50 THANONWATKINGKAEO 0-2312-4703,0-2750-1920-3,1875 0-2750-1923

51 THANONSRINAKARIN-TARA 0-2320-0098,0-2322-0691 0-2320-0099

52 THANONSRINAKARINTARA-LASALLE 0-2748-7484-6 0-2748-7483

53 THANONSETTHAKIT1-SAMUTSAKHON 0-3481-5609-13 0-3481-5608

54 THANONSONGPRAPHA 0-2929-7100-1,7103-4 0-2929-7100-1

55 THANONSAMAKKHI 0-2574-6291,0-2980-0401 0-2574-6221

56 THANONSAILUAT-SAMUTPRAKAN 0-2389-5021-2,0-2389-5063-4,0-2389-3746-7,0-2701-6695 0-2389-3302

57 THANONSUKSAWAT-RATBURANA 0-2428-4507-11,0-2428-4386,0-2872-0023-4 0-2428-4387

58 THANONSUKHAPHIBAN1 0-2509-1062-7,0-2946-8793-4 0-2509-1068

59 THANONSUKHAPHIBAN2 0-2704-8156-8 0-2704-8159

60 THANONSUKHAPHIBAN3 0-2735-2581-4 0-2735-2585

61 THANONSUKHUMWITKM.28-SAMUTPRAKAN 0-2702-3418-21,0-2702-3424-25 0-2702-3426

62 THANONSUKHUMWIT-SAMRONG 0-2394-5858-9,0-2756-8082,0-2756-9013-4,0-2384-4330 0-2384-2856

63 THANONLUANG-WORACHAK 0-2226-4780-7 0-2226-4788

64 THANONEKKACHAI 0-2893-2040-5 Allnumbers

65 THONGLO 0-2390-0437-40,0-2712-7625-6 0-2392-3496

66 THAPHRA 0-2869-0910-6 0-2869-0915

67 DONMUANGAIRPORT 0-2504-2684-5,0-2535-2455-6,0-2535-2458-9 Allnumbers

68 SUVARNABHUMIAIRPORT 0-2134-1818-21 0-2134-1878

69 THAMMASAT-RANGSIT 0-2516-9968,9970-73 0-2516-9973

70 THATTHONG 0-2391-3146,0-2392-3495 0-2392-3495

71 NAKORNCHAISRI 0-3422-8338-342 Allnumbers

72 BANGKAPI 0-2375-7556,7558,6347 0-2375-7558

322 A n n u a l R e p o r t 2 0 0 8




73 BANGKHUNNON 0-2424-2826,2829,2832,0-2424-5740,2322 Allnumbers

74 BANGKHEN 0-2513-2805,2807 0-2513-3132

75 BANGKHAE 0-2454-8110-8112 0-2454-8110

76 BANGCHAK 0-2332-9290-2 0-2332-9294

77 BANGNA 0-2398-4859-60,4862-3 0-2398-4864

78 BANGBON 0-2451-0630-4 0-2451-0633

79 BANGBUA 0-2972-9693-9 0-2972-9694

80 BANGBUATHONG 0-2920-2510-4 0-2920-2513

81 BANGPHO 0-2585-6400,6594 0-2585-6594

82 BANGRAK 0-2237-1844,2620 0-2266-4115

83 BANGLAMPHU 0-2282-5040,5021 0-2282-5395

84 BOBAE 0-2225-2823,4255 0-2222-3631

85 PATHUMTHANI 0-2581-1740-2,2156 0-2581-2155

86 PRACHANIWET1 0-2953-8160-2,8164 0-2953-8163

87 PRATUNAMPHRAIN 0-3521-9784-8 0-3521-9789

88 POMPHRACHULACHOMKLAO 0-2425-8499,8204-5 0-2425-8499

89 PAKKRET 0-2583-7153,8220 0-2583-4435

90 PAKKHLONGTALAD 0-2222-5828,5826 0-2222-5809

91 POOCHAOSAMINGPRAI 0-2394-6317,4412 0-2384-1673

92 PHAYATHAI 0-2246-0020 0-2245-8898

93 PHRAKHANONG 0-2381-1117-8 0-2381-1117

94 PHRAPRADAENG 0-2463-3872-4,3725 0-2463-3909

95 PHRAPINKLAO 0-2433-3370-2,0-2433-5406,0-2883-2884-6,0-2433-7051 0-2433-5407

96 PHRANNOK 0-2412-2764,3040 0-2412-3527

97 PATPONG 0-2236-9395-9 0-2236-0112

98 PHUTTHAMONTHON 0-2441-9392,0120 0-2441-9392

99 PENINSULAPLAZA 0-2253-0067-8,0-2253-9756-7,0-2253-4837 0-2253-9755

100 MAHAPRUTHARAM 0-2238-5029-31,0-2233-7035 0-2233-6999

101 KASETSARTUNIVERSITY 0-2561-4289,4290 0-2561-4289

102 THAMMASAT-THAPHRACHAN 0-2225-8186-8 Allnumbers

103 PHRANAKHONRAJABHATUNIVERSITY 0-2522-6187-9 Allnumbers

104 RAMKAMHAENG-HUAMAK 0-2369-1820-2 Allnumbers

105 MAHBOONKRONGCENTER 0-2217-9233-34,0-2215-2136-7 0-2215-2136

106 MINBURI 0-2517-1221-2 0-2517-3779

107 MUANGMAIBANGPHLI 0-2312-8268-70,0-2740-0208-9 0-2312-8270

108 YANNAWA 0-2289-2612,0-2289-4337,0-2291-3464,0-2688-1510 0-2291-3465



109 YAWARAJ 0-2225-9453,7290 0-2225-8254

110 PHRAMONGKUTKLAOHOSPITAL 0-2354-7878,0-2354-7880-4 0-2354-7877

111 SOMDEJPHRAPINKLAOHOSPITAL 0-2468-9844,0-2460-0269-70 0-2476-3061

112 RANGSIT 0-2959-2090-3 Allnumbers

113 RANGSIT-KHLONG3 0-2990-9130-5 Allnumbers

114 RANGSIT-PATHUMTHANI 0-2516-8892-4,0-2516-8686,0-2958-1007-9,0-2516-2908 0-2516-8551

115 RATCHADAPHISEK-HUAIKHWANG 0-2692-3105-8 0-2692-3109

116 RAJDAMNERN 0-2222-3131-40 0-2224-3216

117 RAJPRASONG 0-2252-6689-91,0-2253-3132-3 0-2252-6967

118 RAJAWONGSE 0-2221-0599,0-2225-3721,0-2226-3324-5,0-2222-0478 0-2226-3323

119 RAMKHAMHAENG 0-2377-2892-3,0-2375-7932,0-2732-9137,0-2732-0962 0-2375-7931

120 RARMINTRAKM.4 0-2973-0741-4 0-2973-0741

121 RARMINTRAKM.8 0-2519-3579-80 0-2519-3581

122 BANGKOKHOSPITALSOISOONVIJAI 0-2369-2657-9 0-2369-2659

123 BANGKOKHOSPITALDENTAL 0-2319-0674-9 0-2319-0680

CENTERBUILDING

124 ST.LOUISHOSPITAL 0-2212-6300-2,0-2675-7904-9 0-2212-6303

125 BHUMIBOLADULYADEJHOSPITAL 0-2532-2854-7,0-2531-6278 0-2531-6278

126 LATKRABANG 0-2739-1820-5 Allnumbers

127 LATPHRAO103 0-2370-3165-70 Allnumbers

128 LATPHRAO124 0-2514-0802,0-2539-7220 0-2514-0562

129 LATPHRAO42 0-2938-3260-3 Allnumbers

