Message From Board of Directors
The year 2021 was the second year in which the world was faced the COVID-19 pandemic. As well, Thailand was buffeted by several waves of the COVID-19 infections. As a result, the economic recovery was slow. On the other hand, thanks to spending stimulus measures and easing of containment measures as well as the export which increased in line with the demand recovery in the trading partner countries, the Thai economy registered a growth of 1.6 percent when compared to the year 2020 in which the country suffered a drastic economic contraction of 6.2 percent. However, several businesses and the household section were still hard-hit by the COVID-19 pandemic. The businesses which were most impacted included those related to tourism, hotels, shopping centers and restaurants although the country was opened to foreign tourists in the last quarter of the year.
As for Thanachart Group, the year 2021 was also the second year after the Company underwent restructuring whereby it changed from a bank holding company to a diversified investment company. In particular, it used excess cash to continue increasing its equity stakes in the subsidiaries and associated companies as it foresaw future growth potential in these various companies. The excess cash was also used to support the business operations of all the subsidiaries, ensuring that their financial positions were stable. In addition, through its equity stake in Thanachart Plus, the Company offered asset-based financing services in which it had expertise. The purpose of all these investments was to establish a foundation for generating an appropriate and sustainable return to shareholders in the long term. In the past year, the Company and its subsidiaries increased the value of investments and its shareholdings in its key subsidiaries and associated companies, the statuses as at the end of 2021 of which were as follows:
- Increase in the equity stake in TTB from 20.11 percent to 23.32 percent with the total value of investments amounting to 45,643 million baht.
- Increase in the equity stake in MBK from 22.42 percent to 23.32 percent with the total value of investments amounting to 5,281 million baht.
- Increase in the equity stake in THANI from 58.85 percent to 60.16 percent with the total value of investments amounting to 13,695 million baht.
- Increase in the equity stake in MBK LIFE from 51.00 percent to 100.00 percent with the total value of investments amounting to 1,081 million baht.
As for the performance of the Company and its subsidiaries in 2021, net profit attributable to the Company amounted to 5,287 million baht, representing a decrease of 1,382 million baht or 20.72 percent when compared to the prior year. This was mainly due to the fact that in the first quarter of 2020, the Company recognized a gain from selling its equity stake in AJT, which was a special one-time gain. In case the special gain was excluded, net profit of the Company increased by 1,608 million baht or 43.71 percent. This was mainly due to the stronger performance of the Company and its key subsidiaries. However, the share of profit from investing in the associated companies decreased as they were still impacted by the COVID-19 pandemic. In relation to the asset-based financing services, T-Plus started offering the services since May 2021. Its performance was quite satisfactory with continuous growth.
In 2022, the Thai economy is expected to continue recovering. The major supporting factors include the recovery of domestic demand and tourism in line with the state’s promotion measures as well as the public health measures aiming at mitigating the impacts from the COVID-19 pandemic. Other key factors include the export growth and the government’s investments. The Board of Directors is still of the opinion that the current guidelines for conducting business affairs remain appropriate. These include continuing holding shares in various companies as they are now as well as supporting the business operations of every company, ensuring that they have a stable financial position. In this connection, the Company will consider additional new investments and operate the businesses in which it has expertise in a more proactive manner. Furthermore, the Company plans to expand the business networks of the Group’s various member companies, aiming at generating an appropriate return to shareholders in the long term. Thanks to the stable performance and the likelihood of the recovery of the Thai economy, the Board of Directors has adopted a resolution to make an interim dividend payment of 1.20 baht per share and another resolution to propose to shareholders the second round of a dividend payment of 1.80 baht per share. The combined payments will amount to 3.00 baht share, which is equal to the total dividend payment in the prior year. The combined payments account for 59.50 percent of the net profit attributable to the Company. The Board of Directors expects that the performance of Thanachart Group will continue to be at a satisfactory level and will enable the Company to maintain the fairly reasonable level of dividend payments as in the past.
Sustainable business operation has been one of the matters to which the Board of Directors always pays great attention. In this connection, it announced and put in place the Corporate Governance Policy and the Handbook of the Code of Ethics, the Anti-Corruption Policy, the Risk Management Policy as well as other policies. As well, it requires the subsidiaries to consider announcing and putting in place their policies in line with those of the Company. Importantly, the Board of Directors not only monitors the implementation of the policies but also implements the activities relate to business operations, which are useful to the society. Moreover, it develops business operations and practices, aiming at waste reduction, energy conservation, as well as reduced use of natural resources, which will have good impacts on the environment. In this connection, Thailand’s Private Sector Collective Action Coalition Against Corruption (CAC) renewed the memberships of the Company and all the member companies of Thanachart Group, which marked the 10th consecutive year of their memberships.
Thanachart Group’s member companies continued to be well recognized by external organizations, as evidenced by the several awards they received as follows:
- The Company was ranked as the Best Company 2021 in the financial sector for its stable financial position and the ability to make dividend payments to shareholders continuously. The Company also obtained the excellent level recognized for its corporate governance, based on the assessment survey results given in the Corporate Governance Report 2020 of Thai Listed Companies (CGR) issued by the IOD.
- TNI received the following: (1) A financial rating of “AA-“ with “Stable” outlook by TRIS Rating; (2) 2nd Rank Award at Non-Life Insurance Companies with Outstanding Management Awards 2020, which was organized by the OIC; (3) Best Claims Management Insurance Company Award for two consecutive years; and (4) Best Award at the Product of the Year Awards 2021 under the category of Excellent Group Insurance of the Year for its auto insurance product namely “Thanachart 2+ Complete” for two consecutive years. Another award received was the one from the “Move Forward Community Power” Project, whose objectives were to strengthen local communities and to promote road safety which caused damage.
- THANI was selected by the SET as one of the sustainable stocks on the 2021 Thailand Sustainability Investment (THSI) list, which included 147 listed companies.
- Ms. Pimpaka Nichgaroon, Managing Director of TNS won the Best Economist Award from Asiamoneuy Brokers’ Poll 2021.
- Mr. Pattadon Bunnark, Securities Analyst of TNS was awarded the 2021 Best Mid-small Capitalization Stocks by Institution Investor Ranking (II).
In 2022, the Company plans to consider establishing the Environmental, Social and Governance (ESG) Policy, which will enable it to implement ESG-related activities with more concrete targets and plans which are suitable to Thanachart Group’s business operations as indicated in this 56-1 One Report - Driving Businesses for Sustainability.
The Board of Directors is determined to continue carrying out all its duties to the best of abilities. The purpose is to ensure that the operations of the Company and Thanachart Group’s member companies create a stable performance and generate an appropriate return to shareholders and all the stakeholders concerned under the sustainability management guidelines. As well, we would like to express our thankfulness to all the stakeholders for continuously placing your trust in us. In addition, we would like to thank all the staff for working together well as always.
On behalf of the Board of Directors,
Chief Executive Officer