TBANK: Annual Report 2009 ENG

Financial Highlights

Message from Chairman of the Board of Directors

Message from Chief Executive Officer

Message from Our Strategic Partner...Scotiabank

Thai Economic Condition in 2009 and the Outlook for 2010

Management Discussion and Analysis of Financial Position and Performance

Nature of Business Operations

Risk Management and Risk Factors

Corporate Governance

Report of The Nomination and Remuneration Committee

Supervision and Management Structures

Board of Directors and Management Team

Responsibilities of the Board of Directors for Financial Report

Report of the Audit Committee

Report of Independent Auditor

Financial Statements and Notes to Financial Statements

Related Party Transactions

General Information

Investment of Thanachart Bank in Other Companies

Thanachart Bank’s References

Structure of Major Shareholders

Dividend Policy

Companies in Thanachart Group

Branches of Thanachart Bank

Corporate Social Responsibility

02

12

14

16

22

26

39

55

67

85

86

87

101

102

103

104

172

184

194

Being a business group, with cooperation from every department, that offers fully integrated financial services with focus given on providing excellent quality of services and product development to be able to respond to every financial need of its target customer groups.

1. We intend togrowbydoubling the size ofCorporate LoanPortfoliowhile diversifying

overallassets.

2. Weintendtogrowbymaintaininghirepurchasemarketleader.

3. Weintendtogrowbyincreasingfee-basedincomeproportion.

4. Weintendtogrowbyincreasingservicesandsupportsproductivity.

VISION OF THANACHART GROUP

FOUR STRATEGIC INTENTS FOR THE BUSINESS OPERATION IN 2010

�ANNUAL REPORT �009

THANACHART BANK PUBLIC COMPANY LIMITED

As at and for the year ended 31 December

400,000

350,000

300,000

250,000

200,000

150,000

100,000

50,000

0

2009

3.7

3

3.1

7

2.6

5

3.6

6

3.1

4

CONSOLIDATED

�009 �008 �007 �009 �008 �007 �006 �005

Operating results (Million Baht)

Interest and dividend income 21,470 20,688 17,488 20,934 19,897 17,123 15,520 5,309 Interest expenses 6,736 9,398 9,396 6,791 9,429 9,386 9,510 2,837 Net interest income 14,734 11,290 8,092 14,143 10,468 7,737 6,010 2,472 Non-interest income 18,403 10,700 6,111 2,815 2,286 2,005 1,318 791 Total income(1) 33,137 21,990 14,203 16,958 12,754 9,742 7,328 3,263 Non-interest expenses 24,177 15,535 9,905 9,125 7,788 6,105 5,744 2,295 Bad debt and doubtful accounts(2) 3,107 3,968 2,692 2,830 3,548 2,606 1,254 606 Net income(3) 4,056 1,870 1,327 3,547 1,304 991 225 362

Basic earnings per share (Baht) 2.19 1.08 0.84 1.91 0.75 0.63 0.15 0.42 Return on average assets (ROAA) (Percent) 1.06 0.56 0.47 0.96 0.41 0.36 0.10 0.27 Return on average equity (ROAE) (Percent) 17.01 8.79 7.47 15.20 6.22 5.52 1.48 2.99 Interest spread(4) (Percent) 3.73 3.17 2.65 3.66 3.14 2.73 2.30 1.93 Cost to income ratio(5) (Percent) 72.96 70.65 69.74 53.81 61.06 62.67 78.38 70.33 Cost to income ratio net insurance premium income(6) (Percent) 56.51 60.09 62.11

Loans 285,515 276,142 228,776 282,577 272,925 224,940 200,652 158,697 Total assets 432,970 378,347 300,787 413,878 368,272 291,098 257,436 195,525 Deposits and short-term borrowings 341,496 317,243 248,193 342,664 318,760 248,084 214,506 149,301 Total liabilities 405,098 357,006 279,807 387,523 347,002 270,402 242,237 180,225 Shareholders’ equity(7) 27,811 21,278 20,923 26,355 21,270 20,695 15,199 15,300

Operating performance

Balance sheet information (Million Baht)

LOANS AND DEPOSITS AND SHORT-TERM BORROWINGS INTEREST SPREAD

FINANCIAL HIGHLIGHTS

(1) Total income = Net interest income + Non-interest income (2) Including loss on debt restructuring (3) Excluding minority interest (4) Interest spread = Yield-Cost of fund

2008 2007 2009 2008 2007 2006 2005

4.00

3.50

3.00

2.50

2.00

1.50

1.00

0.50

0.00

2009 2008 2007 2009 2008 2007 2006 2005

2.7

3

2.3

0

1.9

3

285,5

15

341,4

96

276,1

42

317,2

43

228,7

76

248,1

93

282,5

77

342,6

64

272,9

25

318,7

60

224,9

40

248,0

84

200,6

52

214,5

06

158,6

97

149,3

01

Yield = Interest and dividend income/Average earning assets Earning assets = Interbank and money market from interest bearing + net investment + loans Cost of fund = Interest expenses/Average paying liabilities Paying liabilities = Total deposits + interbank and money market from interest bearing + total borrowings

Consolidated Financial

Statements

Loans Deposits and short-term borrowings

Separate Financial Statements

(Year) (Year)

(Millon Baht) (Percent)

SEPARATE FINANCIAL STATEMENTS


Statements


�ANNUAL REPORT �009


Balance sheet quality

Loans to deposits and short-term borrowings ratio (Percent) 83.61 87.04 92.18 82.46 85.62 90.67 93.54 106.29 NPL-gross to total loans (Percent) 2.57 2.37 2.41 2.49 2.30 2.31 1.87 2.26 NPL-net to total loans (Percent) 0.58 0.58 0.78 0.59 0.60 0.81 0.83 1.95 Coverage ratio(8) (Percent) 96.41 94.99 92.07 92.33 88.81 86.80 81.59 51.95 Total allowance to BOT regulation (Percent) 111.45 112.75 121.72 102.85 101.55 108.38 104.65 101.42 Non-performing loans (NPL) (Million Baht) 8,675 7,466 5,520 8,359 7,167 5,213 3,753 3,582

Tier I capital ratio (Percent) 8.65 8.02 10.15 8.81 15.37 Total capital ratio (Percent) 14.10 11.18 12.00 11.13 17.26 Risk weighted assets (Million Baht) 273,366 252,634 197,128 175,806 100,787

Common shares outstanding (Million Shares) - Average-basic 1,854 1,735 1,584 1,854 1,735 1,584 1,458 851 - End of period 1,935 1,735 1,735 1,935 1,735 1,735 1,458 1,458 Book value (Baht) 14.38 12.26 12.06 13.62 12.26 11.93 10.42 10.49 Dividends per share (Baht) 0.56 0.43 0.15 0.25 0.25 Employees 9,456 9,630 6,210 7,470 7,534 4,603 3,978 2,645 Branches 256 213 166 133 66 Exchange booth 92 76 64 42 8

Common share information

Other information

6,000

5,000

4,000

3,000

2,000

1,000

0

NET INCOME

Capital measures

As at and for the year ended 31 December

2009 2008 2007 2009 2008 2007 2006 2005

2.00

1.80

1.60

1.40

1.20

1.00

0.80

0.60

0.40

0.20

0.00

20.00

15.00

10.00

5.00

0.00

(5) Cost to income ratio = Non-interest expenses/Total income (6) Cost to income ratio net insurance premium income = (Non-interest expenses-Insurance and Life insurance expenses)/ (Total income-Insurance and Life insurance expenses)

(7) Excluding minority interest (8) Total allowance/NPL

4,0

56

1,8

70

1,3

27

3,5

47

991

225

362

1,3

04

(Million Baht)

RETURN ON AVERAGE ASSETS (ROAA) AND RETURN ON AVERAGE EQUITY (ROAE)

2009 2008 2007 2009 2008 2007 2006 2005

Return on average assets (ROAA)

Return on average equity (ROAE)

17.0

1

8.7

9

7.4

7

15.2

0

6.2

2

5.5

2

1.4

8 2.9

9

ROAE

(Percent)

1.0

6

0.5

6

0.4

7

0.9

6

0.4

1

0.3

6

0.1

0

0.2

7

CONSOLIDATED

�009 �008 �007 �009 �008 �007 �006 �005

SEPARATE FINANCIAL STATEMENTS


Statements



Statements


ROAA

(Percent)

(Year) (Year)

Year

12ANNUAL REPORT 2009


It has been a full year that the Thai economy

hasbeenweatheringthroughtheglobalfinancialcrisis.

