2017 Financial Results · Siam Commercial Bank PCL. | Analyst Meeting Presentation | 22 January 2018 Page 8 / 34 Provisions (Consolidated, Baht billion) Troubled Debt Restructuring
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Page 1 / 34Siam Commercial Bank PCL. | Analyst Meeting Presentation | 22 January 2018
Analyst Meeting Presentation
22 January 2018
IMPORTANT DISCLAIMER:
Information contained in this document has been prepared from several sources and the Bank does not confirm the accuracy and completeness of such
data, particularly where the data is sourced from outside the Bank. In addition, any forward looking statements are subject to change as a result of
market conditions and the final result may be different to that indicated. The Bank makes no representation or warranty of any type whatsoever on the
accuracy or completion of the information contained herein.
2017 Financial Results
Page 2 / 34Siam Commercial Bank PCL. | Analyst Meeting Presentation | 22 January 2018
PageAgenda
Review of 2017 Results 3-151.
2018 Targets 343.
Economic Indicators and
2018 Strategy & Outlook
17-322.
Page 3 / 34Siam Commercial Bank PCL. | Analyst Meeting Presentation | 22 January 2018
2017 ResultsModerate performance with strong buffers
(Consolidated)
2016
Actual2017
Targets2017
Actual
ROE 14.8% N.A. 12.4%
ROA 1.67% N.A. 1.45%
Net interest margin 3.27% 3.1-3.3% 3.23%
Non-NII growth -3.9% 3-4% -2.2%
Cost/Income ratio 38.7% 40-43% 42.3%
Total loan growth (yoy) 5.8% 4-6% 4.9%
NPLs (gross) 2.67% ≤3.0% 2.83%
Coverage ratio 134.3% ~130% 137.3%
CAR 17.7% N.A. 17.7%
CET1/ Tier 1 14.8% N.A. 15.7%
PROFITABILITY
2017 Highlights
2017 net profit was Baht
43.2 billion, a 9.4% yoy
decrease from higher
provisions, higher OPEX,
lower net insurance premium,
and lower investment gains,
while NII and net fee income
rose yoy.
NIM was at 3.23%, in line
with the annual target of 3.1-
3.3%.
Non-NII declined by 2.2%
yoy largely due to lower net
insurance premium and
lower gain on investments.
However, net fee income
and net trading and FX
income increased yoy.
Coverage ratio improved to
137.3% while NPL ratio rose
yoy but remained within the
2017 guidance.
N.A. = Not Available1/ Excluding large gains from sale of equity investments in 3Q15. If included, 2016 Non-NII would have declined by 17.5% yoy.
1/
INCOME/COST
LOANS/ASSET
QUALITY
CAPITAL
Page 4 / 34Siam Commercial Bank PCL. | Analyst Meeting Presentation | 22 January 2018
Modest top-line growth countered by higher provisions and OPEX led to a decrease in net profit
Profitability
1/ Net profit before impairment provisions, non-controlling interest, and taxes.
Net profit declined by 9.4% yoy due to higher provisions and higher OPEX from investment in digital banking. However,
total income rose moderately mainly from higher NII and higher net fee income while net insurance premiums and gain
on investments decreased significantly yoy.
Net Profit and Operating Profit1/
(Baht billion)
OperatingProfit
NetProfit
2016 2017 4Q16 1Q17 2Q17 3Q17 4Q17
12.7 11.9 11.9 10.1 9.2
17.8 19.7 19.7 20.2 18.9
47.6 43.2
81.7 78.6
+6.7% yoy
-6.1% qoq
-27.7% yoy
-9.2% qoq
-3.8% yoy
-9.4% yoy
Page 5 / 34Siam Commercial Bank PCL. | Analyst Meeting Presentation | 22 January 2018
2017 NII rose by 4.4% yoy due mainly to loan growth of 4.9% yoy together with lower interest expenses on deposits and
borrowings. The same factors also contributed to the 3.9% yoy NII growth in 4Q17.
