Message From Board of Directors
The Thai economy experienced slower growth in 2023 compared to the previous year, primarily due to a fragmented economic recovery. Specifically, it expanded by 1.9 percent, down from the previous year's expansion of 2.5 percent. The slowdown was mainly attributed to declining exports, which steadily decrease because of reduced demand from trading partners affected by persistently high inflation rates and policy interest rates, as well as prolonged geopolitical tensions. On the other hand, private consumption experienced a positive increase due to the ongoing recovery of the tourism sector. Nevertheless, the stability of the Thai economy remained robust, as overall inflation rates remained within target ranges. Over the past year, the Bank of Thailand’s Monetary Policy Committee incrementally raised the policy interest rate from 1.25 percent per year to 2.50 percent per year. The adjustments aimed to align with the steady recovery of the Thai economy and to bolster the long-term stability of the financial sector.
For Thanachart Group in 2023, the Company successfully implemented the established strategic plans, ensuring the full realization of growth potential for all companies within the Group in alignment with business objectives. Consequently, the Company met its overall performance targets, despite the fragile conditions of the Thai economy. The performance results stemmed from two primary factors: the performance of subsidiaries and associated companies, and the investments used for increasing equity stakes in subsidiaries and associated companies, along with investments used for expanding asset-based financing. As a result, according to the consolidated financial statements, the net profit attributable to the Company amounted to 6,603 million baht, representing an increase of 1,383 million baht or 26.5 percent when compared with the previous year. The Group’s overall financial business grew steadily, after the merger especially in the past year, with the net profit increasing as planned, driven by the post COVID-19 economic recovery and the gradual rise in the benchmark rate. In the insurance business, there was remarkable progress, with total premiums received surpassing 10 billion baht and a growing market share. Similarly, the asset-based financing business also surpassed the set target for credit expansion. Meanwhile, the securities business encountered challenges due to the decrease in securities trading volumes, reflecting the decline in the Thai stock market's trading volumes. However, it managed to attain a satisfactory profit from other areas of securities businesses. This success could be attributed to a business diversification policy that did not solely depend on securities brokerage. As for the hire-purchase and leasing businesses, they experienced challenges due to the fragmented economic recovery, which impacted construction and transportation businesses, as well as retail operators. Additionally issues like seized vehicles, further affected their performance, resulting in a decline in operating results. However, despite these challenges, they were able to maintain a strong financial position.
For the year 2024, the Thai economy is poised to sustain its growth trajectory from the previous year, driven by multiple key factors. These include a promising uptick in exports, as evidenced by the increased export volume in the final quarter of the preceding year. Additionally, further expansion in private sector consumption is anticipated, supported by stable inflation rates and increased spending stemming from improvements in hiring and wages as well as sustained growth in the tourism sector. Nevertheless, the Thai economy continues to confront ongoing risks from household debt issues, the slowdown of trading partners’ economies, and escalating geopolitical tensions. In light of this, the Company's Board of Directors foresees both opportunities and challenges that may arise in 2024. The Board remains committed to pursuing investment prospects in promising new ventures to bolster diversity, stability, and overall Company performance. Concurrently, the Board will ensure that group companies realize their utmost potential in line with business objectives. Emphasis will be placed not only on strengthening the positions of group companies but also on prudently advancing business growth in the future.
Furthermore, the Board of Directors already approved an interim dividend of 1.20 baht per share and proposed a final dividend of 2.00 baht per share, totaling 3.20 baht per share. This dividend accounted for 50.82 percent of the net profit attributable to the Company, representing an increase from the previous year's dividend of 3.10 baht per share.
The Board of Directors oversaw operations and business activities with continuous emphasis on good corporate governance throughout the year 2023, resulting in steady growth and favorable returns for shareholders. Additionally, the Board placed emphasis on securing stability and sustainability in information technology. Consequently, a subsidiary was established to oversee technology systems of companies within Thanachart Group, ensuring their adherence to both good corporate governance principles and sound IT management principles. The subsidiary also stayed abreast of emerging technological advancements, including Generative AI, among others. Moreover, through various sub-committees and work units across the Company and companies within Thanachart Group, the Board of Directors spearheaded efforts to foster the development and implementation of practices aligned with the Environmental, Social, and Governance (ESG) framework. These endeavors were in accordance with the guidelines from the Stock Exchange of Thailand and other relevant organizations dedicated to promoting sustainable business operations. In this regard, Thanachart Group implemented concrete measures to reduce resource consumption and promote social and environmental protection, guided by well-established targets and plans. In 2023, the Company and group companies were well recognized with numerous awards, as disclosed in this report. Importantly, the Company was listed among the companies on the SET ESG stock list. Furthermore, Thanachart Group maintained its commitment to the Thai Private Sector Collective Action Against Corruption (CAC), remaining a member of this organization for over a decade.
The Board of Directors would like to express thankfulness and appreciation for the trust and support from shareholders and all stakeholders. We believe that we will continue to receive the trust and support from shareholders, stakeholders, and all employees in the future.
On behalf of the Board of Directors,
Chairman
Chief Executive Officer
Vice Chairman