Throughout theperiod,economic forecastswerehighly

subjected to uncertainties that largely depended on

globaleconomicsituations. In the firstquarterof2009,

the Thai economy contracted to the trough of the

economic cycle at a rate of 7.1 percent. Nonetheless,

short and long-term stimulus measures were put

in place to cushion the downfall which has led the

Thai economy to a satisfactory improvement in the

second and third quarter. During the first nine months

of 2009, the economy’s rate of contraction averaged

only 5 percent before reverting to a positive growth

of 5.8 percent in the last quarter, the first expansion

afterthecrisistookplace.Asaresult,theThaieconomy

in2009underperformedthepreviousyear’soutputonly

by2.3percent.

Regardless of the climate of economic crisis

anduncertainties,Scotiabankhascontinued tobelieve

in TBANK and has increased its shareholdings from

24.98percentto48.99percentinthebeginningof2009.

Consequently and accordingly to the Shareholder’s

Agreement, Scotiabank sent more directors and

executiveswhohavebecomemorethaneverengaged

inmanagementandbusinessoperations.Thesuccessful

cooperation among the management team of TBANK

anditssubsidiaries,includingthemanagementteamof

Scotiabank, and employees at all levels resulted in

MESSAGE FROM CHAIRMAN OF THE BOARD OF DIRECTORS

MR. BANTERNG TANTIVIT

ChairmanoftheBoardofDirectorsThanachartBankPublicCompanyLimited



superior development in products and services,

business channel expansion, and infrastructure

system development. Maintaining a market leader

position in the hire purchase business, loan portfolio

diversification, as well as, an outstanding financial

performance were the end results of exceptional

synergy of all parties. In 2009, TBANK and its

subsidiaries’ satisfactory results was a net profit of

THB 4,056 million, an increase of THB 2,186 million

or 116.95 percent growth from the previous year.

Loan spread hiked from 3.72 percent to 4.69 percent

whilenon-interestincomeroseby73.36percent.

In2009,therewasachangeinthecomposition

of the Board of Directors. Two new Directors

were appointed, naming, Assoc. Prof. Dr. Somjai

Phagaphasvivathana and Mr. Kobsak Duangdee

to replace Mr. Suvit Arunanondchai and Mr. Vichit

Yarnamorn who resigned due to other commitments.

Two additional Directors were also appointed,

Mr. Somjate Moosirilert, a representative of TCAP,

and Mr. Martin Weeks, a representative from

Scotiabank. As a result, the Board of Directors now

consists of four representatives from each of TBANK’s

twomajorshareholders–TCAPandScotiabank–andfour

IndependentDirectors,thusconstituting12Directorsall

together. All Directors are knowledgeable and skilled,

with experience in finance and management along

with other disciplines, enabling both management

and operation of TBANK to fulfill its duties and

responsibilities to shareholders, customers and other

stakeholders.

In 2010, the global economy is expected

to revive. In any case, TBANK’s Board of Directors

continues to firmly press on its duties and

responsibilities and wholly commits to the business

plan, together with the management team. The Board

honors all commitments with good corporate

governance along with a constant awareness on the

ever-changing economic climate, in order to deliver

excellentperformancesofTBANKanditssubsidiaries.

With an announcement of the Financial

InstitutionsDevelopmentFundtoselltheir47.58percent

shareofSiamCityBank,theBoardofDirectorsdeemed

that this would be a good opportunity for business

expansion, and therefore, TBANK participated in the

bid. At present, TBANK has won the bid and has

alreadysignedtheSharePurchaseAgreementwiththe

Financial Institutions Development Fund. Upon the

shareholders’ approval for the merger with Siam City

Bank at the Annual General Meeting of Shareholders

thisyear,theentirebusinesstransferwouldbecomplete

andTBANKwouldbecomethefifthlargestbankamong

theThaicommercialbank industrywithgreaterstability

andcompetitiveadvantage.

AsChairmanoftheBoardofDirectors,Iwould

liketothankallDirectors,executivesandemployeesfor

theircontinuousdedication.Iwouldalsoliketothankall

stakeholders for your trust and support for TBANK to

develop and grow together with stability and

sustainability.

Banterng Tantivit ChairmanoftheBoardofDirectors

ThanachartBankPublicCompanyLimited



GATHERING MOMENTUM

MR. SUPHADEJ POONPIPAT

ViceChairman,ChairmanoftheExecutiveCommitteeandChiefExecutiveOfficerThanachartBankPublicCompanyLimited

TBANK and its subsidiaries are still moving forward in developing capabilities to achieve customer centricity throughcreatingnewproducts,developingandsetting up infrastructure and increasing service channelsinordertoexpandbusinessandincreaseservicequality.Thisisdonetocreate financial opportunities for customers to succeed and grow together stably and continuously, which are the basis for operations that can achieve the goals of being a leading medium-size bank in the country with strong and excellent growth.In2009,TBANKandits

subsidiaries conducted businesses according to thefollowingninestrategicintents: 1. Intentiontomeetallstrategicfinancialtargets, 2. Intention to maintain market leader in hirepurchasebusiness, 3. Intentiontoincreaseincustomeraccessibility, 4. Intentiontodiversifybusinessloanportfolio, 5. Intention to develop drastic improvement incross-selling, 6. Intention to grow by increasing fee-basedincomeproportion, 7. Intentiontoenhanceourproductivityandcosteffectiveness, 8. IntentiontoachieveBest-in-Classincustomerservicing,and 9. Intentiontobuild-upourbrandstrengthening. Scotiabank formed a business alliance withThanachart Group in 2007 and showed confidence intheGroupby increasing its shareholding in TBANK from24.98percent to48.99percent in thebeginningof2009.Asa resultof the jointdevelopmentofThanachartGroupand Scotiabank in accordance to the business policiesand under the supervision of the Board of Directors,the determination to achieve the nine strategic intentsmentioned,and thecommitment from theexecutivesandemployees, TBANK and its subsidiaries have achievedsatisfactory growth and financial results. At the end of2009, TBANK and its subsidiaries had total assetsamountedtoTHB432,970million,an increasefromTHB378,301 million. As a result, TBANK and its subsidiariesbecame to be ranked number 7 among 17 Thaicommercial bank industry. TBANK and its subsidiariesachieved a net profit for 2009 of THB 4,056 million, anincreaseofTHB2,186millionor116.95percent from thepreviousyear.This resulted fromthecontinuingbusiness



expansion,interestspreadincreasingfrom3.72percentto4.69percent,thenon-interestincomeincreasingby73.36percent from commercial banking business, securitiesbusiness, fund management business, life and non-lifeinsurance business, and the efficient managementof expenses. This resulted in cost to income ratio netinsurance premium income decreased to 56.51 percentfromthepreviousyear’sfigureof59.88percent.Moreover,expensesonbaddebtanddoubtfulaccountsdecreasedby21.69percent. In order for the executives and employees ofThanachartGroup tomove forward in thesamedirectionin 2010, Thanachart Bank has set the following fourstrategicintents: 1. Intention to grow by doubling the size ofCorporateLoanPortfoliowhilediversifyingoverallassets, 2. Intention to grow by maintaining hirepurchasemarketleader, 3. Intention to grow by increasing fee-basedincomeproportion,and 4. Intention to grow by increasing servicesandsupportsproductivity. BecauseofthedirectionoftheBoardofDirectorsthat places great importance in making TBANK andits subsidiaries to be the organizations of goodgovernance, the Board of Directors has set policies tocontinuously develop human resources of ThanachartGroup in the areas of good governance. In 2009,ThanachartGroup,togetherwiththeContinuingEducationCenterofChulalongkornUniversity,continuedtoorganizetraining and seminars for the executives and theemployees, including disseminating knowledge andunderstanding of the topics through Thanachart Group’sE-learning to provide knowledge and understanding ofgood corporate governance and promote consciousawarenessofgoodcorporategovernance.Thisisdonetosolidify the foundation of being organizations of goodgovernancethatoperatewithtransparency,adheretotheprinciples of good governance, and create long-termbenefits for investors. Furthermore, TBANK and itssubsidiariescontinuedtheCorporateSocialResponsibilityProjects through hubs and the projects are thecooperation of the organization, the employees, thecustomers and the community to help underprivilegedcommunities that have varying needs for each region.