130 LATPHRAO6 0-2511-1819,0-2511-3982-3,0-2513-0779,0-2513-4052 0-2513-8112

131 LATPRAOSOI136 0-2378-1300,0-2374-4616-7,0-2378-0792,0-2374-5496 0-2374-5001

132 LATYA 0-2437-1078,1147 0-2439-1064

133 LANDMARKPLAZA 0-2255-8430-4 Allnumbers

134 WONGWIENYAI 0-2472-1432,0-2890-0361-2 Allnumbers

135 WANGBURAPA 0-2221-5121-5,0-2222-6583,0-2623-8830-4,0-2223-9870-1 0-2221-5125

136 SRIYAN 0-2241-3865-6,0-2243-1446-7 0-2243-0664

137 SIRIRAJ 0-2411-3548,3552 0-2411-3552

138 POOCHAOSAMINGPRAI 0-2384-6333-34,5282 0-2384-4697

SHOPPINGCENTER

139 METROSHOPPINGCENTER 0-2252-9014,9009-10,0-2254-1288-9 Allnumbers

140 WARARATSHOPPINGCENTER 0-2287-0961-2,3683-5 0-2287-0961

141 CHATUCHAKPARKSTATION 0-2624-4600 Allnumbers

142 SANAMPAO 0-2270-0252,0-2278-5240-1 0-2270-0252



324 A n n u a l R e p o r t 2 0 0 8


143 SANAMSUAPA 0-2281-6181,0-2282-3269 0-2282-6099

144 SAMUTPRAKAN 0-2389-5917-8,5895-7 0-2389-5896

145 SIAMSQUARE 0-2252-6049,0-2251-3797,0-2251-7672,0-2251-5714-5 0-2252-5856

146 SUANCHATUCHAK 0-2272-4415-6,4233-35 0-2271-4499

147 KRUNGTHONBRIDGE 0-2424-2577,0-2434-3536 0-2424-5939

148 SAPHANKHWAI 0-2278-2090-2,0-2278-2122,0-2279-2268,0-2618-4755-6 0-2279-0413

149 SAPHANNONTHABURI 0-2976-5500-5 Allnumbers

150 SAPHANLUANG 0-2216-9650-2,2526-7 0-2216-2527

151 SAPANMAIDONMUEANG 0-2521-3007-8,2559 0-2521-5377

152 SATHUPRADIT 0-2295-4217-8,0-2294-5510 0-2294-4021

153 SAMPHRAN 0-3431-1282-3 0-3432-4915

154 SAMYAKFAICHAY 0-2866-6956-60 Allnumbers

155 SAINAMTIPSUKHUMVIT 0-2258-0047-8,0-2260-2834-7,0-2663-4226-8 0-2259-3035

156 HEADOFFICE(PHAHONYOTHINOFFICE) 0-2299-1111,0-2273-7020 0-2273-7121

157 SAMRONG 0-2384-0352,4661 0-2384-4653

158 SIYAKSOIONNUJ-THANONSRINAKARIND 0-2321-6924-6,0-2322-6091-2,0-2720-5161-3 0-2322-6093

159 SIYAKTHANONBANGKHUNTHIAN- 0-2415-0151-3,0-2416-5304-6,0-2415-0155,0-2416-0041 0-2415-0154

THANONRAMA2

160 SILOM 0-2236-9500,4452-3,0-2236-4410,4432 0-2236-4410

161 SILOMSOI7 0-2230-5000 0-2230-5194

162 SUKHUMWIT11 0-2253-0334,0-2651-0243,0-2254-1330-2 0-2651-0242

163 SUKHUMVIT71 0-2711-3080-1,0-2711-3083,0-2391-6514,0-2391-0708 0-2392-0312

164 SURAWONG 0-2266-5230-3,0-2235-9015,8999 0-2236-3651

165 SENANIKOM 0-2570-0874,1386-7 0-2570-1710

166 NONGCHOK 0-2543-1308,1344 0-2543-1346

167 LAKSONG 0-2801-4291-5 0-2801-4291

168 HUAIKHWANG 0-2274-3200-5,0-2690-2606 0-2274-3206

169 HUAMAK 0-2718-8057-8 0-2718-8058

170 ASOK 0-2259-3312-4,0-2261-6653-5 0-2261-6654

171 ONNUT 0-2333-0395-9 0-2333-0399

172 AOMYAI 0-2810-3325-9 Allnumbers

173 INDRA-PRATUNAM 0-2208-0981-2 0-2208-0981

174 INTHRARAK 0-2374-0290-5 0-2374-0293

175 UDOMSUK 0-2383-9223-7 0-2383-9227

176 EKKAMAI 0-2381-7088-90,0-2711-4548 0-2381-7092





1 PROVINCIALELECTRICITYAUTHORITY 0-2591-1424-6 Allnumbers

SUB-BRANCH

2 KHLONGTANSUB-BRANCH 0-2717-9411-5 Allnumbers

3 J.J.MALLCHATUCHAKSUB-BRANCH 0-2265-9556-8 0-2265-9558

4 CENTRALBANGNASUB-BRANCH 0-2745-7263-5 Allnumbers

5 CENTRALPINKLAOSUB-BRANCH 0-2433-1386-7,1390 Allnumbers

6 CENTRALRAMAIISUB-BRANCH 0-2872-4564-5 0-2872-4566

7 CENTRALRAMAIIISUB-BRANCH 0-2213-0203-5 Allnumbers

8 CENTRALPLAZALADPRAOSUB-BRANCH 0-2937-0356-8 0-2937-0358

9 CENTRALWORLDPLAZASUB-BRANCH 0-2646-1284-6 0-2646-1286

10 ZEERRANGSITSUB-BRANCH 0-2992-6370-2 0-2992-6372

11 THEPLATINUMFASHIONMALLSUB-BRANCH 0-2121-9241-3 Allnumbers

12 THEMALLBANGKAPISUB-BRANCH 0-2704-7727-7 0-2704-7729

13 THEMALLBANGKAESUB-BRANCH 0-2454-9433.4 0-2803-8325

14 THANONCHAROENNAKORNSUB-BRANCH 0-2862-4910-4 0-2862-4914

15 TOPSROBINSONSILOMSUB-BRANCH 0-2652-5165-7 0-2652-5167

16 TESCOLOTUSNAVANAKORNSUB-BRANCH 0-2909-0829-31 0-2909-0831

17 BANGKHRUSUB-BRANCH 0-2819-2165-9 Allnumbers

18 BANGSUESUB-BRANCH 0-2911-3142-6 Allnumbers

19 BANGPHLADSUB-BRANCH 0-2424-5221,6499,0-2423-0230 Allnumbers

20 BIGC-THANONRAMA2SUB-BRANCH 0-2416-7806,7881 Allnumbers

21 FUTUREPARKRANGSITSUB-BRANCH 0-2958-0930-2 0-2958-0932

22 FASHIONISLANDSUB-BRANCH 0-2992-6370-2 0-2992-6372

23 BANGKOKUNIVERSITY-RANGSIT 0-2516-8492-4 Allnumbers

CAMPUSSUB-BRANCH

24 CHANDRAKASEMRAJABHATUNIVERSITY 0-2513-1700,0-2513-7264-5 Allnumbers

SUB-BRANCH

25 DHONBURIRAJABHATUNIVERSITY 0-2465-5690,5744 Allnumbers

SUB-BRANCH

26 RAMKHAMHAENGUNIVERSITY– 0-2397-7047-9 Allnumbers

BANGNACAMPUSSUB-BRANCH

27 SRINAKHARINWIROTUNIVERSITY- 0-2260-5734-6 Allnumbers

PRASANMITSUB-BRANCH

28 SRIPATUMUNIVERSITYSUB-BRANCH 0-2579-2268,6094,8473 Allnumbers

29 SIAMUNIVERSITYSUB-BRANCH 0-2868-5338,5375,5932 Allnumbers

