EN TH
Email Alerts IR Contact Analyst Contact FAQ Q&A at Analyst Meeting Q&A at Annual General Meeting

1. Investments, Capital Management, and Dividend Payments
  • Q2 profit rose significantly, driven primarily by dividend income. How much capital was allocated across different stock categories to generate such a substantial increase in dividend income, as well as the outlook for Q3 and Q4?

    The Company's investment policy prioritizes long-term investments in high-quality businesses with strong management teams, consistent healthy returns, and robust corporate governance. Financial and insurance sectors represent areas where the Company possesses deep knowledge and expertise. The Company has gradually built up its position in these sectors to nearly 8 billion baht year-to-date, expecting returns aligned with actual market performance. The Company achieved its target returns in Q2 and expects to continue receiving progressive returns across Q3 and Q4.

  • Regarding the announced 7.5 billion baht share repurchase program, the stock price has now risen above 1 times book value. What is the Company’s forward plan? Will the buyback proceed, or will the allocated funds be shifted to dividend payment instead?

    The share buyback program spans 6 months, ending in February 2027. Opportunities to repurchase shares may arise along the way, as the Company views this program as highly beneficial to investors. Regarding excess liquidity, the Company will assess available options that will maximize shareholder value. Should the stock price remain high and repurchase opportunities do not present themselves, excess funds may be allocated to other investment choices.

  • What is the rationale behind TCAP's share buyback this time? Given TCAP's historically conservative approach to capital management, does this decision reflect a shift in outlook, or is it simply due to a lack of attractive investment opportunities, leading the Company to return funds to shareholders?

    In H1, performance across subsidiaries beat expectations, and the investment portfolio generated strong cash flow. As a result, optimizing available capital became a key priority. The Company keeps multiple options open, including exploring and assessing potential investment opportunities across several projects in other businesses. Meanwhile, share repurchases represent a suitable option when the stock price trades significantly below book value, given TCAP's Return on Equity (ROE) of about 12%, which yields strong returns for shareholders through share repurchases.

  • TCAP has been continuously increasing dividend payments. Given this year's relatively good profit, will dividend payments be considered based on dividend per share or dividend payout ratio?

    Dividend payouts are currently under consideration by the Board of Directors. Strong operating performance should generally support favorable dividend levels; however, final decisions depend on Board resolutions, which aim to align dividend payouts with industry benchmarks.

2. Performance of Subsidiaries
TPLUS
  • TPLUS's loan portfolio has declined. Does the overall outlook toward the end of the year suggest that the portfolio will continue to shrink, or will new lending be expanded to stabilize the outstanding balance? Additionally, what is TPLUS's current NPL situation?

    The outstanding loan balance as of the end of Q2 stood at approximately 7 billion baht, against a target of around 8.5 billion baht. TPLUS is currently exercising greater caution in underwriting new loans. The portfolio's loan-to-value (LTV) ratio has declined from roughly 40% to 37%, reflecting prudent credit quality management. While new lending continues monthly, repayments currently outpace new disbursements. Nevertheless, TPLUS remains committed to achieving its target, provided that market conditions through year-end are favorable.

    The NPL ratio stood at 12%, a decrease from the previous quarter and year-end 2025 with total NPL volume decreased. This reduction resulted from focusing on debt negotiations to restructure loans according to individual borrower repayment capacities, with a few accounts successfully resolving their NPL status and fully settling their accounts. Despite existing NPLs, the potential for actual loss remains low because collateral mostly consists of real estate in prime locations with appraised values exceeding disbursed loan amounts. Furthermore, TPLUS continues to target new client segments while considering additional lending to existing clients with strong repayment records, applying strict collateral valuations and maintaining LTV ratios below 40%.

THANI
  • Given that THANI's loan portfolio has been shrinking for the past two years, is there potential for it to stabilize or rebound this year, considering that new loan disbursements are up compared to last year?