This is in line with the concept of “Ri Rerm..Term Tem”(Initiate and Fulfill), which is to initiate projects thatare appropriate and coherent with the true needs ofcommunities in each region in order to unite and trulycreate fulfillment for the communities. In 2009, TBANKintroduced the project “Donating via ATMs with TBANK”(Make merits through ATMs with Thanachart Bank) thatallows those who hold Thanachart Bank’s ATM cards tomake monetary donations through the Bank’s ATM andcountersatbranchesnationwideforcharitablefoundationswithoutservicefees.Thisisanotherchannelthatsupportsdoinggoodforthecommunity. TBANK’swinof thebiddingforSiamCityBank’sstocks from Financial Institutions Development Fund(FIDF)andthesigningofthecontractsforthepurchaseofthe Siam City Bank’s stocks on 11March 2010 had theobjective of purchasing the stocks to acquire thebusinesses of Siam City Bank, with the approval of theBank of Thailand. Once the acquisition is completed,TBANKwillbeafinancialinstitutionofgreaterstabilityanda commercial bank with the 5th highest ranking assetsamong Thai commercial banks. This will promote thestability of Thai financial institutions in line with theFinancialSectorMasterPlanPhaseII. The continuous joint development between Thanachart Group and Scotiabank that fulfill all financial services under good corporate governance with utmost regards to customers, shareholders, employees and all stakeholders, and the reasonable social and environmental contributions will make Thanachart Bank grow stably and continuously together with all stakeholders.

Suphadej Poonpipat ViceChairman,ChairmanoftheExecutiveCommittee

andChiefExecutiveOfficerThanachartBankPublicCompanyLimited



MESSAGE FROM OUR STRATEGIC PARTNER...SCOTIABANK

MRS. MICHELE KWOKSeniorVicePresident/RegionalHead,Asia/PacificandMiddleEast,Scotiabank

Despite difficult global economic conditions,

Thanachart Bank had an excellent year in 2009,

generating record results. The Bank’s fundamental

strengths of prudent risk and cost management and

strong liquidity andcapital positions positioned theBank

wellinthesechallengingtimes.

The management team and with ongoing

assistance from Scotiabank, continued to focus on our

coreprojectsandwehaveseenstrongprogressonmany

frontsin2009.ThanachartBankremainstheleaderinthe

autohirepurchasemarkethelpingapproximately200,000

customerspurchasetheirvehiclein2009.Withassistance

from Scotiabank, the ongoing re-engineering and

automation of the collections process reduced risks and

increased returns in this business. This process will

continue in 2010 with the completion of the automation

and centralization of the collections and underwriting

processes.

Efforts to diversify the Bank and build on the

strengths of the HP business also continue with strong

cross sell driving increased growth in insurance, mutual

funds and low cost desposits through the expanded

branchnetwork.Aswell,productdiversificationcontinues

withstronggrowthachievedincommercialandcorporate

lending and most recently through the introduction of

creditcardproductswhichfocusonmeetingtheneedsof

theBank’sHPanddepositcustomers througha focused

value proposition tied to auto-related services.

Thanachart Bank will continue to expand its credit card

offerings in 2010 to meet the lifestyle needs of our

customers.



Enhancingoursystemscapabilitiesalsoremains

apriority for ThanachartBankandScotiabank is utilizing

our global information technology expertise to assist the

Bank, with new trade finance, treasury and collections

systemsbeingsuccessfully implementedin2009.Wewill

looktofurtherassisttheBankin2010intheareasofcash

management, internet banking and loans system

enhancements.

Scotiabank too hasperformedvery well through

theglobal financialcrisis.Withour fundamentalstrengths

ofdiversificationbybusinessandgeography, strong risk

and cost controls and focus on building sustainable

revenue growth, Scotiabank generated strong financial

results in 2009 with net income of C$3.547 billion,

a13percent increaseover2008.Scotiabank isverywell

positioned, with strong earnings, liquidity and capital,

toprosperintheyearsahead.Weremainfocusedonour

keypriorities,oneofwhichisworkingcloselywithpartners

like Thanachart Bank, to deliver solutions to the needs

of our customers throughout the 50 countries in which

wedobusiness.

With the strong foundation in the HP business

and with substantial growth achieved through the cross

sellofotherproducts,ThanachartBankisbuildingdeeper

relationships with its customers and is well placed to

prosper now and into the future. We remain confident

about the future of Thailand and Thanachart Bank and

Scotiabank will be there to continue to work closely with

ourcolleaguesatThanachartBanktohelpbuildtheBank

as it serves it customers and communities throughout

Thailand.

MR. BRENDAN KINGVicePresident,CorporateDevelopment,Asia,Scotiabank



The Thai economy has undergone a full year of

theglobaleconomiccrisis.Asaresult,theoutlookforthe

economy during the past year was subject to large

uncertainties that primarily depended on the world

economic situation. Around the end of 2008, the first set

of forecast released under the crisis estimated that the

Thai economy would have a zero-growth or contract by

1.0 percent per annum in 2009, under the views from

variouseconomicinstitutionsthattheworldeconomywould

expandatarangefrom(-0.5)to0.5percentperannum.

At the beginning of 2009 when the global

financial crisis revealed its worse-than-expected

symptoms, the world economic outlook was repeatedly

reviseddown.Thecontractionof7.1percentyearonyear

of the Thai economy in the first quarter led to the

expectation that the annual economic contraction would

rangefrom3to4percent.Inaddition,theunemployment

rallied from approximately 500,000 workers from the end

2008toapproximately900,000workersinJanuary2009.

As a result of the severe economic conditions,

authorities has urgently issued the economic stimulus

measurestocushionforadeepplungeinprivateincome

and consumption which could lead to an overly adverse

impact on production, investment and unemployment.

The short-term measures, therefore, were the emergency

packages to directly inject cash to the people’s hand

in the fastest fashion as well as to help reduce the

burdens on their cost of living, especially those with low

income, the elderly and the parents. This included the

economic sectors that have been severely impacted,

forinstance,tourismindustriesandtheSmallandMedium

Enterprises(SMEs).

Most of the measures in the stimulus packages

wereplannedtobe implemented in thesecondandthird

quarter under the additional budget of approximately

THB116billioninthefiscalyear2009.Furthermore,there

weretaxmeasurestohelpalleviatetheimpactofthecrisis

on the private business such as those in the real estate

sectors as well as the individuals. These measures were

alsoaccompaniedbytheeasedmonetarypolicywiththe

policy interest rate brought down from 2.50 to 1.25

percent per annum. Moreover, there were measures

relatedtotheSpecialFinancialInstitutions(SFI)underthe

supervision of the government to capitalize as well as

tospeeduptheircreditexpansiontothepublicaswell.

After the onset of the short-term measures,

thegovernmentviewed that theglobal financialcrisiswas

still highlyuncertainand its impact to theworldeconomy

could be prolonged. The government therefore deemed

that therewasaswellaneedfor the long-termmeasures.

Thepreparedpackagesfocusedonthepublic investment

towards2012tostimulatetheeconomicgrowth,investment

opportunity to the private sector as well as investment

projects to enhance the country’s competitiveness in the

periodsahead.Theframeworkoftheseinvestmentprojects

couldbecategorized into sevensectors include irrigation

development and agriculture, basic infrastructure

especially logistics, tourism,creativeeconomy,education,

healthcareand the small investmentprojects indifferent

areas.Thesemeasuresweretheplansinpreparationunder

the circumstances that the financial crisis would extend.

The budget allocation under these measures was

approximately THB 1.4 trillion to stabilize the economic

growth and shore up investors’ confidence towards the

Thaieconomicoutlook.

THAI ECONOMIC CONDITION IN 2009 AND THE OUTLOOK FOR 2010*

*Dr.PorameteeVimolsiri,DeputySecretaryGeneral,NESDB,2March2010



Sources of funds for such investment would

come from the revenue of government and state

enterprises, loans and joint venture between public and

private sectors. Nonetheless, the declining government

revenue due to the economic slowdown could require

more government loan to cover the discrepancy and the

figure could exceed the borrowing ability of the

governmentallowedintheBudgetManagementLawand

PublicLendingPractice.Thegovernmentthereforehadto

seekapprovalfromtheParliamenttoissuetheEmergency

Decree and Act empowering the Ministry of Finance to

borrow for economic restructuring in the amount of THB

800 billion. This funding plan was consistent with the

country’s fiscal sustainability with the ratio of the public

debt to GDP peaking at 56 percent in 2012 and would

graduallysubsume.

TheThaieconomyhasimprovedandcontracted

byaslowerrate in thesecondandthirdquarterof2009.

During the first 9 months, the slowdown was reported at

5.0 percent with manufacturing sector contracted by

9.8 percent; transportation, communication, hotel and

restaurant sloweddownat5.2percent from theprevious

yearbutfinancialsectorwasabletogrowby4.0percent.

On the expenditure side, the private investment

contracted15.4percentwhilequantityofexportsofgoods

andserviceswasalsodownby17.8percent.Furthermore,

indicators during the latter half of the year revealed the

continuedrecoveryoftheThaieconomyincluding:

• Thecapacityutilization rate inmanufacturing

sectorplungedtothebottomat54.8percent

inFebruaryandreboundedto70.1percentin

December, especially in the export-oriented

industriesastheglobalmarketrevealedsigns

ofgradualrecovery.