NIIHealthy NII growth driven by loan expansion and cost of funds management
Net Interest Income(Baht billion)
Yield on Earning Assets
Yield on Loans
Cost of Funds
Costs of Deposits
Net Interest Margin(NIM)
Loan Growth(%yoy)
2016 2017 4Q16 1Q17 2Q17 3Q17 4Q17
4.52% 4.38% 4.57% 4.39% 4.34% 4.38% 4.39%
5.58% 5.38% 5.59% 5.44% 5.40% 5.43% 5.36%
1.55% 1.45% 1.56% 1.48% 1.46% 1.45% 1.41%
1.48% 1.38% 1.49% 1.40% 1.41% 1.39% 1.36%
22.8 22.6 22.8 23.3 23.7
88.4 92.3
3.27% 3.23%3.33%
3.21% 3.18% 3.23% 3.28%
5.8% 4.9%
1.4% 0.7% 0.9% 1.2% 2.1%
+4.4% yoy
+3.9% yoy
+1.8% qoq
Loan Growth(%qoq)
Page 6 / 34Siam Commercial Bank PCL. | Analyst Meeting Presentation | 22 January 2018
Above sector average loan growth in 2017 with an upward trajectory
Credit Cycle
3.5%
4.9%
-10.0%
0.0%
10.0%
20.0%
30.0%
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018F
6-8%
Loan Growth(%yoy)
SCB Loan Growth
Global
financial crisis;
SCB tightened
credit
underwriting
standards
SCB’s market
share growth
strategies in
mortgage, auto
and SME segment
1/ In 2006, the Bank increased its holding in SCB Leasing (then Thai Panich Leasing PCL) from 37.6% to 95.5%.2/ SCB EIC’s estimation as of January 2018
Source: Bank of Thailand’s website (for sector loans growth)
SCB’s
acquisition of
SCB Leasing1/
and market
share gains in
SME segment
Thailand’s
economic
slowdown
2018 SCB Loan
Growth Target
Banking Sector Loan Growth
Estimated Sector
Loan Growth by EIC
4-5%2/
2/
Page 7 / 34Siam Commercial Bank PCL. | Analyst Meeting Presentation | 22 January 2018
Corporate and retail segments continued to drive overall loan growth
Loans Breakdown1/ as at 31-Dec-17
Corporate Loans1/ (Baht billion) SME Loans1/ (Baht billion)
Retail Loans1/
(Baht billion)
Loans1/
(Baht billion)
( ) : Loan breakdown as at 31-Dec-16
Loan growth of 4.9% yoy was driven by corporate and retail segments, while SME loans remained relatively flat yoy.
1/ Including loans classified as NPLs2/ Mainly credit cards and unsecured consumer loans
Loan Growth
+4.9% yoy
1,735 1,777 1,833 1,939
2,035
2013 2014 2015 2016 2017
+6.8% yoy
630 658 646 712 761
2013 2014 2015 2016 2017
-0.1% yoy
349 341 357 365 364
2013 2014 2015 2016 2017
SME17.9%
(18.8%)
Corporate37.4%
(36.7%)
Mortgage31.0%
( 31.3%)
Auto8.8% (8.7%)
Others4.9% (4.5%)
Retail44.7%
(44.5%)
Retail
Others2/
Auto
Mortgage
+15.9% yoy
+3.7% yoy
+6.7% yoy
+5.5% yoy
485 530 576 607 630
190 168 169 169 180 82 80 85 86 100 757 778 830 862 910
2013 2014 2015 2016 2017
Page 8 / 34Siam Commercial Bank PCL. | Analyst Meeting Presentation | 22 January 2018
Provisions(Consolidated, Baht billion)
Troubled Debt Restructuring(Consolidated, Baht billion)
Asset QualityHigher coverage ratio despite slight deterioration in asset quality
NPL ratio stood at 2.83% in 2017, up from 2.67% in 2016,
mainly driven by higher NPLs in SME segment and housing
loans, while NPLs from the corporate segment subsided. The
increase in housing NPLs was due mainly to the one-time
classification in 4Q171/. However, coverage ratio rose to
137.3% at the end of 2017, exceeding the Bank’s target of
130%.
In 2017, loan loss provisions increased to Baht 25.1
billion, equivalent to credit cost of 126 bps, in order to
align existing expected loss principles to those required
under new accounting standard effective in 2019.
Coverage Ratio
Gross NPL %
Non-Performing Loans
(Baht billion)
40.0 42.7
59.0 57.6 65.6
2013 2014 2015 2016 2017
2.14% 2.11%
2.89%2.67% 2.83%
150.8%138.1%
109.8%
134.3% 137.3%
+13.8% yoy
2013 2014 2015 2016 2017
83 75 165 119 126
+11.3% yoy
13.6 13.2
29.7 22.5 25.1
Credit cost(bps)
NPL
PL
-11.8% yoy
27.2 21.2 26.5 30.8 27.1
9.9 8.2
6.5 9.7
8.6
37.1 29.4
33.0 40.5
35.7
2013 2014 2015 2016 2017
1/ One-time classification from irregular and off-schedule mortgage payments.
