In the past year 2015, the country’s overall economy recovered slowly with better improvement than a year earlier. However, it was still adversely affected by both the internal and external factors. As a result, the loan growth of the commercial banking industry was rather limited. On the part of Thanachart Group, its overall loan growth was sluggish, mainly due to the contraction of its hire purchase loans in line with the slowdown of the automotive industry. However, Thanachart Group has been successful in strengthening TBANK which is the Group’s core business, in line with the established targets as follows:
- TBANK’s Capital Adequacy Ratio (CAR) which grew to 17.92 percent from 15.83 percent was among the top of the commercial bank industry. The Bank’s CAR was higher than two times of the 8.50 percent minimum requirement imposed by the BOT.
- TBANK’s asset quality has improved significantly with its NPL ratio falling from 4.09 percent to 2.84 percent while its coverage ratio increased from 85.52 percent to 119.42 percent which is at the level of more than sufficient.
- TBANK’s liquidity was at a relatively high level, as witnessed by its ability to maintain the Basel III Liquidity Coverage Ratio (LCR) of above 100 percent, which far exceeds the minimum requirement imposed by the BOT. (The BOT imposes the minimum requirement of 60 percent at the beginning of the year 2016. The requirement is to gradually increase by 10 percent per annum until it reaches 100 percent in 2020.)
TBANK’s success and developments in various areas in the past year led to a 6 percent increase of Thanachart Group’s profit. As a result, the Board of Directors is confident that it is able to continue maintaining the profitable performance of Thanachart Group at a satisfactory level in the future. In this connection, the Board of Directors would like to propose at the Annual General Meeting of Shareholders for the year 2016 that the dividend be increased from 1.60 baht per share to 1.80 baht per share.
As regards the year 2016, the Thai economy is expected to register a slightly higher growth than in 2015, mainly due to the government investment. On the other hand, the loan growth of the country’s commercial banking industry will be modest when compared with the growth in 2015. However, Thanachart Group’s policy in 2016 is still aimed at strengthening TBANK in a continuous manner as well as maintaining the Bank’s leadership position in the auto hire purchase market. Importantly, other types of loans will be increased to achieve a more balanced loan portfolio. As well, emphasis will be placed on increasing non-interest income by developing new products and services as well as information technology, among others. This is to make shareholders feel confident that TBANK is not only well prepared in the conduct of its business affairs but it also possesses competitiveness potential and is able to achieve stronger performance in a continuous and sustainable manner.
As indicated to you earlier, the Board of Directors adopted a resolution to repurchase the Company shares, based on its observation that the prices of the Company shares had declined to relatively low levels. As a result, the share repurchases would be beneficial to shareholders as a whole. In this connection, I would like to inform you that in 2015, the Company’s share repurchases were completed since August 2015 with the total number of repurchased shares amounting to 41,350,000. The Company used 1,400 million baht worth of excess liquidity to repurchase the shares at an average price of 33.86 baht per share.
In relation to good corporate governance, the Board of Directors has consistently paid close attention to all areas of corporate governance. This is reflected in the high rating scores which the Company has achieved for several consecutive years, based on the assessments undertaken by the various organizations concerned. Moreover, all the 12 member companies of Thanachart Group have participated in Thailand’s Private Sector Collective Action Coalition against Corruption (CAC). As well, they have been certified as members of the Collective Action Coalition against Corruption Campaign and have also been allowed to display the CAC symbol beside their corporate names. This clearly demonstrates Thanachart Group’s strong determination to fight against all forms of corruption. In this connection, the Board of Directors reaffirms its commitment to carrying out its duties related to these areas to the best of its ability.
None of the above will happen if all the executives and staff in Thanachart Group do not collaborate with one another in carrying out their duties. Noteworthy are also the continuous support and trust from customers, shareholders as well as all groups of stakeholders. On behalf of the Board of Directors, I would like to thank all of you for your valuable contribution to the success and progressive development of Thanachart Group. I do hope that we will continue to have your trust and also receive your further support as in the past.