• Unemployment rate that reached its peak at

2.4percentinJanuary,amountingto878,900

unemployedworkers,graduallydeclinedtoa

1.1 percent in October or down to 410,500

unemployedworkers.

• Tourism sector rebounded somewhat

in January when the number of tourists

expandedby45.2percentandtheoccupancy

rateclimbedupto57percentfromitstrough

at40.8percentinJune.

• Exports also rebounded in various sectors

since the second quarter, leading to the

growthof17.3percentinDecemberfromthe

highest contraction of 26.5 percent in May.

In 2010, the further implementation of the

AFTA was also expected to give rise to the

Thai exports to the regional market such as

exports of trucks and commercial car to

MalaysiaandIndonesia.

• Theagriculturalpricesstartedtoreboundwith

the world economic recovery as well as the

shortage of rice in the major exporting

countriessuchasVietnamandthePhilippines

due to bad weather conditions. More

importantly,thepriceofrubberthatisamajor

raw material in the tire industry rebounded

from the lowest levelofTHB43perkilogram

to the highest at THB 81 per kilogram

in December. This sharp increase could

suggest that the world auto industry was

headingtowardtherecoveringtrend.

As are result, the Thai economy expanded

5.8percentinthefourthquarter,thefirstexpansionsince

thecrisis.Overall,thisbroughtaboutthemoderateannual

rate of contraction for 2009 of 2.3 percent and headline

inflationof-0.9percent.

During the entire year, deposits of the

commercial banks expanded at 0.7 percent which was

a slowdown from the growth rate of 8.5 percent in the

previous year. In the first half, deposits including bills of

exchange accelerated due to the inflows of funds from

investment in other risky assets as concerns over the

economygrew.However,inthelatterhalfoftheyear,such

worries subsumed, resulting in the reallocation of

investments back towards the higher risk assets. On the

lending side, private lending grew at only 3.0 percent

which was a major decline from 9.3 percent growth in

2008. The expansion was contributed solely by loans to

households while corporate lending contracted.

Nonetheless, in the last quarter when the signs of

economic recovery became more apparent, total credits

in the depository institutions rebounded and expanded

at 6.8 percent from 4.7 percent in the third quarter.



The higher rate of growth in credits relative to deposits

resulted in a slight decline in excess liquidity in

commercial banking system from THB 1.35 trillion in the

third quarter to THB 1.32 trillion in the fourth quarter.

Interestrateonthe12-monthdepositwasat0.70percent

and the MLR staged at 5.86 percent during the last

quarteroftheyear.

Duetotheclosemonitoringofcommercialbanks

on credit quality during the crisis, the non-performing

loansslightly increasedand trended towards thedecline

inthelastquarterwithitsratiototheoutstandingloansof

2.66 percent. The operating performance of commercial

banks in 2009 remained sound as the net profit was

reported at THB 82.9 billion which was a slight increase

fromthepreviousyear.Despitethedeclineinnet interest

income,commercialbankswereabletoraisetheirincome

through the non-interest income such as fee based and

serviceincome.

The stock market condition in 2009 improved

fromthepastyear.Thestockindexattheendofthefourth

quarter stood at 734.5 points, reflecting investors’

expectationontheeconomicrecoveryaheadoftheactual

conditionsandtheattractivenessoftheAsianassetsover

other regions. On the other hand, private financing

throughthecorporatebondmarketwasrecordedaround

THB 1 trillion, a decline from THB 1.3 trillion in 2008,

most of which was the financing through debentures

which were concentrated in finance and manufacturing

sectors. This significant amount of financing implied that

some of the businesses were still in demand of funding

andcouldutilizethelow-interesttohelpcontaintheircost

of funds, particularly when other channels where not as

accommodative. Nevertheless, yields on bonds adjusted

upward for all tenors especially in the medium-term and

long-term maturity due to the expectation of policy rate

hikeinthenearfutureaswellastheconstantissuanceof

the Bank of Thailand and government bonds in the

primarymarket.

As the economic expansion improves in 2010,

the credit extended to private sector is also expected to

expand.At the same time,with theneed forgovernment

financing for the investment projects in the second

stimulus package (SP2), excess liquidity in the financial

systemisexpectedtodecline.Togetherwiththemounting

inflationarypressure,thepolicyrateislikelytoberaisedin

the near future. Nevertheless, the rise in inflation rate is

estimated to exceed the percentage hike in policy rates,

leavingtherealinterestrateatarelativelylowlevelwhich

will still be at supporting level for the recovery in the

privateinvestmentgoingforward.

In 2010, the global economy was expected to

expand, though at a slow pace. The Thai economy

therefore was forecasted to also pick up moderately at

3.5-4.5percent.Thiseconomicrecoverywasexpectedto

be driven by public investment and the global recovery

which led to an increase in private consumption and

investment.Nonetheless,challengesandlimitationsfacing

theThaieconomycanbelistedasfollows;

• The world recovery remained vulnerable as

thepacewillbeunbalancedanddependon

the stronger recovery in Asia. However, the

risk remained as China started to become

more cautious in their stimulus measures

as well as its commercial bank’s lending.

At the same time, unemployment problem

in the US seemed to persist and could lead

theeconomytowardsthe“HumanRecession”

period.Moreover,thetensionontheeffortfor

a collaboration between the US and China

could rise as the US would be pressured

from domestic businesses towards a more

protectionism policy and called for China to

lower its saving and raise consumption to

rebalancetheglobalgrowth.



• The Asian currency would experience the

appreciation against the USD as well as the

Renminbi due to its strong tie to the USD.

TheBahtthereforewasexpectedtocontinue

itsappreciationafter ithasappreciated from

THB 35.36 per USD in the first quarter to

THB33.31perUSDinthelastquarterof2009.

• TheoilpricewasexpectedtoreachUSD75-85

per barrel which would raise the inflationary

pressure and pass on to the cost of

productionaswellasthecostof livinginthe

country. Inflation in 2010 was expected to

increase to 2.5-3.5 percent whereas the

policyinterestrateislikelytoberaisedinthe

latterhalfoftheyear.

• The political uncertainty and issues

surroundingtheinvestmentclimateofThailand

such as the resolution of the legal issue on

projects in the Map Ta Phut Industrial area

maycauseaslowdownintherecoveryofthe

privateinvestmentgoingforward.

Althoughtheshort-termcrisishasnotcompletely

passed, long-term challenges seemed to lie ahead.

The strategic preparation for both public and private

sector would be essential as the economy started

itsreturntonormalization.Onlyatthistime,theeconomic

changes taking place both before and as a result of the

crisishasproduced the“NewNormal” to replace theold

norms we were returning to. These new conditions

surrounding our economy were, for example, the global

warming, food and energy crisis, conflicts of resource

allocation, changes in financial regulations, different

globalgrowthpolarandtheagingsociety.

As a result, 2010 was the year for us to be

cautious on short-term economic challenges despite the

fact that the recovery was underway. Concurrently, the

long-term institutional strategies would need a close

reviewinorder topreparefor theadjustment towardsthe

newenvironmentwhichwill justifyour survival aswell as

successintheworldafterthecrisis.

Christian Children’s FundSupported the training of the Welfare Fund for children and their families at Bahn Nong Ma, Amphur Samrong Thab, in the province of Surin. The training was aimed to help the villagers adapt the fund management scheme to set up the fund for children and their family and promote sustainable growth to their community.



MANAGEMENT DISCUSSION AND ANALYSIS

OF FINANCIAL POSITION AND PERFORMANCE

(CONSOLIDATED BALANCE SHEET) InJuly2007,TBANKhadrestructuredshareholdingofthecompanieswithinThanachartGroup,resultingintheSynergies as well as the effectiveness and efficiency inbusiness operation which reflected in both consolidatedand thebankonly financialstatements for theyear2009.In 2009, total assets in consolidated balance sheetsincreasedby14.45percent.Net incomeof theBankandits subsidiaries amounted to THB 4,056 million whichincreased by 116.95 percent from 2008 while theeconomydeclinedby2.3percent.Thenetincomeof2009wasdrivenbythefollowingmainfactors:

• Loangrowthgrew3.39percent,includingthedecrease of the interest rate as well as the appropriatemanagementofdepositsstructureresultedintheincreasein loan spread to 4.69 percent, an increase from 3.72percentin2008. • Aneffectiveimprovementindebtmanagementandcollectionprocessledtheexpensesonbaddebtanddoubtful accounts to decrease by THB 861 million or21.69percent. • TheBankanditssubsidiariesrapidlygeneratednon-interest income and adjusted the management ofoperatingexpenses.Asa result, thecost to income rationet insurance premium income decreased to 56.51percentfrom59.88percentinthepreviousyear.

MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL POSITION AND PERFORMANCE

Interestanddividendincome 21,470 20,688 782 3.78

Interestexpenses 6,736 9,398 (2,662) (28.32)

Net interest and dividend income 14,734 11,290 3,444 30.51

Baddebtanddoubtfulaccountsandloss(gains)

fromdebtrestructuring 3,107 3,968 (861) (21.69)

Net interest and dividend income less bad debt 11,627 7,322 4,305 58.80

Non-interestincome 18,403 10,615 7,788 73.36

Non-interestexpenses 24,177 15,450 8,727 56.48

Income before income tax 5,853 2,487 3,366 135.34

Corporateincometax(includingrefunds) 1,769 586 1,183 201.60

Minorityinterest 28 31 (3) (9.87)

Net income for the year 4,056 1,870 2,186 116.95

Earningspershare(Baht) 2.19 1.08

Weightedaveragenumber

ofordinaryshares(shares) 1,853,523,390 1,734,619,292

INCOME STATEMENT 2009 2008 INCREASE/ (DECREASE)

CHANGE FROM 2008

(Unit:MillionBaht)OVERVIEW OF OPERATING RESULTS

PERCENT



Net income of TBANK and its subsidiaries in2009amountedtoTHB4,056million,an increaseofTHB2,186 million or 116.95 percent from the previous year.ThiswasduetothecontinuedexpansionofbusinessesofThanachart Group, an increase in loan spread from 3.72percent to 4.69 percent, a rise in non-interest income to73.36percentwhichwasduetothecontinuousgrowthofcommercial bank business, securities business, fundmanagement business, as well as life and non-lifeinsurancebusiness, as well as the efficientmanagementintheBank’sexpenditure.Asaresult,costtoincomerationet insurancepremiumincomedeclinedto56.51percentfrom59.88percentinthepreviousyear.Atthesametime,expenses on bad debt and doubtful accounts alsodecreasedby21.69percent.Thedetailsonkeychangeswereasfollows:INTERESTANDDIVIDENDINCOME In2009, interestanddividend incomeofTBANKand its subsidiariesamounted to THB 21,470 million, anincrease of THB 782 million or 3.78 percent from thepreviousyear.Thiswasmainlycontributedbytheincreasein interest income fromhirepurchase loansand financialleaseandinterestanddividendincomefrominvestments.INTERESTEXPENSES Interest expenses were reported at THB 6,736million,adecreaseofTHB2,662millionor28.32percentfrom the previous year due to the continued decline ofmarket interest rateandeffectivemanagement incost offund. In 2009, TBANK and its subsidiaries’ cost of funddroppedfrom3.21percentin2008to2.01percent.

Asset

Cash 3,665 4,018 (353) (8.78)

Interbankandmoneymarketitems(withinterest) 60,706 61,332 (626) (1.02)

Investments-net 78,602 30,712 47,890 155.94

Loansandaccruedinterestreceivables-net 277,396 269,343 8,053 2.99

Propertyforeclosed-net 912 1,600 (688) (43.01)

Land,premisesandequipment-net 2,211 2,311 (100) (4.29)

Otherassets 9,477 8,986 491 5.46

Total assets 432,970 378,301 54,669 14.45

FINANCIAL POSITION OF THANACHART BANK AND ITS SUBSIDIARIES

BADDEBTANDDOUBTFULACCOUNTS In 2009, expenses on bad debt and doubtfulaccountsofTBANKanditssubsidiariesamountedtoTHB3,107 million, a decrease of THB 861 million or 21.69percent from the previous year, due to an effectivemanagement and improvement in debt collection andcreditriskmanagement.NON-INTERESTINCOME Non-interestincomeofTBANKanditssubsidiariesamountedtoTHB18,403million,anincreaseofTHB7,788million or 73.36 percent. This was mainly due to thecontinuous growth of commercial bank business,securities business, fund management business, andespecially the lifeandnon-life insurancebusinesswhosethe insurance premium income increased by 97.02percent.NON-INTERESTEXPENSES Non-interest expenses of TBANK and itssubsidiaries were reported at THB 24,177 million, anincrease of THB 8,727 million or 56.48 percent from thepreviousyear.The increasewasmainlyattributedby theinsuranceand life insuranceexpenses that increasedby115.50 percent as a result of the increase in numbertransactionsduring theyear.Thepersonnelexpensesaswell as expenses on premises and equipments alsoincreasedby21.36and15.65percent respectively,mostof which was due to an increase in the number of theBank’sbranchesto256attheendof2009from213attheendofthepreviousyearaswellastheinvestmentintheITsystemandinfrastructure.

BALANCE SHEET 2009 2008 INCREASE/ (DECREASE)

CHANGE FROM 2008

(Unit:MillionBaht)

PERCENT



which expanded THB 47,890 million or 155.94 percent

andtheincreaseinloansandaccruedinterestreceivables

of THB 8,053 million or 2.99 percent as a result of the

continuedexpansionofcorporatelendingandautomobile

hirepurchaseloans.

Asat31December2009, totalassetsofTBANK

and its subsidiaries were reported at the amount of THB

432,970million,anincreaseofTHB54,669millionor14.45

percent from the end of the previous year. Most of the

increasewasattributedbyanincreaseinnetinvestments

Liabilities and shareholders’ equity

Deposits 266,296 270,163 (3,867) (1.43)

Interbankandmoneymarketitems(withinterest) 20,499 6,677 13,822 206.99

Securitiesbusinesspayable 1,036 855 181 21.22

Liabilitiespayableondemand 2,112 1,317 795 60.39

Borrowings 90,200 61,150 29,050 47.51

Accruedinterestpayables 1,020 1,721 (701) (40.75)

Lifepremiumreserve 15,286 7,822 7,464 95.44

Otherliabilities 8,649 7,256 1,393 19.19

Total liabilities 405,098 356,960 48,138 13.49

Equity attributable to the Bank’s shareholders 27,811 21,278 6,533 30.70

Minorityinterest 61 63 (2) (3.52)

Total liabilities and shareholders’ equity 432,970 378,301 54,669 14.45

(Unit:MillionBaht)

Total liabilities of TBANK and its subsidiaries as

of 31 December 2009 were reported at THB 405,098

million,anincreaseofTHB48,138millionor13.49percent

fromtheendof2008.Suchrisewasduetoanincreasein

borrowings, interbank and money market items and life

premium reserve that varied with the number of

transactions.

Theshareholders’equityof theBankand itssubsidiaries

recordedatTHB27,811millionasof31December2009,

anincreaseofTHB6,533millionor30.70percentfromthe

end of 2008. This increase of shareholders’ equity was

mainly due to the operating profit of TBANK and its

subsidiariesand thepaid-upcapitalofTHB2,000million

inMay2009.

BALANCE SHEET 2009 2008 INCREASE/ (DECREASE)

CHANGE FROM 2008 PERCENT

Phra Pradaeng Home for the Disabled People

For Khon Kor Diaw Gun’s members, TV Burapha’s fanclub, Thanachart Bank’s staff and the guests appeared in the Khon Khon Khon show to get together for social welfare activities to support the disables by donating personal items for their everyday use.



In 2009, net income of Thanachart BankamountedtoTHB3,547million,anincreaseofTHB2,243millionor171.97percentfromthepreviousyear.Therisewas contributed by efficient management on non-performingassetsduetotheadjustmentinstrategiesandpolicies indebtcollection. Inaddition, themorecautiouslending policy also resulted in a decrease in expensesregarding bad debt and doubtful accounts of THB 718million.Furthermore,theinterestratespreadwasupfrom3.72 percent in the previous period to 4.69 percent.During the year, moreover, the Bank could alsocontinuously raise non-interest income which expandedby 27.81 percent in accordance with the efficientmanagementoftheBank’sexpenditure.Theresultwasadeclineofcost to income ratio from60.81percent in thepreviousyearto53.81percentwithkeychangeslistedasfollows: 1. Regarding loan expansion, TBANK couldcontinuouslyexpanditslendingbothinhirepurchaseandcorporatelending.EspeciallyinthehirepurchasesectionwhichwasthemainbusinessoftheBank,theoutstandingfigureincreasedfromTHB198,344milliontoTHB206,320million or a 4.02 percent increase from the end of 2008.Moreover, corporate loans increased from THB 35,113million toTHB50,910million, representingan increaseof