Page 9 / 34Siam Commercial Bank PCL. | Analyst Meeting Presentation | 22 January 2018
Special Mention(Baht billion)
Lower new NPL formation particularly in corporate and SME segments
Special mention loans increased by 15.9% yoy duemainly to one corporate customer in the miningindustry and higher special mention loans frommortgage segment1/.
In 2017, new NPL fell to 1.71%, from 1.80% in 2016, whichwas due largely to lower new NPLs in corporate and SMEsegments.
In 4Q17, new NPL ratio stood at 0.49%, up qoq from SMEand mortgage segments. The increase in mortgage newNPLs was due mainly to the one-time classification1/.
Asset Quality
1/ One-time classification from irregular and off-schedule mortgage payments.2/ Shows change vs 3Q16.3/ Shows change vs 2015.Green / Red fonts indicate decrease / increase in new NPL formation as a % to total loans from the previous period.
+15.9% yoy
34
63
33
45
52
2013 2014 2015 2016 2017
4Q16 3Q17 4Q17 2016 2017
NPL% 2.67% 2.75% 2.83% 2.67% 2.83%
New NPL% 0.52% 0.38% 0.49% 1.80% 1.71%
NPL% 2.29% 1.90% 1.85% 2.29% 1.85%
New NPL% 0.18% 0.01% 0.10% 0.51% 0.17%
NPL% 6.37% 7.55% 7.61% 6.37% 7.61%
New NPL% 1.08% 0.54% 0.63% 3.23% 2.77%
NPL% 2.25% 2.76% 3.08% 2.25% 3.08%
New NPL% 0.61% 0.70% 0.96% 2.41% 3.07%
NPL% 1.83% 1.75% 1.82% 1.83% 1.82%
New NPL% 0.50% 0.50% 0.54% 1.72% 1.91%
Total
Loans
Auto
Loans
Corporate
SME
Mortgage
2/ 3/
1/
1/
1/
1/
Page 10 / 34Siam Commercial Bank PCL. | Analyst Meeting Presentation | 22 January 2018
Despite lower net insurance premium, net fee income growth remained healthy
1/ Other income includes income from equity interest in affiliated companies, dividend income, and other operating income.
2017 non-NII declined by 2.2% yoy due primarily to lower net insurance premium and lower gain on investments, while
net fee income and net trading and FX income increased yoy. On a quarterly basis, non-NII in 4Q17 rose by 8.9% yoy as
a result of higher net fee income from mutual fund and loan related businesses as well as higher gain on investments.
Non-NII
44.9 43.9
+30.5% yoy
+8.9% yoy
-6.6% qoq
-8.3% qoq
-5.0% qoq
+12.2% yoy
+1.7% qoq
-106.5% yoy
2016 2017 4Q16 3Q17 4Q17-103.3% qoq
33.7% 32.2% 30.1% 32.9% 31.0%
25.6% 24.4% 23.1% 24.9% 23.2%
-2.2% yoy
-49.5% yoy
+6.7% yoy
-36.5% yoy
+5.6% yoy
5.7 2.9
28.4
30.3
6.7 7.1
0.4 0.7 -0.0
7.1 7.9
8.0
1.9 1.9
1.8
9.8
11.4 10.7
Net Insurance Premiums
Net Fee Income
Net Trading
and FX Income
Other Income1/
Gain on Investments
Non-Interest Income(Baht billion)
%Non-NII to Total Income
%Net Fee and Net Insurance
Premium to Total Income
Page 11 / 34Siam Commercial Bank PCL. | Analyst Meeting Presentation | 22 January 2018
1/ Others include brokerage fee, fund transfer, remittance, etc.2/ GMTS stands for Global Markets and Transaction Services, which includes cash management, trade finance, corporate finance andcorporate trust.
Strong fee income growth driven by mutual fund and bancassurance businesses
Fee Income
In 2017, fees from mutual fund and bancassurance businesses significantly contributed to the overall 6.7% yoy growth in
net fee income. On a quarterly basis, 4Q17 net fee income grew significantly by 12.2% yoy due largely to higher mutual
fund and loan related fees.