30 MUANGTHONGTHANISUB-BRANCH 0-2504-5141-3 Allnumbers

31 SUVARNABHUMIFREEZONESUB-BRANCH 0-2134-1851-3 0-2134-1874

32 SUVARNABHUMIAIRPORTFL.2ARRIVAL 0-2134-1804-6 0-2134-1876

SUB-BRANCH

33 SUVARNABHUMIAIRPORTFL.4 0-2134-1827-8 0-2134-1877

DEPARTURESUB-BRANCH

34 SUVARNABHUMITHAIAIRWAY 0-2134-1848-50 0-2134-1873

TECHNICALSUB-BRANCH

35 SUVARNABHUMIAOBSUB-BRANCH 0-2134-1845-7 0-2134-1875

36 COLUMNTOWERRATCHADAPISEK 0-2259-7712-4 0-2259-7714

SUB-BRANCH

37 INDRASQUARESUB-BRANCH 0-2631-9457-9 0-2631-9459


Sub-branches

326 A n n u a l R e p o r t 2 0 0 8

KRABI

1 KRABI 0-7561-2718-20 0-7561-2719

2 PLAIPHRAYA 0-7568-7018-9 0-7568-7019

3 LUMTHAP 0-7564-3595-7 0-7564-3599

4 KOLANTASUB-BRANCH 0-7568-4224,4337,4344 0-7568-4350

5 AUONANGKRABISUB-BRANCH 0-7563-7657,7624,7596 0-7563-7685

KANCHANABURI

6 KANCHANABURI 0-3451-1677,2441 0-3451-2442

7 THARUA 0-3456-1822,2046,1745 0-3456-1745

8 KANOKPHETKANCHANABURI 0-3462-3736-8 0-3462-3738

SUB-BRANCH

KALASIN

9 KALASIN 0-4381-2133-5 0-4381-2134

KAMPHAENGPHET

10 KAMPHAENGPHET 0-5571-3801-3 0-5571-3803

11 SALOKBATSUB-BRANCH 0-5572-6258-60 Allnumbers

KHONKAEN

12 KHONKAEN 0-4324-1497-9,1618 0-4324-2053

13 CHUMPHAE 0-4331-1170,1270 0-4331-2470

14 THANONMITTRAPHAPKHONKAEN 0-4332-4861-6 0-4332-4867

15 THANONSRICHAN-KHONKAEN 0-4324-6490-2 0-4324-6492

16 BANPHAI 0-4327-2750,2790,2733 0-4327-2790

17 MUANGPHON 0-4341-4060-1 0-4341-4762

18 FAIRYPLAZAKHONKAENSUB-BRANCH 0-4332-1217,1237,1257 Allnumbers

CHANTHABURI

19 CHANTHABURI 0-3931-1799,1777,0-3932-1215 0-3931-1777

20 THANONBENJAMARACHUTIT- 0-3932-2150,0-3932-2051,0-3932-2152-3,0-3935-1154-7 0-3932-2053

CHANTHABURI

21 NONGKHLA 0-3939-5471-3 0-3939-5474

CHACHOENGSAO

22 THANONMAHAJAKKAPAD- 0-3851-1912,0-3851-2390,0-3881-2652-5,0-3851-4322 0-3851-2549

CHACHOENGSAO

23 THANONSUKPRAYUN- 0-3882-3795-7 0-3882-3796

CHACHOENGSAO

24 BANGKHLA 0-3854-1123,0-3854-1208,0-3854-1690,0-3882-7231-3 0-3854-1689

25 BANGWUA 0-3853-8255,8277,9003 0-3853-8255

26 PLANGYAO 0-3858-9132-3 0-3858-9133

27 PHANOMSARAKHAM 0-3883-6516-9 Allnumbers

28 GATEWAYCITYINDUSTRIALESTATE 0-3857-5662-4 0-3857-5664

SUB-BRANCH


List of TMB’s Branches in Upcountry



CHONBURI

29 JOMTIEN 0-3823-2079,2973,2086 0-3823-2080

30 CHONBURI 0-3827-2984-5,4088-9 0-3827-4089

31 BANGPLASOI-CHONBURI 0-3827-3579-81,0-3827-6579 0-3827-3578

0-3827-8717-8,0-3827-6564

32 BANGLAMUNG 0-3872-7046-7,7060 0-3872-7046

33 BANSUAN-CHONBURI 0-3879-9301-4,0-3879-9405-6 0-3879-9301

34 PHANATNIKHOM 0-3847-3168-9 0-3847-3169

35 PATTAYA 0-3842-2966,0816,1005 0-3842-9501

36 PATTAYAKLANG 0-3841-1935-7 Allnumbers

37 THANONTHAPPHRAYAPATTAYA 0-3830-3778-80,3877

38 THANONSUKHUMVIT-CHONBUR 0-3826-0960-3 Allnumbers

39 ROYALGARDEN 0-3842-5011-2,0-3841-1751,0-3871-0401-3 0-3841-1752

40 SIRACHA 0-3831-3239-40,1824 0-3831-3240

41 SATTAHIP 0-3843-7339,7123,7678 0-3843-7678

42 NONGMON 0-3839-2065-7 0-3839-2065

43 HUAGUNJAE-BANBUENG 0-3820-1026,1211-2 0-3820-1212

44 AOU-UDOM 0-3835-1642-3,1744 0-3835-1643

45 SOIBUAKHAOPATTAYASUB-BRANCH 0-3872-0092,0099 0-3872-0083

46 SUNSHINEPATTAYASUB-BRANCH 0-3837-1440-2 0-3837-1442

47 NIKHOMAMATANAKORNCHONBURI 0-3871-7588-9 Allnumbers

SUB-BRANCH

48 PAKRUAMBORWINSUB-BRANCH 0-3833-7949-50 0-3833-7951

49 KASETSARTUNIVERSITYSRIRACHA 0-3876-8970-1 0-3876-8972

SUB-BRANCH

50 SAHAPATTANASRIRACHA 0-3833-7949-51 0-3833-7951

INDUSTRIALPARKSUB-BRANCH

51 HOMEWORKSPATTAYASUB-BRANCH 0-3837-4943,4945 0-3837-4948

CHAINAT

52 CHAINAT 0-5641-1118,1564,2382 0-5641-1118

CHAIYAPHUM

53 CHAIYAPHUM 0-4481-1659,1666,0-4482-2123 0-4481-1659

CHUMPHON

54 CHUMPHON 0-7750-2544-5,4960 0-7750-2544

55 THUNGTAKO 0-7753-6122,0-7758-5209 0-7753-6007

56 LANGSUAN 0-7754-1233,1244,1894 0-7754-1333

CHIANGRAI

57 CHIANGRAI 0-5371-1100-1,7515-6 0-5371-3590

58 DOIMAESALONG 0-5376-5159-60 0-5376-5160

59 THANONPHAHONYOTHIN- 0-5371-4886-7 0-5371-4890

CHIANGRAI




328 A n n u a l R e p o r t 2 0 0 8



NO. OFFICE TEL. FAX. 60 THOENG 0-5379-5001-3,0-5379-5040 0-5379-5002

61 MAESAI 0-5373-3145-6 0-5373-3146

62 HUAIKHRAI 0-5376-3001-2 0-5376-3001

CHIANGMAI

63 CHIANGMAI 0-5325-1058-62 0-5323-3159

64 CENTRALPLAZACHIANGMAIAIRPORT 0-5320-1843-5

65 TALADVAROROT-CHIANGMAI 0-5323-3117-8,0-5325-2877 0-5325-2882

66 TALADNONGHOI-CHIANGMAI 0-5314-0123-8 0-5380-1456

67 THANONCHANGKHLANCHIANGMAI 0-5390-3630-3 0-5390-3535