Interestanddividendincome 20,934 19,897 1,037 5.21Interestexpenses 6,791 9,428 (2,637) (27.97)Net interest and dividend income 14,143 10,468 3,675 35.10Baddebtanddoubtfulaccountsand loss(gain)fromdebtrestructuring 2,830 3,548 (718) (20.22)Net interest and dividend income after bad debt 11,313 6,921 4,392 63.47Non-interestincome 2,815 2,202 613 27.81Non-interestexpenses 9,125 7,705 1,420 18.44Income before corporate income tax 5,003 1,418 3,585 252.73Corporateincometax(includingrefunds) 1,455 114 1,341 1,177.31Net income for the year 3,547 1,304 2,243 171.97Earningspershare(Baht) 1.91 0.75Weightedaveragenumberof ordinaryshares(shares) 1,853,523,390 1,734,619,292

(Unit:MillionBaht)

MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL POSITION AND PERFORMANCE

(FINANCIAL STATEMENTS OF THE BANK ONLY)

OVERVIEWOFPERFORMANCE SUMMARY OF INCOME STATEMENTS

44.99percent.TheincreaseincorporateloanswasinlinewithloandiversificationpolicyoftheBank. 2. The expansion of deposit base under thedeclining market interest rate environment, effectivemanagement on deposit structure, the issuance of newproducts as alternatives for customers to gain highermarket share were the major factors lowering TBANK’scostoffundsto2.01percentcomparedto3.21percentoflastyear. 3.TBANKrapidlygeneratednon-interest incomeand adjusted the management of operating expenses in2009, by launching new products, and improvinginfrastructuresandothersystemstosupportthebusinessexpansion.Asaresult,theBankwasabletoachievenon-interest incomeratioof16.60percentandcosttoincomeratio of 53.81percent compared to the average valueofthepeersat56.38percent.INTERESTANDDIVIDENDINCOME In 2009, TBANK’s interest and dividend incomestoodatTHB20,934million,anincreaseof1,037millionor5.21 percent compared to the past year. Most of theincrease could be explained by an increase in interestincomeforhirepurchasefollowedbytheexpansionofloansaswellasinterestanddividendincomefrominvestments.

INCOME STATEMENTS 2009 2008 INCREASE/ (DECREASE)




INTERESTEXPENSES Interest expenses stood at THB 6,791 million,adecreaseofTHB2,637millionor27.97percentrelativeto the previous year due to the decline in cost of fundsthatwasconsistentwiththetrendofmarketinterestrates. BADDEBTANDDOUBTFULACCOUNTS TBANK’s expenses on bad debt and doubtfulaccounts for 2009 registered at THB 2,830 million,a decrease of THB 718 million or 20.22 percent fromthe past year. Such result was due to the adjustment inwork process that allows higher efficiency in debt

management and collection regardless of the economicdownturn.NON-INTERESTINCOME In2009,TBANK’snoninterest incomeamountedto THB 2,815 million, an increase of THB 613 millionor 27.81 percent relative to the past year. The majorportion of the increase was an increase in fees andservice income and a decline in losses incurred frominvestments due to economic conditions. Moreover, theBank’sincomealsorosefromthesaleofpropertyforeclosedandotherassetsaswellasanincreaseofotherincome.

1.Loans 3,950 4,228 (278) (6.57)

2.Interbankandmoneymarketitems 1,022 1,512 (490) (32.37)

3.Hirepurchaseandfinancialleases 14,354 13,063 1,291 9.89

4.Investments 1,607 1,094 513 46.91

Total interest and dividend income 20,934 19,897 1,037 5.21

1. Gain(loss)oninvestments (57) (206) 149 72.45

2. Feesandserviceincome

• Acceptances,aval,andguarantees 41 35 6 17.41

• Discountedincomeoninsurancepremium 580 709 (129) (18.28)

• Others 1,198 920 278 30.23

3. Gainonexchangesandfinanical

derivativescontracts 148 223 (75) (33.61)

4. Gain(loss)onpropertyforeclosed 127 (84) 211 252.14

5. Incomeonsupportingservice 232 291 (59) (20.25)

6. Otherincome 545 314 231 73.92

Total non-interest income 2,815 2,202 613 27.81

NON-INTERESTEXPENSES

In2009,non-interestexpensesofTBANKtotaled

toTHB9,125million,ariseofTHB1,420millionor18.44

percentcomparedtothepreviousyear.Theincreasewas

mainly due to a rise in personnel expenses of THB 683

million as well as premises and equipment expenses of

THB259millionduetoexpansioninnumberoftheBank’s

branches,investmentsintheinformationtechnologysystem

and infrastructure. Moreover, the expenses on funds

contributed to theFinancial InstitutionDevelopmentFund

(FIDF) and Deposit Protection Agency (DPA) also

increasedbyTHB250million.

(Unit:MillionBaht)

INTEREST AND DIVIDEND INCOME 2009 2008 INCREASE/ (DECREASE)


(Unit:MillionBaht)

NON-INTEREST INCOME 2009 2008 INCREASE/ (DECREASE)




FINANCIAL POSITION

AssetsCash 3,665 4,017 (352) (8.78)Interbankandmoneymarketitems(withinterest) 60,120 59,418 702 1.18Investments-net 64,643 26,586 38,057 143.14Loansandaccruedinterestreceivables-net 275,108 266,843 8,265 3.10Propertyforeclosed-net 895 1,541 (646) (41.92)Land,premisesandequipment-net 1,950 2,015 (65) (3.20)Otherassets 7,497 7,794 (297) (3.81)

Total assets 413,878 368,215 45,663 12.40

ASSETS TotalassetsofTBANKasof31December2009amounted toTHB413,878million,an increase fromend-2008 of THB 45,663 million or 12.40 percent, whichstemmed from an increase of net investments of THB38,057millionandan increase innet loansandaccruedinterestreceivableofTHB8,265million. TBANK’s investments registered at THB 64,643million,ariseofTHB38,057millionor143.14percentfromsurgeindepositsandshort-termborrowingswhichimplieshigher liquidity for TBANK. With such liquidity in hand,the increased investmentsprovided theBankwithhigherrate of returns from both short-term and long-terminvestments. Net loans and accrued interest receivables ofTBANKamounted toTHB275,108million,an increaseofTHB 8,265 million or 3.10 percent from last year. Theincreasewasmostlydue toanexpansionofTHB15,797million in corporate lending and THB 7,976 million ofautomobile hire purchase while the intercompany loans

within Thanachart Group declined by THB 9,730 millionfromtheusualloanrepayments.ASSETQUALITY 1. Loans, receivables and accrued interest receivables Asof31December2009,TBANK’snetloansand accrued interest receivables amounted to THB275,108million,an increaseofTHB8,265millionor3.10percent from theendof lastyear.During2009, theBankentered intovariousdebt restructuringagreements in theformofreconditioningof thedebtrepayment, transferringassets and/or equity and/or reconditioning the terms andconditions of repayment. The total debt restructuringagreementsweremadewith10,810debtors,anincreaseof214debtors.Thiswasduetothedebtmanagementprocessof the Bank, which led to the ability of some debtors torestructuretheirdebtsbyhavingtheirdebtburdeninlinewiththeabilitytorepaydebts,andalsoduetotheimprovementprogramoftheBanktoimprovethedebtquality.

(Unit:MillionBaht)

ASSET ITEMS 2009 2008 INCREASE/ (DECREASE)


Totaldebtors 812,480 335,145 707,434 311,981

Debtorsenteringdebtrestructuringduringtheyear

• Outstandingbalancebeforedebtrestructuring 10,810 3,678 214 621

• Outstandingbalanceafterdebtrestructuring 10,810 3,677 214 621

Totaldebtorsenteringdebtrestructuringatyearend 10,600 5,280 381 2,645

Percentageofdebtorsenteringdebtrestructuring

atyearendtototaldebtors 1.30 1.58 0.05 0.85

LOANS AND INTEREST RECEIVABLE ITEMS 31 DECEMBER 2009

LOANS AND INTEREST RECEIVABLES CLASSIFIED BY TYPES OF DEBTORS

AMOUNT (MILLION BAHT)

NUMBER OF DEBTORS (PERSONS)

31 DECEMBER 2008 AMOUNT

(MILLION BAHT) NUMBER OF DEBTORS

(PERSONS)



LOAN CONCENTRATION

At the end of 2009, TBANK’s lending was

concentrated mostly on hire purchase loans, which the

Bank started providing the service since May 2005.

The loanwasaccounted for73.81percentof total loans,

adecreasefrom76.17percentin2008.

Regarding the expansion and concentration of loans not

includingloanstoparentandrelatedcompanies,TBANK’s

lendingwasmorediversifiedtowardsloansinrealestates

andconstruction,manufacturingandcommerceaswellas

infrastructure and service as the share of these loans

increasedto16.97percentfrom15.54percentin2008.