Net fee income Breakdown
(Baht billion)
28.4 30.3 +6.7% yoy 7.1 7.9 8.0 +12.2% yoy +1.7% qoq
+6.3% yoy +15.0% yoy +10.7% qoq
-6.6% yoy +32.9% yoy +29.4% qoq
+27.8% yoy +33.7% yoy +8.5% qoq
+22.3% yoy +25.6% yoy +36.2% qoq
-0.3% yoy -10.1% yoy -31.1% qoq
-1.3% yoy +1.8% yoy +3.0% qoq
2016 2017 4Q16 3Q17 4Q17
Net Fee Income by Segment
Corporate 25% 23% 25% 28% 23%
SME 9% 8% 8% 8% 7%
Retail 65% 69% 67% 64% 70%
28% 26% 28% 25% 25%
19% 17% 20% 24%16%
7% 8%8% 7%
9%
19% 23% 19% 21%22%
11% 10% 9% 8% 10%
16% 16% 17% 16% 17%Others 1/
Loan related fee
Mutual fund
Bancassurance fee
GMTS 2/
Bank cards
Page 12 / 34Siam Commercial Bank PCL. | Analyst Meeting Presentation | 22 January 2018
Higher CASA with strong growth in savings and current deposits
Deposits grew by 3.3% yoy with strong growth in savings and current deposits despite shrinking fixed deposits, raising
the Bank’s CASA ratio to 65.0% in 2017 from 59.7% in 2016.
Deposits(Baht billion)
Deposit
Growth
2013 2014 2015 2016 2017
Current & Savings Accounts (CASA)
49.3% 55.6% 61.5% 59.7% 65.0%
+3.3% yoy
+27.1% yoy
+11.6% yoy
-10.2% yoy924 842 728 816 732
843 999 1,106 1,149 1,282
56 54 57
62 78 1,823 1,895 1,891
2,026 2,092
Savings
Current
Fixed
Page 13 / 34Siam Commercial Bank PCL. | Analyst Meeting Presentation | 22 January 2018
L/D ratio edged up; however, liquidity ratio remained high
As loans grew by 4.9% yoy surpassing deposit growth of
3.3% yoy, the loan-to-deposit ratio rose to 97.2% in 2017
from 95.7% in 2016.
Loan-to-Deposit Ratio
The Bank currently maintains a daily liquidity ratio of
20% or higher as measured by total liquid assets (at a
bank-only level) to total deposits. If the ratio falls below
20%, corrective action will be immediately considered.
Liquidity Ratio(Bank-only)
Liquid assets primarily comprise cash, deposits, bilateral repo with the Bank of Thailand and investment in government securities.
Liquidity
95.2%
93.8%
97.0%
95.7%
97.2%
90%
92%
94%
96%
98%
100%
102%
2013 2014 2015 2016 2017
24.2%
28.6% 28.8% 28.8%
26.9%
19%
22%
25%
28%
31%
34%
37%
2013 2014 2015 2016 2017
20%
Page 14 / 34Siam Commercial Bank PCL. | Analyst Meeting Presentation | 22 January 2018
2017 OPEX rose by 11.6% yoy due to higher staff costs, marketing and promotion expenses, and premises and
equipment expenses. The higher expenses reflected the implementation of the Bank’s transformation project and new
digital marketing initiatives. Cost-to-income ratio went up to 42.3% in 2017 but still remained within the Bank’s guidance
of 40-43%.
Cost EfficiencyHigher OPEX reflected the Bank’s transformation roadmap towards digital banking
Operating Expenses and Cost-to-Income Ratio
Cost-to-Income
Ratio
Operating
Expenses
(Baht billion)
2016 2017 4Q16 1Q17 2Q17 3Q17 4Q17
14.8 13.5 14.3 14.5 15.4
51.6
57.7
38.7% 42.3% 45.5%40.6% 42.0% 41.9% 44.9%
+6.1% qoq
+3.8% yoy
+11.6% yoy
Page 15 / 34Siam Commercial Bank PCL. | Analyst Meeting Presentation | 22 January 2018
Tier 2
Common Equity Tier 1 / Tier 1
Capital Adequacy Ratio (Basel III)
1/ Excluding net profit for 2H17 in accordance with regulatory requirements. If included, the total capital ratio and CET1 capital ratio under Basel III on a
consolidated basis would have been 18.5% and 16.5% respectively, and on a bank-only basis would have been 18.1% and 16.0%, respectively.