    Industry indicators for THANI show signs of improvement, with commercial operators placing a high volume of new truck reservations. However, the Department of Land Transport introduced new safety regulations requiring additional driver-assistance equipment on commercial trucks. Operators are seeking further clarity regarding these requirements before completing new purchases. During this transition, they have delayed taking delivery of new vehicles and shifted focus toward used trucks instead. As a result, THANI's current lending strategy focuses on used trucks—a segment witnessing strong growth and favorable spreads—helping bring disbursements close to the established targets. In Q2, debt collection showed significant improvement, allowing for a reduction in loan loss provisioning. Furthermore, analysis of delinquent accounts past due 6 to 12 months indicates a downward trend in potential NPLs.

  • Given the rise in THANI's NPLs from Q1, what is the outlook for H2?

    THANI reports strong portfolio quality indicators, showing steady, ongoing improvement. Nevertheless, specific sectors remain under pressure, namely transportation, construction, and building materials, warranting a cautious approach. As a result, increased provisioning was set aside for these sectors, leading to higher reported provisions. Overall, the broader trend continues to be highly favorable.

TNI
  • What is TNI's outlook regarding premium growth, insurance claim expenses, and investment income? Additionally, can the H1 profit serve as a new baseline following the adoption of the new accounting standard?

    In H1, TNI performed exceptionally well, achieving revenue growth of 10% compared to industry growth of approximately 2%. TNI's underwriting and pricing policy avoids price competition, focusing instead on risk-reflective pricing. Claim management metrics stayed well-controlled and aligned with established targets. While monthly claims averaged around 26,000 cases, TNI efficiently managed average costs per claim; labor costs did not rise, and although spare parts costs increased slightly by 1–2%, repairs were performed instead of replacements in certain cases to control costs. However, H1 results included a special item—a flood provision reversal of approximately 100 million baht due to excess provisioning from the previous year-end. For core operations, TNI efficiently managed both the loss ratio and combined ratio. Coupled with premium expansion and technology adoption to lower costs, profits are expected to maintain this baseline level.

    On investment performance, TNI recognized substantial dividend income in H1. However, H2 investment revenue is expected to moderate in line with broader equity market dynamics. TNI maintains a capital adequacy ratio (CAR) of approximately 600%, well above the OIC’s special selection criteria. This allows the company to expand its investment portfolio into higher-yielding assets compared to typical peers, driving strong investment income growth. H1’s 70% net profit expansion was driven equally by investment returns and core underwriting growth.

1. Company Investment
  • Investment value in 1Q26 rose substantially, primarily driven by equity investments. Which business sectors did the Company increase its holdings in? What are its future investment plans regarding new areas of interest?

    According to the Company’s investment plan, the emphasis remains on the banking and insurance sectors. The Company plans to build an investment portfolio of approximately 8 billion baht this year. Over the past four to five months, investments have progressed according to plan. The Company prioritizes businesses where it possesses deep knowledge and expertise—namely banking and insurance. Concurrently, it is exploring investments in businesses within banking and insurance ecosystems. Any additional investments must align with the established framework targeting strong business potential, solid operational performance, and high returns.

  • What was the rationale behind investing in TIPH? Is there significant overlap between the insurance portfolios of TIPH and TNI?

    The investment decision was based on the expertise of TIPH’s management team. It was recognized that TIPH was highly knowledgeable and specialized. Regarding the insurance portfolios, there is no overlap; TIPH focuses primarily on corporate accounts, while TNI targets retail customers. Importantly, TIPH has demonstrated excellent business operations with strong risk management and controls. Despite facing two to three rounds of crises over the past few years, the company managed to maintain solid performance and offer a high dividend yield of around 6–7% per annum.

2. The Company has increased its dividend payouts significantly and at a faster pace than in the past. Given the strong Q1 profit growth, is there an opportunity to increase dividends beyond the historical annual increment of 0.10 baht? The current dividend yield is around 6%, slightly lower than the banking sector's yield of 7–8%.

The Company’s strategic direction focuses on delivering consistent returns to shareholders. Provided that Thanachart Group meets or surpasses its targets, the Company will be able to distribute these returns to shareholders. However, the exact scale of any additional payout will be evaluated during Q3 and Q4 of the year.