68 THANONCHANGPUEKCHIANGMAI 0-5321-1061-2,0-5322-2975,0-5322-2966,0-5321-8901-2 0-5322-1545

69 HUAIKAEOROAD-CHIANGMAI 0-5340-4042-3 0-5340-4044

70 FANG 0-5345-3506-7,1154 0-5345-1002

71 SANPAKHOY-CHIANGMAI 0-5324-9858-9,9595 0-5324-9861

72 SIYAKKUANGSING-CHIANGMAI 0-5341-0980-2 0-5341-0983

73 HOT 0-5346-1055-6 0-5346-1056

74 THANONMOONMUANGCHIANGMAI 0-5320-8956-7 0-5320-8956

SUB-BRANCH

75 THANONSUTHEPCHIANGMAI 0-5381-1674-5,1164 Allnumbers

SUB-BRANCH

76 HANGDONGSUB-BRANCH 0-5343-1591,1593,1546 Allnumbers

TRANG

77 KHLONGPANG 0-7528-6055,6066 0-7528-6055

78 TRANG 0-7521-4025-6,0811 0-7521-8344

79 HUAIYOT 0-7527-1147-8,1425 0-7527-1148

TRAT

80 TRAT 0-3952-0637-8,0363 0-3952-0637

81 BORAI 0-3959-1041-2 0-3959-1041

82 KOCHANGSUB-BRANCH 0-3955-1040-1 Allnumbers

TAK

83 TAK 0-5551-2093-4 0-5551-2890

84 MAESOT 0-5553-3038-40 0-5553-3383

NAKHONNAYOK

85 NAKHONNAYOK 0-3731-2350,2352,2346 0-3731-2588

NAKHONPATHOM

86 KAMPHAENGSAEN 0-3435-1020-1 0-3435-1022

87 NAKHONPATHOM 0-3421-9737-41 0-3421-9742

88 PHRAPATHOMCHEDI 0-3425-0750-1 0-3425-0751

89 PHRAPRATONE-NAKHONPATHOM 0-3421-2006,2010,2014 Allnumbers

90 SILPAKORNUNIVERSITY- 0-3425-0822-5,0-3421-9177-9 0-3425-0826

SANAMCHANDRAPALACE

91 SAMPRANNAKORNPATHOM 0-3432-2885-7,0-3422-5155,0-3422-5498-9,0-3432-2564-5 0-3432-1990




NAKHONPHANOM

92 THARTPHANOM 0-4254-1008-9 0-4254-1009

93 NAKHONPHANOM 0-4251-1023,1322,2614 0-4251-2614

NAKHONRATCHASIMA

94 SURANAREECAMP- 0-4434-1872-5 0-4434-1875

NAKHONRATCHASIMA

95 DANKHUNTHOT 0-4438-9101-2,9279 0-4438-9279

96 THANONPRAJAK- 0-4425-2665,0-4426-7471 0-4425-6202

YAKSANLAKMUEANG 0-4425-5191,0-4425-5567-8

97 THANONPHIBUNLA-IAT- 0-4427-5200-2 0-4427-5203

NAKHONRATCHASIMA

98 NAKHONRATCHASIMA 0-4425-7680-1,5552 0-4424-5916

99 PRATHAI 0-4447-9128,9511 0-4447-9511

100 PAKTHONGCHAI 0-4444-1019,1100,1641 0-4444-1100

101 PAKCHONG 0-4431-2734,4690 Allnumbers

102 PHIMAI 0-4447-1334-5 0-4447-1335

103 MUANGKHONG 0-4445-9234-5 0-4445-9235

104 SUNGNOEN 0-4441-9241,9865,9588 0-4441-9588

105 THEMALLNAKHONRATCHASIMA 0-4439-3750-1 0-4439-3752

SUB-BRANCH

106 HUATHALAENAKHONRATCHASIMA 0-4426-4964-5 0-4426-4980

SUB-BRANCH

NAKHONSITHAMMARAT

107 CHANDI 0-7548-6184-5,6304-5 0-7548-6184

108 TALADHUAIT- 0-7531-6164-8 0-7531-6168

NAKHONSITHAMMARAT

109 THUNGSONG 0-7521-4025-6,0811 0-7541-2447

110 NAKHONSITHAMMARAT 0-7534-2893,6050,0-7535-6801 0-7535-6979

111 NAKHONSITHAMMARATRAJABHAT 0-7539-2116-8 Allnumbers

UNIVERSITYSUB-BRหANCH

NAKHONSAWAN

112 CHUMSAENG 0-5628-2498-9,2699 0-5628-2499

113 TAKHLI 0-5626-1537-8,2155 0-5626-2155

114 NAKHONSAWAN 0-5622-7006-7 0-5622-7414

115 WING4TAKHLISUB-BRANCH 0-5631-5737-9

116 THANONASIANAKHONSAWAN 0-5622-8223-5 0-5622-8224

117 PHAYUHAKHIRI 0-5634-1497-8 0-5634-1497

NARATHIWAT

118 TAKBAI 0-7364-2327,2329 0-7364-2328

119 NARATHIWAT 0-7351-2273-5 0-7351-2274

120 SUNGAIKOLOK 0-7361-1555-6,1587 0-7361-1587


330 A n n u a l R e p o r t 2 0 0 8



NAN

121 NAN 0-5471-0455,0477,0-5477-1971 0-5477-2818

122 BANLUANG 0-5476-1076,1003 Allnumbers

123 THAWANGPHASUB-BRANCH 0-5479-9679,9634 0-5479-9138

BURIRAM

124 NANGRONG 0-4463-1456-7 0-4463-1457

125 BURIRAM 0-4461-3441-3 0-4461-3443

126 NONGKI 0-4464-1111-2 0-4464-1112

PRACHUAPKHIRIKHAN

127 PRACHUAPKHIRIKHAN 0-3260-1547-8,0-3261-1919 0-3261-1918

128 PRANBURI 0-3262-1989-90,1829 0-3262-1991

129 HUAHIN-PRACHUAPKHIRIKHAN 0-3251-2205,0-3251-2425 0-3251-2347

0-3251-2500,0-3253-2151-2

130 HUAHINMARKETVILLAGE 0-3252-6314-6 0-3252-6316

SUB-BRANCH

PRACHINBURI

131 PRACHANTAKHAM 0-3729-1251-2,1509 0-3729-1251

132 PRACHINBURI 0-3721-1355-6,1655 0-3721-1355

PATTANI

133 PATTANI 0-7333-2677-9 0-7333-1038

AYUTTHAYA

134 BANGBAN 0-3539-9508-10 0-3539-9510

135 WANGNOI 0-3521-5649-53 Allnumbers

136 AYUTTHAYA 0-3524-1417-8,2417 0-3524-2417

137 UTHAI-AYUTTHAYA 0-3533-5417-8,5043 0-3533-5418

PHAYAO

138 PHAYAO 0-5448-1720-21,2329-30 0-5448-2330

139 NARESUANUNIVERSITY 0-5446-6768-9 0-5446-6770

SUB-BRANCH

PHANGNGA

140 PHANGNGA 0-7641-1627,1555 0-7641-1626

141 KHAOLHUKPHANGNGASUB-BRANCH 0-7644-3445-8 0-7644-3448

PHATTHALUNG

142 PHATTHALUNG 0-7461-3305,3313,1965 0-7461-1965

PHICHIT

143 KHAOSAI 0-5664-9111,9060 0-5664-9060

144 TAPHANHIN 0-5662-1325,1194,1477 0-5662-1477

145 PHICHIT 0-5661-2219,2216,0-5665-1330-1 0-5661-2216

146 SAKLEK 0-5669-9266-7,9367 0-5669-9367

147 SAMNGAM 0-5669-1210-1 0-5669-1210





PHITSANULOK