LOANS CLASSIFIED BY BUSINESS TYPE IN 2008 LOANS CLASSIFIED BY BUSINESS TYPE IN 2009

MATURITY OF DEBTORS

Thecategorizationof loansandaccrued interest

receivables in 2009 according to the remaining maturity

indicated thatmostof the loanshadmore thanoneyear

remainingmaturitywhichaccount for87.39of total loans

and accrued interest receivables. Loans with remaining

maturitylessthanoneyearandloansatcallaccountedfor

9.53and3.08percentof total loansandaccruedinterest

receivables respectively with the share of loans for more

thanoneyearmaturity increasedwhiletheshareof loans

atcallslightlydeclinedin2009.

Manufacturingandcommerce,4.92%

LOANS CLASSIFIED BY REMAINING MATURITIES

0 10 20 30 40 50 60 70 80 90 100 (Percent)

(Year)

2008

2009

At call Less than one Yr More than one Yr

6.33

8.10

85.5

7

3.08

9.53

87.3

9 Realestateandconstruction,5.61%

Infrastructureandservice,5.00%Others,5.46%

Housing,2.84%

Hirepurchase,76.17%

Others,6.74%


Realestateandconstruction,5.58%

Infrastructureandservice,5.60%

Housing,2.49%

Hirepurchase,73.81%

Note:Loansclassifiedbybusinesstypeexcludedparentandrelatedcompanies.



2. Loan classification according to the BOT’s notification Asof31December2009,TBANK’sloansandaccrued interest receivables (including loans to financialinstitutions shown in the interbank and money marketitems)classifiedundertheBOT’snotificationregisteredatTHB335,145million,anincreaseofTHB23,164millionor7.42percent fromthepastyear.TheBankhadsetaside

allowancefordoubtfulaccountsasof31December2009of THB 7,504 million and additional allowances fordoubtfulaccountsofTHB214million.Asaresult,thetotalallowance for doubtful accountsamounted to THB 7,718million, a THB 1,353 million increase from the previousyear. This led the ratio of total allowance for doubtfulaccount to loans and accrued interest receivables tostageat2.30percent.

LOANS CLASSIFICATION ACCORDING TO THE BOT’S REGULATION

Normal 308,928 280,590 909 752

Specialmention 17,830 24,186 188 178

substandard 1,336 1,547 968 1,163

doubtful 2,005 1,629 1,181 1,156

doubtfulofloss 5,046 4,029 4,258 3,019

Total 335,145 311,981 7,504 6,268

Additionalallowancefordoubtfulaccounts 214 97

Totalallowancefordoubtfulaccounts 7,718 6,365

Ratiooftotalallowancefordoubtfulaccountstototalloansandinterestreceivables(percent) 2.30 2.04

LOANS AND INTEREST RECEIVABLES(1)

31 DECEMBER 2009 31 DECEMBER 2008

ALLOWANCE FOR DOUBTFUL ACCOUNTS DEBT BALANCE/BOOK VALUE

Note:(1)Theloanamountsofthenormalandspecialmentionaccountsdidnotincludetheaccruedinterestreceivables.

3. Non-performing Loans (NPLs)

Asof31December2009,TBANKfacedwith

anNPLintheamountofTHB8,359million,anincreaseof

THB1,192millionfromtheendofthepastyearduetothe

economicslowdownthatposedanadverseimpactonthe

debt repayment ability of the debtors, especially in the

Bank’s main business, hire purchase. Nonetheless, the

NPL ratio stood at only 2.49 percent and the NPL net

provisiontotaledtoTHB1,952million,resultedintheratio

ofnetNPLtototalloansof0.59percent.Theallowancefor

doubtfulaccountsthisyearrecordedatTHB7,718million

whichaccountedfor92.34percentoftheNPLs.

(Unit:MillionBaht)

Non-PerformingLoans(NPLs) 8,359 7,167

NPLstototalloans(percent) 2.49 2.30

Totalallowancefordoubtfulaccounts 7,718 6,365

TotalallowancefordoubtfulaccountstoNPLs(percent) 92.34 88.80

NPL-netunderthenewBOT’sregulation 1,952 1,830

NPL-net(percent) 0.59 0.60


(Unit:MillionBaht)NON-PERFORMING LOANS




4. Investment in Securities

In 2009, TBANK’s total investments insecuritiestotaledtoTHB59,876million,mostofwhichwasallocated to investments in government and stateenterprise securities, accounted for 71.89 percent of thetotal investments in securities. The second largest sharewas in the available-for-sale foreign debt securities thattheBankhadalreadyenteredintoforwardagreementstocover the foreign exchange risks in advance for both

NPLs CLASSIFIED BY BUSINESS TYPE CLASSIFIED NPLs

INVESTMENT IN SECURITIES CLASSIFIED BY TYPE OF INSTRUMENTS

Debt securities Governmentandstateenterprisesecurities • Tradingsecurities 754 1.26 - - • Available-for-salesecurities 31,062 51.88 2,570 11.50 • Held-to-maturitysecurities 11,228 18.75 10,032 44.89Privatedebtsecurities • Available-for-salesecurities 5,640 9.42 3,134 14.02 • Held-to-maturitysecurities - - - -Foreigndebtsecurities • Available-for-salesecurities 5,740 9.59 - - • Held-to-maturitysecurities 4,449 7.43 4,847 21.69Equity securities Listedsecurities • Available-for-salesecurities 415 0.69 575 2.57Unittrusts • Available-for-salesecurities - - 416 1.86Generalinvestments 468 0.78 655 2.93Other securities 120 0.20 117 0.52Total investment in securities 59,876 100.00 22,346 100.00Add(Less)Allowanceforrevaluation 396 (33) Allowanceforimpairment (111) (209)

Total investments-net 60,161 22,104

INVESTMENT CLASSIFIED BY TYPE 31 DECEMBER 2009 PERCENT 31 DECEMBER 2008 PERCENT

(Unit:MillionBaht)

Service,1.25% Others,14.36%


Realestateandconstruction,12.10%

Housingloans,6.15%

Hirepurchaseloans,55.17% Substandard,15.93%Doubtfulofloss,

60.16%

Doubtful,23.91%

foreigninvestmentsandrelatedinterestswhichaccountedfor 17.02 percent of total investments in securities ofTBANK.Aftertakingintoconsiderationrevaluationsurplus(deficit) and allowance for impairment, net investmentswouldtotaltoTHB60,161millionin2009,anincreasefromTHB22,104million in2008ora172.17percent increase.The details of the 2009 investment in securities were asfollows:



DEPOSITS CLASSIFIED BY REMAINING MATURITIES

0 10 20 30 40 50 60 70 80 90 100 (Percent)

(Year)

2551

2552

Less than one Yr

99.4

8

0.52

83.0

2

16.9

8

Liabilities and shareholders’ equity

Deposits 266,727 270,832 (4,105) (1.52)

Interbankandmoneymarketitems(withinterest) 21,678 7,030 14,648 208.35

Liabilitiespayableondemand 2,112 1,317 795 60.39

Loans 90,936 62,288 28,648 45.99

Accruedinterestpayable 1,029 1,735 (706) (40.68)

Otherliabilities 5,040 3,742 1,298 34.70

Total liabilities 387,523 346,944 40,579 11.70

Equity attributable to the Bank’s shareholders 26,355 21,270 5,085 23.91

Total liabilities and shareholders’ equity 413,878 368,215 45,663 12.40

2009 2008

(Unit:MillionBaht)LIABILITIES AND SHAREHOLDERS’ EQUITY

LIABILITIESANDSHAREHOLDERS’EQUITY As of 31 December 2009, TBANK’s liabilitiestotaledtoTHB387,523million,anincreaseofTHB40,579million or 11.70 percent from the end of 2008, most ofwhich was attributed by a rise in short-term borrowingsand interbank and money market items while depositsdeclined.Thekeyitemsinliabilitiescanbelistedasfollows:

• Deposits totaled to THB 266,727 million,a decline of 1.52 percent or THB 4,105 million from theend of the previous year. Most of the deposits hadremainingmaturityoflessthanoneyear,whichaccountedfor 83.02 percent of the total deposits, declining from99.48percentoflastyear.

INCREASE/ (DECREASE)


More than one Yr

Foundation for Balance Growth of Rural Community-PlarnkhoiDonated books, stationary and sporting equipment to the Foundation’s school in Ubon Ratchathani province that emphasized on teaching and learning in Buddhism, Dhamma and Thai ways based on principle of morals and religion together with education. The support was to mainly provide educational opportunities for the youth in rural area.