3. What is the impact of the Middle East war on Thanachart Group’s business operations?

In early March 2026, following the outbreak of the war, the Company convened a workshop with all its subsidiaries to assess potential impact across various scenarios based on the duration of the war. While the immediate impact was initially confined to rising energy costs, the scope of the impact has since expanded to include raw material shortages in certain manufacturing sectors. The Company has categorized the impact into two primary scenarios, focusing on energy costs at US$100/barrel/year and US$120/barrel/year. With Brent crude prices currently fluctuating between US$100 and US$105/barrel, the observable impact lies in consumer purchasing power. Although customers and the general public retain purchasing capacity, they have become noticeably more cautious. This behavioral shift could eventually pressure sales volumes. On the cost side, THANI is closely monitoring asset quality, particularly among SME transport clients who may struggle to pass on rising fuel costs. THANI is proactively engaging with these high-risk accounts to track their performance and restructure debt where necessary. Secured loan segments are also being monitored under close communication frameworks. Regarding operating expenses in the insurance sector, the focus is on claims management costs. For automobile insurance, this involves spare parts and repair labor. Current data indicates that most spare parts are sourced from China. As a result, this specific cost component has remained stable. However, an anticipated headwind is the rising repair labor costs due to wage adjustment demands. The insurance business is actively adjusting its operational workflows to optimize claims management. As a result, cost impacts remain manageable. On the other hand, the investment portfolio faces ongoing volatility. However, the investment team continues to monitor the situation closely and identifies opportunities to achieve targeted investment yields. In summary, if oil prices stabilize around US$100/barrel, the overall impact will remain relatively limited, and all group companies are expected to meet their respective performance targets.

In Scenario 2 in which oil prices rise to US$120/barrel and raw material shortages occur in certain sectors, most member companies of Thanachart Group are not directly impacted. However, as the situation intensifies, the impact mentioned in the first scenario will escalate, causing operating results to fall below planned targets. Nonetheless, the Company remains confident that performance will remain above prior-year levels. The Company continues to actively monitor the situation and its evolving impact on Thanachart Group's businesses.

4. Did TNI’s 100% quarter-on-quarter profit growth stem from any extraordinary items?

TNI’s Q1 2026 sales grew strongly, in line with its full-year target of 13%. This performance was further supported by effective cost controls in claims management, which reduced overall costs by approximately 5%. Additionally, following the Hat Yai floods in 4Q25, substantial loss provisions were set aside, fully impacting that quarter's financial statements. Moving into 1Q26, actual incurred losses proved manageable and lower than provisioned. Consequently, approximately 100 million baht in provisions was reversed. Flood-related claim settlements are now largely finalized, though a few customers have yet to bring in their vehicles for repairs. However, these outstanding cases are already covered by the existing provisions.

5. What is the outlook for TNI and THANI in Q2 and Q3 2026?

TNI has delivered strong operating results and maintains a positive trajectory heading into Q2 and Q3. Barring any unprecedented external headwinds, TNI is expected to meet its established performance targets.

THANI is maintaining a cautious, watchful stance. With respect to new lending, the company is placing heavy emphasis on stringent credit quality control. During the first two months, THANI aggressively expanded its lending activity to grow its loan portfolio. However, credit extensions were deliberately curbed, following the outbreak of the war. Consequently, asset quality has steadily improved, with the NPL ratio remaining low at approximately 2% and the coverage ratio rising to a healthy level of around 160%. Financial performance for Q2 and Q3 is projected to remain in line with planned targets.

6. What factors caused 1Q26 provisions to be so low at just 28 million baht? What is the trend for the remainder of the year, given the impact of rising oil prices?

The low provisions were mainly attributable to THANI, which managed its risk efficiently throughout 2025 through systematic debt restructuring, effective receivable collection, and stringent risk control. Previously, repossessed cars in inventory peaked at around 1,000 vehicles. However, the inventory has now been managed back down to a normal level of approximately 300 vehicles.

Concurrently, 1Q26 saw a 71 million baht release resulting from the reversal of Expected Credit Losses (ECL) on investments. This was primarily related to equity investments in Thai Airways, as the stock resumed trading on the Stock Exchange of Thailand since early this year. Consequently, the provisions previously set aside for this investment were released. Moving forward, this investment will be marked-to-market based on current market prices.