148 KHOKMATUM-PHITSANULOK 0-5521-2432-6 0-5521-2436

149 SAPPHRAIWAN 0-5524-5001-3 0-5524-5001

150 PHITSANULOK 0-5524-5770-2,5543-4 0-5524-1911

151 PHITSANULOK2 0-5524-5770-2,0-5524-5543 0-5524-5543

PHETCHABURI

152 PHETCHABURI 0-3242-6005,6115,7300 0-3242-7165

153 PHETCHABURIRAJABHAT 0-3249-3000-2 Allnumbers

UNIVERSITYSUB-BRANCH

PHETCHABUN

154 PHETCHABUN 0-5671-1386,0-5672-1250,2765 0-5672-1290

155 LOMSAK 0-5670-1044,1579,1708 0-5670-1708

PHRAE

156 PHRAE 0-5451-1659,1655,1646 0-5451-1646

157 SUNGMEN 0-5454-1360,1231 0-5454-1360

PHUKET

158 MONTRIROAD-PHUKET 0-7622-5177-8,5486 0-7623-0104

159 THALANG 0-7631-1366-7,1484 0-7631-1501

160 PHUKET 0-7621-2123,2987,3488 0-7621-3487

161 BANGKOKPHUKETHOSPITAL 0.7621-0059,0065,0140 Allnumbers

162 VAJIRAHOSPITAL-PHUKET 0-7623-7237-40 0-7623-7241

163 PATONGBEACH 0-7634-0545-7 0-7634-0547

164 HAYAEKCHALONGPHUKET 0-7638-1749-51,0-7638-1736

165 CENTRALFESTIVALPHUKET 0-7624-8509-11

SUB-BRANCH

166 PHUKETAIRPORTSUB-BRANCH 0-7632-8383-5 Allnumbers

MAHASARAKHAM

167 MAHASARAKHAM 0-4372-2111-3 0-4372-2113

168 MAHASARAKHAMUNIVERSITY 0-4375-4141-3 Allnumbers

SUB-BRANCH

MUKDAHAN

169 MUKDAHAN 0-4261-1520,1855,1892 0-4261-1892

MAEHONGSON

170 MAEHONGSON 0-5362-0120-4 0-5362-0125

YASOTHORN

171 YASOTHON 0-4571-2301-3 0-4571-2303

YALA

172 YALA 0-7321-4029,4384,4231 0-7321-4384

ROIET

173 ROIET 0-4351-1369,1612,2449 0-4351-2449


332 A n n u a l R e p o r t 2 0 0 8



RANONG

174 KRABURI 0-7789-1027-8 0-7789-1028

175 RANONG 0-7782-3028-30 0-7782-3030

RAYONG

176 KLAENG 0-3888-4595-7 0-3888-4597

177 NOENKHAODIN 0-3866-9498-500 0-3866-9499

178 BANKHAI 0-3864-1001-3 0-3864-1001

179 BANCHANG 0-3860-1027,1357,1727 0-3860-1727

180 RAYONG2 0-3861-7311-4,0-3861-7470-4 0-3861-7475

RATCHABURI

181 DAMNOENSADUAK 0-3225-3701,3348-9 0-3225-3349

182 THANONKHATHATHORN 0-3231-5645-50,0-3231-5651 0-3231-5817

RATCHABURI

183 BANPONG 0-3220-0382-3,0-3234-4767-8 0-3220-0383

184 PHOTHARAM 0-3223-1062,1637 Allnumbers

185 RATCHABURI 0-3232-1808 0-3232-2047

LOPBURI

186 LOPBURI 0-3641-1596,1945 0-3641-2093

187 WONGWIENSRAKAEW- 0-3642-2670,2915,0-3641-3369,2729 0-3642-2915

LOPBURI

LAMPANG

188 NGAO 0-5426-1193-4,1007 0-5426-1007

189 THANONCHATCHAI-LAMPANG 0-5422-4816,0-5422-8143,0-5435-2048-53,0-5422-5072 0-5422-5073

190 LAMPANG 0-5422-6522-3,4154-5 0-5422-4153

191 HANGCHAT 0-5426-9206-8 0-5426-9206

LAMPHUN

192 LAMPHUN 0-5356-1460-1,0-5351-0460 0-5351-0460

193 LAMPHUNINDUSTRIALESTATE 0-5355-4821,4385,0-5353-9618 0-5353-9618

SUB-BRANCH

LOEI

194 LOEI 0-4281-2122,2133 0-4281-2133

195 LOEIRAJABHATUNIVERSITY 0-4283-5754-5 0-4283-5756

SUB-BRANCH

SISAKET

196 SISAKET 0-4561-2518-20 0-4561-3279

SAKONNAKHON

197 SAKONNAKHON 0-4271-1393,1993,2152 0-4271-3403

SONGKHLA

198 KHUANNIANG 0-7438-7155-7 0-7438-7157

199 DANNOK 0-7443-4271-5 Allnumbers

200 TALADSANTISUK 0-7423-0575-6 0-7423-0575





201 THANONJUTIANUSORNHATYAI 0-7424-4187,0-7424-4324 0-7423-7858

0-7423-0883-4,0-7435-5774-7 0-7435-5778

202 THANONPHETKASEM-HATYAI 0-7423-6403-4,9830 0-7423-6405

203 THANONRATHAKHAN-HATYAI 0-7423-7575-6,8801-2 0-7423-8800

204 RANOT 0-7439-1030-1,2555 0-7439-1031

205 SONGKHLA 0-7431-1333,2001,4803 0-7431-4803

206 HATYAI 0-7423-5301,1141-3 0-7423-5300

SATUN

207 SATUN 0-7472-1219-22 0-7472-1221

SAMUTSONGKHRAM

208 SAMUTSONGKHRAM 0-3471-5454-5 0-3471-5456

SAMUTSAKHON

209 SAMUTSAKHON 0-3441-2333,0-3442-2245,5992 0-3442-5993

210 OMNOI 0-2420-2347-9,0-2431-0975-6 Allnumbers

SAKAEO

211 SAKAEO 0-3724-2688-91 0-3724-2692

212 ARANYAPRATHET 0-3723-1280,1290 0-3723-2601

SARABURI

213 THANONPHAHONYOTHINSARABURI 0-3631-8270-3,0-3621-2023-4 0-3631-8270

214 PHRAPHUTTHABAT 0-3626-6744-5 0-3626-6745

215 MUAKLEK 0-3634-1017,1024,1990 0-3634-1024

216 WANGMUANG 0-3635-9211-3 0-3635-9213

217 WIHANDAENG 0-3637-7725,7258-9 0-3637-7725

218 SARABURI 0-3622-2430-2431,0-3622-1229 0-3622-1229

219 NONGKHAESUB-BRANCH 0-3637-1020-2 0-3637-0095

SINGBURI

220 SINGBURI 0-3651-1326,2276 0-3651-2276

SUKHOTHAI

221 BANDANLANHOI 0-5568-9070,9110 0-5568-9070

222 SAWANKHALOK 0-5564-2317-8,1124 0-5564-1124

223 SUKHOTHAI 0-5561-1147,1590,1995 0-5561-1995

SUPHANBURI

224 SUPHANBURI 0-3552-2356,2358,2360 0-3552-2360

225 UTHONG 0-3555-2009,2020,2007 0-3555-2007

SURATTHANI

226 KOSAMUI 0-7742-0360-62,1143 0-7742-1143

227 THANONSURATTHANI-PHUNPHIN 0-7728-3459-61 0-7728-3460

228 NASAN 0-7734-1037-8,1538 0-7734-1538