Strong capital position, currently well above the minimum regulatory requirement, together with adequate loan loss
provisions will enable the Bank to withstand any adverse shocks and to pursue any future growth opportunities.
Capital position remained strong to prepare for future growth opportunities and regulatory changes
2017 Regulatory
Minimum
CAR 9.75%
Tier 1 7.25%
1/
Capital Base
Consolidated
2013 2014 2015 2016 2017
Bank-only
CAR 15.3% 16.9% 17.2% 17.4% 17.2%
CET1/ Tier 1 11.8% 13.6% 14.0% 14.5% 15.1%
12.0%13.7% 14.1% 14.8% 15.7%
3.4%
3.3% 3.2%2.9% 2.1%15.4%
17.0% 17.3% 17.7% 17.7%
1/
Page 16 / 34Siam Commercial Bank PCL. | Analyst Meeting Presentation | 22 January 2018
PageAgenda
Review of 2017 Results 3-151.
2018 Targets 343.
Economic Indicators and
2018 Strategy & Outlook
17-322.
Page 17 / 34Siam Commercial Bank PCL. | Analyst Meeting Presentation | 22 January 2018
Key driver estimates (%)1
GDP growth
Policy rate(end period)
Export USDgrowth
THB/USD(end period)
Loan growth(sector-wide)
2017F
4.0
10
1.50
32.6
Non-deposit wealth2
Deposit+BE(sector-wide)
10
3.5
3.9
2017A
3.8
10.0
1.50
32.6
8.6
3.2
3.9
Recovery in exports helped the Thai economy to accelerate in 2017. Expect more investment activities in 2018 with some lingering soft patches in consumer markets.
1. %YOY except for policy rate (% per annum) and exchange rate (THB/USD)
2. Includes bonds, insurance, mutual funds, private funds, pension funds, and retirement funds
Source: SCB Economic Intelligence Center
2018F
4.0
5
1.50
32-33
8-10
4-5
4-5
9M17
11M17
11M17
11M17
11M17
Page 18 / 34Siam Commercial Bank PCL. | Analyst Meeting Presentation | 22 January 2018
The new business paradigm: Boundaries between industries are becoming blurred and will eventually disappear in the context of digital
Page 19 / 34Siam Commercial Bank PCL. | Analyst Meeting Presentation | 22 January 2018
SCB has embarked on the transformation journey since mid-2016 to strengthen itself and position to win in the new business paradigm
Mid 2016 2017
Today
2019
New vision defined
‘Going Upside Down’
To be the ‘Most Admired
Bank’
• Align vision of the future• Future-proof technology platform• Digitize end-to-end process• Build analytics infrastructure and
capabilities• Revamp client coverage and
engagement model
Strategic Alignment and Foundation Transformation
Organization and BusinessModel Transformation
2018
A B
‘Fixing the Fundamentals’
• Lean the Bank to lower cost base and create agility/ immunity under the new paradigm
• Capture blue ocean growth in high margin lending business• Revolutionize acquisition model to upscale digital and
customer base• Build data analytic capabilities across organization• Explore new business model to become ‘Bank as a platform’
Macroeconomicheadwinds
Digital disruption
Consumer behaviors
Regulatory shifts
2020
Siam Commercial Bank PCL. | Analyst Meeting Presentation | 22 January 2018 Page 20 / 34
‘Fixing Fundamentals’: We are revamping our technology platform/ coverage model to uplift customer experience
Digital platform New branch format and operating model
Cloud-based technology
New mobile banking platform
New technology platform
Open-API architecture
Blockchain Big data analytics
Investment centerSCB Express
Business center Service center
Existing branch network rationalization
Sales vs. services separationNew sales model with digital capabilities
New customer onboarding process and SLA
+
Strategic alignment and foundation transformation
A
Siam Commercial Bank PCL. | Analyst Meeting Presentation | 22 January 2018 Page 21 / 34
Technology strategic partners
New business partners
Ecosystems partners
Digital Ventures
SCB Abacus
▪ Wealth management platform▪ Insurance business
▪ Create innovative solutions to support the Bank and the business
▪ Strategically invest in Fintech startups▪ Act as an accelerator
▪ Focus on the development of Artificial intelligence (AI) technology to enhance business operation efficiency and service quality
▪ The first spin-off in the Southeast Asian banking industry
‘Fixing Fundamentals’: We also learn to disrupt ourselves while forming strategic partnership to leapfrog with new capabilities
A
New subsidiaries setup Partnership and alliances
Strategic alignment and foundation transformation
Siam Commercial Bank PCL. | Analyst Meeting Presentation | 22 January 2018 Page 22 / 34