229 THONGSALAKOPHANGAN 0-7723-8920-2 Allnumbers

230 SURATTHANI 0-7727-2753-4,0-7728-1009 0-7728-1010

231 KOPHANGANSUB-BRANCH 0-7737-5046,5089 0-7737-5010


334 A n n u a l R e p o r t 2 0 0 8



232 BOPHUTKOSAMUISUB-BRANCH 0-7724-6225-7 Allnumbers

233 BANSONGSURATTHANI 0-7725-7138,7093,7127 Allnumbers

SUB-BRANCH

234 BIGCSURATTHANISUB-BRANCH 0-7722-4201,4324,4809 Allnumbers

235 SURATTHANIRAJABHAT 0-7735-5162,5483,5234 Allnumbers


236 MAENUMKOSAMUISUB-BRANCH 0-7724-7879,7649 0-7724-7889

237 CHAWENGBEACH2KOSAMUI 0-7723-1959-60 0-7723-1960

SUB-BRANCH

238 CHAWENGBEACHKOSAMUI 0-7723-1955-6 0-7723-1957

SUB-BRANCH

239 LAMAIBEACHKOSAMUISUB-BRANCH 0-7723-3292-5 Allnumbers

SURIN

240 SURIN 0-4451-4250-2 0-4451-4252

NONGKHAI

241 PHONPHISAI 0-4247-1266-7,0-4240-5552 0-4247-1266

242 NONGKHAI 0-4242-0562-3,0-4245-0564 0-4242-0562

NONGBUALAMPHU

243 NONGBUALAMPHU 0-4236-1547-50 0-4236-0551

ANGTHONG

244 ANGTHONG 0-3561-1262 0-3561-2418

AMNATCHAROEN

245 AMNATCHAROEN 0-4551-1590-4 0-4551-1593

UDONTHANI

246 THANONTHAHANUDONTHANI 0-4234-1951-6 0-4234-1957

247 THANONPHOSI-UDONTHANI 0-4224-9551-3 0-4224-9554

248 BANPHU 0-4228-1264-5 0-4228-1265

249 UDONTHANI 0-4224-1130,4776-8 0-4224-4391

250 UDONTHANIRAJABHAT 0-4224-8238,8680,0-4222-2786 Allnumbers


UTTARADIT

251 UTTARADIT 0-5541-1800,1655,2380 0-5541-2380

UTHAITHANI

252 THAPTHAN 0-5659-1220-2 0-5659-1221

253 UTHAITHANI 0-5651-1122,1187 0-5651-1613

254 BANRAI 0-5653-9002-3 0-5653-9004

UBONRATCHATHANI

255 TRAKANPHUTPHON 0-4548-1015,1111 0-4548-1015

256 THANONPHROMMARAT- 0-4524-0214-8 0-4524-0215

UBONRATCHATHANI

257 UBONRATCHATHANI 0-4524-1313,1257,1978 0-4524-2572



NO. NAME ADDRESS TEL. OFFICEHOURS

1 AndamanBarzaar 188/2ThaweewongRd.,Patong,Kathu,Phuket 0-7634-1015

2 AndamanPromanard, AndamanClubRoomNo.120/10-11Raj-U-Thit 0-7634-1357,1387

Phuket 200yearsRd.,Patong,Kathu,Phuket

3 AoNangSubBranch, 146/2Moo.2,AoNang,Muang,Krabi 0-7563-7656

Krabi

4 AoNangSunset 268Moo.2,AoNang,Muang,Krabi 0-7563-7408

5 AoPraNang 208/2-3Moo.2,AoNang,Muang,Krabi 0-7569-5462

6 ArrivalHall1(AH1), 999Moo.1,Nongprue,BangPhli,SamutPrakarn 0-2134-1813-4 24Hours.

SuvarnabhumiAirport


SuvarnabhumiAirport


SuvarnabhumiAirport

9 ArrivalLounge1(AL1), 999Moo.1,Nongprue,BangPhli,SamutPrakarn 0-2134-1813-4 24Hours.

SuvarnabhumiAirport


SuvarnabhumiAirport


SuvarnabhumiAirport

12 Banthai 94ThaweewongRd.,Patong,Kathu,Phuket 0-7634-0618

13 BangkokHospitalSoi. InsideInterNationBuildingatBangkokHospitalSoi. 0-2369-2657-8

Soonvijai Soonvijai,BKK

14 Bangla1 136/1ThaweewongRd.,Patong,Kathu,Phuket 0-7634-0157

15 BoPhudSubBranch, 25/21-22Moo.6,BoPhud,KohSamui,Suratthani 0-7724-6225-7

KohSamui

16 CaesarPalaceHotel 382/34Moo.9,Nongprue,Banglamung,Chonburi 0-3842-5011-2

17 CentralFestivalSub 74-75CentralFestivalShoppingCenter2ndFloor. 0-7624-8515

Branch,Phuket Moo.5,Wichit,Muang,Phuket

18 CentralWorld InsideCenterWorld2ndFloor.UnitNo.K-B205 0-2646-1284-6 OpenDaily

Room.K2-10/2,BKK 10.00a.m.-8.00p.m.

19 ChatuchakGate2 FXBoothGate2ChatuchakAdministrationOffice 0-2272-4715-6 OpenSaturdayand

Bangkok,KamphaengPhet2Rd.,Ladyao,Chatuchak,BKK Sunday

8.30a.m-5.00p.m.


Currency Exchange Service Offices

336 A n n u a l R e p o r t 2 0 0 8


20 ChatuchakGate3 FXBoothGate3ChatuchakAdministrationOffice 0-2272-4105 OpenSaturdayand

Bangkok,KamphaengPhet2Rd.,Ladyao,Chatuchak,BKK Sunday

8.30a.m-5.00p.m.

21 CherryHotel,Pattaya CherryHotelPattaya270/3Moo.10,Nongprue, 0-3842-9501-2

Banglamung,Chonburi

22 DepartureHall1(DH1), 999Moo.1,Nongprue,BangPhli,SamutPrakarn 0-2134-1813-4 24Hours.

SuvarnabhumiAirport


SuvarnabhumiAirport


SuvarnabhumiAirport


SuvarnabhumiAirport


SuvarnabhumiAirport

27 DepartureLounge1(DL1) 999Moo.1,Nongprue,BangPhli,SamutPrakarn 0-2134-1813-4 24Hours.

SuvarnabhumiAirport

28 DepartureLounge2(DL2) 999Moo.1,Nongprue,BangPhli,SamutPrakarn 0-2134-1813-4 24Hours.

SuvarnabhumiAirport

29 DepartureLounge3(DL3)999Moo.1,Nongprue,BangPhli,SamutPrakarn 0-2134-1813-4 24Hours.

SuvarnabhumiAirport

30 Devana 49/145Raj-U-Thit200yearsRd.,Patong,Kathu,Phuket 0-7634-0035

31 DomesticDeparture(DD), DomesticTerminalDonmuangAirport2ndFloor. 0-2535-3171 OpenDaily

DonmuangAirport Viphavadee-RangsitRd.,Donmuang,BKK 7.00a.m.-10.00p.m.

32 DomesticSouth(DS), DomesticTerminalDonmuangAirport1stFloor. 0-2535-3172 OpenDaily

DonmuangAirport Viphavadee-RangsitRd.,Donmuang,BKK 7.00a.m.-10.00p.m.

33 Gallery(GL1), 999Moo.1,Nongprue,BangPhli,SamutPrakarn 0-2134-1813-4 24Hours.

SuvarnabhumiAirport

34 HaYaekChalong 16/43-44Chao-FaEastRd.,Chalong,Muang,Phuket 0-7623-7237

Branch,Phuket 0-7638-1750

35 HadChaweng1 FrontofChawengVillaBangalow157Moo.2LiabHad 0-7742-2492

ChawengRd.,BoPhud,KohSamui,Suratthani

36 HadChaweng2 FrontofChawengRd.,(NearbyMalibuResort),BoPhud, 0-7741-3346

KohSamui,Suratthani





37 HadChaweng3 97Moo.2,BoPhud,KohSamui,Suratthani 0-7741-4437

38 HadChaweng1 167/36-37Moo.2,BoPhud,KohSamui,Suratthani 0-7723-1955-6

SubBranch,KohSamui

39 HadChaweng2 30/11Moo.3,BoPhud,KohSamui,Suratthani 0-7723-1959-60

SubBranch,KohSamui

40 HadDongtan,Pattaya 69Nongprue,Bangprue,Banglamung,Chonburi 0-3842-9501-2

41 HadJomtien 405Moo.12,Nongprue,MuangPattaya,Chonburi 0-3823-2074

42 HadKaron 643PatakRd.,Karon,Muang,Phuket 0-7639-6978

43 HadKata CornerPlazaShoppingComplex112/3TainaRd.,Karon,0-7633-0088

Muang,Phuket

44 HadLamai,KohSamui 124/105Moo.3,Maret,KohSamui,Suratthani 0-7723-3292-3

45 HadLamaiSubBranch, 124/42Moo.3,Maret,KohSamui,Suratthani 0-7723-3292-3

KohSamui

46 HadPatongBranch 158ThaweewongRd.,Patong,Kathu,Phuket 0-7634-0092

47 HadThongNaiPan, 10/5Ban-Tai,KohPhangan,Suratthani 0-7723-8920-2

KohPhangan

48 Hua-Hin1 160NaresdamriRd.,Hua-Hin,Prachuapkhirikhan 0-3253-2372

49 Hua-Hin3,Hua-Hin 226/2PhetkasemRd.,Hua-Hin,Prachuapkhirikhan 0-3251-5735

PrachuapkhirikhanBranch

50 Hua-HinTourist InFrontHua-HinTouristInformationCenter, -

InformationCenter(Mobile) PhetkasemRd.,Prachuapkhirikhan

51 IndraPratunamBranch 120/67Soi.Indra,RajprarobRd.,ThanonPhayathai, 0-2208-0982-3

Rajthevi,BKK

52 IndraSquareSubBranch 120/126RajprarobRd.,ThanonPhayathai,Rajthevi,BKK 0-2631-9457-9

53 InternationalBaggage 999Moo.1,Nongprue,BangPhli,SamutPrakarn 0-2134-1813-4 24Hours.

Claim(IB1),

SuvarnabhumiAirport

54 InternationalDeparture 999Moo.1,Nongprue,BangPhli,SamutPrakarn 0-2134-1813-4 24Hours.

(East)(ID1),

SuvarnabhumiAirport

55 InternationalDeparture 999Moo.1,Nongprue,BangPhli,SamutPrakarn 0-2134-1813-4 24Hours.

(West)(ID2),

SuvarnabhumiAirport

56 JomtienBranch 334/1-2Moo.12JomtienBeachRd.,Nongprue, 0-3823-2079

Banglamung,Chonburi



338 A n n u a l R e p o r t 2 0 0 8


57 KataNoi 183KoktanodeRd.,Karon,Muang,Phuket 0-7633-3236

58 Khao-LakSubBranch, 19/4-5Moo.6,Khukkhak,Takuapa,Pang-Nga 0-7644-3445-7

Pang-Nga

59 Khaosan 212PimanwitSchoolKhaosanRd.,Pranakorn,BKK 0-2629-0578-9 OpenDaily

(PimanwitSchool) 11.00a.m.-9.00p.m.

60 KohChangSubBranch 9/41Moo.4,BanHadSaiKhao,KohChang,Trat 0-3958-6242

61 KohLantaSubBranch 99/1Moo.1,Saladan,KohLanta,Krabi 0-7568-4337

62 KohPhangan1 95/15Moo.6,Ban-Tai,KohPhangan,Suratthani 0-7737-5202

63 KohPhanganSubBranch 120/1Moo.6,Ban-Tai,KohPhangan,Suratthani 0-7737-5089,5046

64 KohSamuiBranch 67/12-13Moo.3,Angthong,KohSamui,Suratthani 0-7742-0360-2

65 KrabiAirport PhetkasemRd.,Nue-Klong,Nue-Klong,Krabi 0-7563-6487

66 LandmarkPlaza 138LandmarkPlazaBuildingSukhumvitRd.,Klongtoey, 0-2252-6032,

SubBranch Klongtoey,BKK 0-2252-6092

67 MaenamSubBranch, 44/36-37Moo.1,Maenam,KohSamui,Suratthani 0-7724-7879,7649

KohSamui

68 MaeSaiBranch 44/1-2Moo.7PhahonyothinRd.,MaeSai,MaeSai, 0-5373-3145-6

Chiangrai

69 MahBoonkrongCenter 444MahBoonkrongDepartmentStore(MBK), 0-2215-2136-7,

Branch PhayathaiRd.,Wangmai,Pathumwan,BKK 0-2217-9234

70 MarinaCottageHotel 47KaronRd.,Karon,Muang,Phuket 0-7633-3051-2

71 MarkLandHotel 436/541Moo.9NorthPattayaBeachRd.,Nongprue, 0-3842-9501-2

Banglamung,Chonburi

72 MountainBeachHotel, 378/24Moo.12,Nongprue,Banglamung,Chonburi 0-3842-9501-2

Pattaya

73 NationalStadium NationalStadiumBTSStationW1-29,RamaIRd., 0-2612-3132 OpenDaily

BTSStation Wangmai,BKK 9.30a.m.-8.30p.m.

74 NightBarzaar,Chiangrai 870/12Moo.4PhahonyothinRd.,Wieng,Muang,Chiangrai 0-5371-5657

75 OtopPatong OTOPShoppingCenterPatong(OppositeHoliday 0-7634-0164

ShoppingCenter InnHotel),Raj-U-Thit200yearsRd.,Phuket

76 OtopPatongShopping 237/2Raj-U-Thit200yearsRd.,Patong,Kathu,Phuket 0-7634-0545-6

Center(Mobile)

77 PatongMerlinHotel FrontofPatongMerlinHotelThaweewongRd.,Phuket 0-7634-1048

78 PattayaBeach Naklur,Banglamung,Chonburi 0-3841-0747

79 Pattaya2ndRd.(Alcaza) ThaiPalaceHotel,212Moo.9Pattaya2ndRd., 0-3841-5302

Nongprue,Banglamung,Chonburi






80 PattayaBranch 325/67-70PattayalandShoppingCenter,Moo.10, 0-3842-6107

Nongprue,MuangPattaya,Chonburi

81 PhromphongBTSStation PromphongBTSStationE5-10/1A,Sukhumvit24Rd., 0-2663-7485 OpenDaily

Klongtoey,BKK 10.00a.m.-8.30p.m.

82 PhuketInternational 222Moo.6,MaiKhao,Talang,Phuket 0-7632-8383-5

AirportBranch

83 PlatinumPratunam ThePlatinumFashionMall,222PetchaburiRd., 0-2121-9404 OpenDaily

ThanonPetchaburi,Rajthevi,BKK 10.30a.m.-7.00p.m.

84 PlatinumPratunam2 InFrontofThePlatinumFashionMall, 0-2121-9493 OpenDaily

222/226Petchaburi-TadmaiRd.,BKK 9.30a.m.-8.30p.m.

85 Rambuttri 323RambuttriRd.,Taladyod,Pranakhon,BKK 0-2629-0620-1 OpenDaily

11.00a.m.-9.00p.m.

86 RoseGarden AtRoseGardenReverside,NakornPathom 0-3432-2885-7

87 RoyalGardenPlaza 218Moo.10,Nongprue,Banglamung,MuangPattaya,Chonburi 0-3841-1750

88 RoyalParadiseHotel,Phuket 160Raj-U-Thit200yearsRd.,Patong,Talang,Phuket 0-7634-0545-6

89 SabanaResortHotel 14/53Moo.1,Rawai,Muang,Phuket 0-7634-0545-6

90 SaiNamYen 271Raj-U-Thit200yearsRd.,Patong,Kathu,Phuket 0-7634-0545-6

CenterPoint,Phuket

91 SoiBuaKhao 210Moo.9,Nongprue,Banglamung,Chonburi 0-3841-0615

92 SoiBuaKhao 66/38Moo.9,LKRoyalSuiteBuilding,Nongprue, 0-3872-0092,0083

SubBranch,Pattaya Banglamung,Chonburi

93 SoiChaiyos,Sukhumvit112/6Soi.ChaiyosSukhumvitRd.,Klongtoey-Nue, 0-2651-1619 OpenDaily

Wattana,BKK 8.30a.m.-9.00p.m.

94 SuanLumNightBarzaar 1875RamaIVRd.,Lumphini,Pathumwan,BKK. 0-2251-5255-6 OpenDaily

3.30p.m.-11.30p.m.

95 SunshineSubBranch, 240/12Moo.5Pattaya-NaklurRd.,Naklur,Banglamung, 0-3841-0617

Pattaya Chonburi

96 Tappaya Nongprue,Banglamung,Chonburi 0-3825-1449

97 ThanonChaiyaphum 314ChaiyaphumRd.,Changmoi,Muang,Chiangmai 0-5323-3158

98 ThanonLoyKro 70LoyKroRd.,Changklan,Muang,Chiangmai 0-5320-6541

99 ThanonMoonMuang 5RatchamankhaRd.,Phra-Sing,Muang,Chiangmai 0-5327-0376

100 ThanonPhahonyothin 897/7-8PhahonyothinRd.,Wieng,Muang,Chiangrai 0-5371-4886-7

ChiangraiBranch

101 ThanonTappaya 315/297Moo.12,Nongprue,Banglamung,Chonburi 0-3830-3778


340 A n n u a l R e p o r t 2 0 0 8



SubBranch,Pattaya

102 ThongSalaSubBranch, 161/21Moo.1,KohPhangan,Suratthani 0-7723-8920-2

KohPhangan

103 U-TaphaoAirport 70Moo.2SukhumvitRd.,Samnak-Krathon, 0-3824-5595

Banchang,Rayong

104 WinmillResortHotel, InsideWindmillResortPattaya,665Moo.5, 0-3837-1441-3

Pattaya Pattaya-Naklur,Banglamung,Chonburi

105 WongWienKaron 240KaronRd.,Karon,Muang,Phuket 0-7639-6088



Name-IBC ADDRESS TEL. FAX.