‘Fixing Fundamentals’: Our series of new initiatives launched are getting traction and well-received by the public
A
Strategic alignment and foundation transformation
Siam Commercial Bank PCL. | Analyst Meeting Presentation | 22 January 2018 Page 23 / 34
A different world we are going into, which prompted us to adjust and create immunity to prepare for the new paradigm
B
Organization and business model transformation
Our strategic posture
▪ Embrace the changes / disrupt ourselves and the status quo
▪ Redefine our business model thru tech and data/insights
▪ Be ready to respond promptly once the new paradigm unfolds
A different world we are going into
▪ Transaction fees are disappearing. Lending and wealth management may stay but will likely need to transform
▪ What used to be our assets/strengths may no longer be the case
▪ What the future holds remains largely uncertain / unknown
Siam Commercial Bank PCL. | Analyst Presentation | January 2018
Going Upside Down
B Winning in the new business paradigm requires an extreme shift in our organization and business model
Organization and business model transformation
1. Lean the bank 2. High margin lending 3. Digital acquisition
4. Data capabilities 5. New business model (Bank as a platform)
‘Going Upside Down’: Organization and business model transformationB
Organization and business model transformation
People & culture New technologies
Key enablers underpinning our strategy going forward
Siam Commercial Bank PCL. | Analyst Meeting Presentation | 22 January 2018 Page 26 / 34
‘Going Upside Down’: Organization and business model transformationB
Organization and business model transformation
Lean the bank by leveraging digital technology to lower cost base and create agility/immunity under the new paradigm ▪ Moving from large physical footprint (e.g., branches) and workforce to lighter
and more nimble digital organization▪ Shortening ‘business cycles’ from months to weeks or days
1
3Revolutionize acquisition model to upscale digital/customer base▪ Growing digital user base and migrating customers to digital platform▪ Scaling engagement thru lifestyle payment use-cases and ecosystem
2Capture blue ocean growth in high margin/alternative lending▪ Transforming our business model by leveraging new data capabilities,
innovation and technologies which will enable us to expand into highly attractive businesses, i.e. high margin/ alternative lending
4Build data analytic capabilities across organization▪ Leveraging real-time data-driven insights and predictive analytics to boost
revenue/ productivity while reducing cost/ risk exposure▪ Driving data-driven culture as core part of future culture
5Explore new business model to become ‘Bank as a platform’▪ Engaging with customers – directly or indirectly thru strategic partners – to
fulfill their daily needs while capturing data / insights within ecosystem to drive towards ‘Data as a business’ in the long term
Siam Commercial Bank PCL. | Analyst Meeting Presentation | 22 January 2018 Page 27 / 34
1514132012 16 2022F21F19F 20F18F17E
Cost to incomePercentage
Today
Key “Lean-the-bank” initiatives
Leverage technologies to lower cost in ways that have never been done before:
▪ Branch network optimization, driven by big data analytics
▪ Customer migration to digital/automated channels
▪ Process automation and digitization
▪ Strategic workforce management
Peak transformation cost outlay in 2018 (of THB 40bn transformation budget), resulting in highest C/I
C/I – Run the bank
C/I – Change the bank
3
Pre-transformation avg. ~38%
‘Going Upside Down’: Lean the bank to create agility and cost competitiveness
New cost structure lower than pre-transformation to ensure our cost competitiveness in the new business paradigm
Organization and business model transformation
B1
Siam Commercial Bank PCL. | Analyst Meeting Presentation | 22 January 2018 Page 28 / 34
‘Going Upside Down’: Capturing blue-ocean growth in high margin/ alternative lending using data analytics, innovation and technologies
0
5
10
15
20
25
0 1 2 3 4 5 6 7 8 9 10
Corp
SME
SSME
Personal loan
Credit card
Auto
Mortgage
▪ Leveraging advanced analytics and new digital capabilities to redefine existing business model to ultimately:
‒ Gain market shares from banks and non-banks
‒ Maintain acceptable credit cost/NPL and appropriate risk-return
▪ Continuously extending growth momentum in SCB’s core portfolio
%income (NII+loan-related Non-NII) Portfolio size
%credit cost
SCB’s potential growth areas
SCB’score portfolio
Organization and business model transformation
SCB’s current portfolio profile
B2
Data engagement
Retail
Energy
Supply Chain &Logistics
LivingHealth &wellness
Tech & DigitalServices
Travel
Wealth & Insurance
University
Food & Restaurant
E-commerce
Lifestyle
‘Going Upside Down’: Exploring new business model to ultimately become ‘Bank as a platform’
Organization and business model transformation
B5
No more of the same …
… but a new way of doing business with radically different business model, underpinned by technologies and data insights e.g.,
‒ Predictive ability to project customer needs/propensity to buy
‒ Solutions to address both financials and non-financial needs (thru partners)
‒ Individually customized offerings at moment of truth (seamless)
‒ Limited transactional cost to consumers
Siam Commercial Bank PCL. | Analyst Meeting Presentation | 22 January 2018 Page 30 / 34
‘Going Upside Down’: Transforming our people and culture remains one of the most critical enablers of our transformation journey
Organization and business model transformation
B
Common sense is the new process
“
While technology will come, human engagement will stay
“
We need to turn data into charms
“
Siam Commercial Bank PCL. | Analyst Meeting Presentation | 22 January 2018 Page 31 / 34
Wealth management
▪ Grow AUM and profitability over large client base by leveraging digital enablement
▪ Build new wealth management capabilities to deliver world-class experience to customers
In parallel to transforming who/what we are, we remain committed to enhancing our brick-and-mortar businesses thru digital/data capabilities
Data capabilitiesHuman engagement
(with new roles)Technologies/
Digital platform
Consumer lending
▪ Increase MOA by leveraging digital and data capabilities to uplift customer experience
▪ Grow new revenue stream by focusing on high-margin lending
▪ Lower cost to serve thru digital acquisition
Business lending
▪ Focus on portfolio and revenue de-concentration for corporate clients
▪ Transform business model to become ‘SME ecosystem provider’
▪ Grow SSME client baseleveraging digital and data capabilities
Siam Commercial Bank PCL. | Analyst Meeting Presentation | 22 January 2018 Page 32 / 34
Targets have been set to ensure clear deliverable of SCB Transformation
Customers
Short-term
Long-term
the “Most Admired Bank”
Key performance indicators have been set with clear responsible team and are monitored
closely by the Board of directors
2020 target has been set in line with our vision for each stakeholder
Employees Shareholders
Society Regulators
Leading tech capabilities
Strong strategic
workforce planning
Readying people with new culture
Sustainability and prudence
to society/regulator
Revenue uplift and larger customer
base esp. in small/under-exposed area
Leading in customer
experience
Lower cost-to-serve and more digitized
processes
2018 organization’s KPI
Page 33 / 34Siam Commercial Bank PCL. | Analyst Meeting Presentation | 22 January 2018
PageAgenda
Review of 2017 Results 3-151.
2018 Targets 343.
Economic Indicators and
2018 Strategy & Outlook
17-322.
Page 34 / 34Siam Commercial Bank PCL. | Analyst Meeting Presentation | 22 January 2018
2018 Targets
(Percentage)
2016
Actual2017
Actual2018
Targets
Total loan growth (yoy) 5.8% 4.9% 6-8%
Net interest margin 3.27% 3.23% 3.1-3.3%
Non-NII growth -3.9% -2.2% Up to 5%
Cost/Income ratio 38.7% 42.3% 42-45%
NPLs (gross) 2.67% 2.83% ≤ 3.0%
Coverage ratio 134.3% 137.3% ≥130%
1/ Excluding large gains from sale of equity investments in 3Q15. If included, 2016 non-NII would have declined by 17.5% yoy.
INCOME/COST
1/
LOANS/NIM
ASSETQUALITY
IMPORTANT DISCLAIMER:
The above financial targets are based on the Bank’s preliminary estimates that may change due to the economic conditions and other unforeseen
circumstances that may affect the operational environment. These targets and other related details will be available on the Bank’s website,
www.scb.co.th (Investor Relations > Financial Information > Set Filings), from 22 January 2018 onward.
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