Asoke 189/1GrandParkViewBuilding,1Floor, 0-2204-2723-5 0-2204-2726

Sukhumvit21Road(Asoke)Wattana,

Bangkok10110

ChaengWatthana 72/8Moo2,ChaengWatthanaRoad,Tumbon 0-2982-9548-9 0-2982-9547

Klongklua,AmpurPakkredNonthaburi11120

Chiangmai 275/5,2ndFloor,ChangPuakRoad, 0-5341-0102-3,0-5341-0987 0-5341-0909

TumbonChangPuakAmpur

MuangChiangmai50300

Chonburi 870Kor.SukhumvitRoad,Tumbon 0-3828-3526,0-3827-0794 0-3828-3652

Bangplasoi,AmpurMuangChonburi20000

HatYai 160Niphatuthit2Road,TumbonHatYai, 0-7435-5314,0-7435-5749 0-7435-4491

AmpurHatYai,Songkhla90110

KrungKasem 1514KrungkasemRoad,Thepsirin, 0-2221-1085,0-2226-1598 0-2221-1275

PomprabBangkok10100

PhayaThai 34PhayathaiRoad,ThungphayaThai, 0-2354-5109,0-2354-5074 0-2354-5070

Rajthevee,Bangkok10400 0-2354-5190

Rayong 139/1SukhumvitRoad,TumbonCherngnurn, 0-3880-0401 0-3880-0402

AmpurMuang,Rayong21000

Samutsakorn 824/48-52NorrasingRoad,TumbonMahachai, 0-3481-1419-20 0-3481-1418

AmpurMuang,Samutsakorn74000

Silom 3931stFloor,KorntongBuilding, 0-2230-5494,0-2230-5320 0-2230-6008

SilomRoad,BangrakBangkok10500 0-2230-5633,0-2230-5337

Thanon 906,908,910ThanonBorommaratchonni, 0-2886-5435-6 0-2434-1756

Borommaratchonni Bangbumru,Bangplad,Bangkok10700

Thanon 103/1SoiThonglor,Sukhumvit55Road, 0-2392-0346-8 0-2712-7612

Phetchaburi-Tadmai NorthKlongton,Wattana,Bangkok10110

Theparak 88Moo3,TheparakRoad,TumbonTheparak, 0-2753-3600-1 0-2753-3602

AmpurMuang,Samutprakarn10270


International Business Center

342 A n n u a l R e p o r t 2 0 0 8

1. Hong Kong Branch GeneralManager : Mr.PongsakFookirkkiat(คุณพงษ์ศักดิ์ฟูเกริกเกียรติ)

Address : Room1601,16th/Floor,NewWorldTower1,

18Queen’sRoadCentralHongKong

E-mail : [email protected]

Tel : 001-852-2845-6677

Fax : 001-852-2845-1182

2. Vientiane Branch BranchManager : Mr.LouchaiLouchaisa

Address : 34/2Unit6BanHaysokSamsenthaiRoad,

ChanthabouliVientiane,LaoPDR


Tel : 007-856-2121-6486,007-856-2121-7174

Fax : 007-856-2121-4726

Telex 4327TMBVTELS

3. Cayman Island Branch Manager : Mrs.SoontareeRojanapenkul

Address : P.O.Box501GT,CardinallAvenue

GrandCayman,CaymanIslands,B.W.I.

c/oTMBBankPublicCompanyLimited

3000PhahonyothinRoad,Chatuchak,Bangkok10900

Thailand


Tel : 662-230-5791

Fax : 662-230-5788


Overseas Branches


ASIA CHINA : AgriculturalBankofChinaBankofChinaLtd.BankofCommunicationsChinaConstructionBankCorporationIndustrialandCommercialBankofChinaLtd.HONG KONG : DBSBank(HongKong)LimitedHongkongandShanghaiBankingCorporationLtd.StandardCharteredBank(HongKong)Ltd.INDIA : ICICIBankLtd.BankofIndiaStateBankofIndiaJAPAN : BankofTokyo-MitsubishiUFJ,Ltd.MizuhoCorporateBankLtd.SumitomoMitsuiBankingCorporationLAOS : BanquePourLeCommerceExterieurLaoLaoDevelopmentBankMALAYSIA : MalayanBankingBerhadCIMBBankBerhadPublicBankBerhadSINGAPORE : DBSBankLtd.UnitedOverseasBankLtd.OverseasChineseBankingCorp.VIETNAM : VietnamBankforIndustryandTradeIndustrialandCommercialBankofVietnam(ICB)

AUSTRALIA AND NEW ZEALAND AUSTRALIA : AustraliaandNewZealandBankingGroupLtd.CommonwealthBankofAustraliaNationalAustraliaBankLtd.NEW ZEALAND ANZNationalBankLtd.BankofNewZealand EUROPE AUSTRIA : UnicreditAustriaRaiffeisenZentralbankOesterreichBELGIUM : INGBelgiumSA/NVDENMARK:DanskeBankA/SNordeaBankDenmarkA/SFINLAND: NordeaBankFinlandPlcFRANCE : BNPParibasNATIXISSocieteGeneraleCalyonGroupGERMANY : CommerzbankAGDeutscheBankAGHSHNordbankAGITALY : BancaNazionaledelLavoroIntesaSanpaoloS.p.A.UniCreditoItalianoS.p.A.NETHERLANDS : INGBankN.V.RabobankNederlandNORWAY : DnBNorBankNordeaBankNorgeASA

SWEDEN : NordeaBankAB(publ)SvenskaHandelsbankenAB(publ)SWITZERLAND : CreditSuisseUBSAGZurcherKantonalbankUNITED KINGDOM : BarclaysBankPlc.HSBCBankPlc.RoyalBankofScotlandStandardCharteredBank NORTH AMERICA CANADA : BankofNovaScotiaNationalBankofCanadaToronto-DominionBankU.S.A : BankofAmericaN.A.BankofNewYorkCitibank,N.A.DeutscheBankTrustCompanyAmericasJPMorganChaseBank,N.A.WachoviaBank,N.A. MIDDLE EAST KUWAIT : NationalBankofKuwaitBAHRAIN : ArabBankingCorporationUNITED ARAB EMIRATE : AbuDhabiCommercialBank AFRICA SOUTH AFRICA : ABSABankStandardBankofSouthAfricaandothercorrespondentsthroughouttheworld


Main Correspondent Banks

344 A n n u a l R e p o r t 2 0 0 8

Summary of Specified Items per Form 56-2

in 2008 Annual Report

Content Page

1. GeneralInformation 310

1.1CompanyInformation 310

1.2Investmentinothercompanies 313

1.3Otherreferralparties

2. FinancialHighlights 6-7

3. NatureofBusiness

3.1Background 48

3.2Significantchangesanddevelopmentsin2008 48-52

3.3BusinessoverviewoftheBankanditssubsidiaryandassociatedcompanies 52-56

3.4Incomestructure 57

3.5Descriptionofservices 58-72

3.6Provisionofproductsandservices 73-77

4. RiskFactors 147-153

5. ShareholdingandManagement

5.1Shareholders 78

5.2Management 79

- OrganizationchartasofDecember31,2008 10-11

- Managementstructure 79-91

- BoardofDirectors’meeting 91-93

- Recruitmentofdirectorsandexecutiveofficers 93-94

- Remunerationfordirectorsandexecutives 94-98

- ShareholdingoftheBoardofDirectorsandExecutives 98-102

- CorporateGovernanceReport 102

- Controlonuseofinsiderinformation 114,116

- InternalControl 114,116-117

- Personnel 117-124

5.3DividendPaymentPolicy 125

6. RelatedTransactions 126-127

7. AnalysisoftheFinancialPositionandOperationalPerformanceoftheBank 128-146

8. FinancialStatements

- ComparisonoftheBankonlyfinancialstatementsandconsolidatedfinancialstatements 157-169

- Auditor’sremuneration 314

9. Businesscompetition 33

10.Otherfactorswhichmayimpacttheinvestors’decision 315-317


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