• Total interbank and money market itemsregistered at THB 22,165 million, a rise of THB 14,496million or 189.03 percent from last year. Out of thisincrease,THB9,300millionwasfromdomesticitemswhileTHB5,196millionwasfromforeignitems. • Total borrowings registered at THB 90,936million, consisted of short-term borrowings amounted toTHB 75,936 million and long-term borrowings of THB15,000 million. Short-term borrowings increased by THB28,008millionor58.44percent from lastyearwhile long-term borrowings also rose from last year by THB 640million or 4.46 percent. During the second and thirdquartersof2009,TBANKissuedsubordinateddebenturesin the amount of THB 7,000 million to support thecontinued expansion of credit lending into the futureperiodsaswellastoreplacesomefractionsofborrowingsthat matured during the second quarter. The detailed ofissueddebenturescanbestatedasfollows: - Unsecuredandunconvertiblesubordinateddebentures with a bondholder representative for theissuance in the amount of THB 2,000 million witha maturity of 10 years. The interest rate was at 5.25percent for year 1-3, 5.75 percent for year 4-7 and 6.50percentforyear8-10. - Unsecuredandunconvertiblesubordinateddebentures with a bondholder representative for theissuance in theamountof THB5,000million that canbedividedinto: 1. TheissuanceofTHB3,500millionfor10-yearmaturitywith the interestrateof5.25percent foryear1-5and5.5percentfromyear6-10. 2. TheissuanceofTHB1,500millionfor15-yearmaturitywiththeinterestrateof5.25percentforyear1-5,6.0percentfromyear6-10and6.5percentforyear11-15. SHAREHOLDERS’ EQUITY The shareholders’ equity as of 31 December2009was reportedatTHB26,355million,an increaseofTHB5,085millionor23.91percentcompared to theendof 2008. The increase was mainly due to the increase innetincomeandfromanincreaseinthepaid-upcapitalofTHB2,000millionduring2009. In thesecondquarterof2009,TBANKpaidoutdividend fromnet incomeof2008toshareholdersatarateofTHB0.56pershare,totaledtoTHB971million. DEBT TO EQUITY RATIO ThanachartBank’sdebttoequityratiodecreasedfrom16.31in2008to14.70in2009.

OBLIGATIONS TBANK’s total obligation increased from THB87,095 million in 2008 to THB 92,609 million in 2009.Allitemsofobligationsexceptobligationsunderunmaturedimportbillsincreasedfromthatof2008.Moreover,TBANKwas obligated to an estimated share of potential lossesfrom the salesof non-performing loans to the ThaiAssetManagement Company (TAMC) in the amount of aroundTHB 89 million, of which a part was presented asallowance for impairmentof long-term investment indebtsecurities.Moreover,theBankwasobligatedtocompensatelossesfromthesalesofmortgageloanstotheSecondaryMortgage Corporation (SMC). The compensation was forlossesarisingfromthenumberofdefaultmortgageloansup to a maximum of 20 percent of the value of theaforementionedloans,whichasof31December2009didnotexceedTHB2million.LIQUIDITY Attheendof2009,TBANK’scashflowsreceivedfrom financing activities amounted to THB 27,694 millionwhile that of the operating activities was at THB 7,527million.Atthesametime,thecashflowusedininvestmentactivities staged at THB 35,574 million. The Bank’s cashand cash equivalents therefore declined by THB 353million. At end-2009, the Bank’s outstanding cash andcashequivalentregisteredatTHB3,665millionwithmajoritemslistedasfollows: • With regard to cash flows from financingactivities, cash received from borrowings registered atTHB 225,330 million and cash received from issuedadditional share of capital was at THB 2,000 million.At the same time, cashpaid for loan repayment, interestfrom borrowings, and dividend was at THB 196,700million,THB1,964million,andTHB971millionrespectively. • Cashflowsfromtheoperatingactivitiesweredue toan increase in interbankandmoneymarket itemson liabilities recording at THB 14,496 million as well asadecline indepositsof4,104millionBaht.Cashused inlending was at THB 17,109 million, while cash used ininvestment in trading securities and in interbank andmoneymarketitemsonassetswasatTHB754millionandTHB577millionrespectively. • Cash flows from investing activities wereaccountedforbyanincreaseininvestmentinsecuritiesofTHB36,721millionandthepurchaseofequipmentofTHB360million.Atthesametime,cashreceivedfrominterestoninvestmentsanddividendstoodatTHB989millionandTHB514millionrespectively.



Cashflowsfromfinancingactivities 27,694 (12,682)Cashflowsfrominvestingactivities (35,574) (6,496)Cashflowsfromtheoperatingactivities 7,527 19,921Netincrease(decrease)incash (353) 743Cashatbeginningoftheyear 4,017 3,274Cash at end of the year 3,665 4,017

2009 2008

(Unit:MillionBaht)

MAINTENANCEOFCAPITALADEQUACYRATIO

As of 31 December 2009, TBANK’s total capital

registered at THB 38,557 million of which THB 23,645

million was Tier 1 capital and THB 14,925 million was

for Tier 2. The ratio of capital to risk weighted assets

calculatedunderBaselIIstandardswasat14.10percent,

anincreaseof11.18percentfromtheendoftheprevious

year which was still well above the BOT’s minimum

requirement at 8.50 percent. Details of ratio of capital to

riskweightedassetscouldbelistedasfollows:

Sources of fundsDeposits 82,798 23.15 138,638 38.76 45,291 12.66 0 0.00 266,727 74.57Borrowings 0 0.00 75,936 21.23 15,000 4.19 0 0.00 90,936 25.43

Total sources of funds 82,798 23.15 214,574 59.99 60,291 16.86 0 0.00 357,663 100.00

Uses of fundsLoans(1) 13,056 3.76 88,474 25.50 181,047 52.18 0 0.00 282,577 81.45Investments 0 0.00 18,973 5.47 40,386 11.64 4,999 1.44 64,358 18.55

Total uses of funds 13,056 3.76 107,447 30.97 221,433 63.83 4,999 1.44 346,935 100.00

AT CALL LESS THAN 1 YR MORE THAN 1 YR NOT SPECIFIED TOTAL

MILLION PERCENT MILLION PERCENT MILLION PERCENT MILLION PERCENT MILLION PERCENT BAHT BAHT BAHT BAHT BAHT

TYPE

Note:(1)Theoutstandingbalanceofloansanddebtorsatcallalsoincludedloansanddebtorswhoseincomerecognitionwasputonhold.

CAPITAL EXPENDITURE In2009,TBANK’snumberofbranchesincreasedby43tothetotalof256branches,leadingtoexpensesonrent, decoration, information technology system togetherwith operating equipment. During the year, the Bank’sexpensesoncapitalexpenditurewereTHB483million.RELATIONSHIP BETWEEN SOURCES AND USES OFFUNDS In 2009, TBANK’s sources of funds were fromdepositsandborrowingsofTHB266,727millionandTHB90,936 million respectively. For the uses of funds, THB282,577millionwasforloansandTHB64,358millionwasforinvestments. The comparison between sources and uses offundsbasedonmaturityof financial instrumentsdated inbalancesheetasof31December2009illustratedthatthemajor sources of funds were deposits with remainingmaturityof less thanoneyearwhichaccounted for38.76percent of total sources of funds; followed by 23.15

percentofdepositsatcalland21.23percentofborrowingswithremainingmaturityoflessthanoneyear.Ontheotherhand,usesoffundswasmostlyconcentratedinloanswithremaining maturity of more than one year accounted for52.18 percent of total uses of funds and loans withremaining maturity of less than one year accounted for25.50 percent. However, the maturity mismatch betweensources and uses of funds was considered normal incommercial bank and financial institution business. Thiswasduetothebehaviorofmostdepositorstoextendtheirdeposits after the maturity. Furthermore, the Bank hadconductedriskmanagementpoliciesthataimedatseekingforsourcesof funds thatweremostcompatiblewith theiruses throughvarious financial instruments. This thereforeenabled the Bank to recognize in advance the signal ofanyadverseimpactsthatwouldoccurtothesourcesanduses of funds. Details of key sources and uses of fundsclassifiedbymaturitydateofeachitemsincethebalancesheetdateasof31December2009wereasfollows:

MAJOR CHANGES ITEMS



THANACHART SECURITIES PUBLIC COMPANY

LIMITED

As of 31 December 2009, net income ofThanachartSecuritiesPublicCompanyLimited“TNS”wasreportedat THB273.56million, increased from the sameperiodofthepreviousyearbyTHB176.64millionor182.26percent. Most of the increase resulted from income frombrokeragefeeonsellingsecuritiesandderivativesthatrosebyTHB151millionor19.18percent,whichwasinlinewiththestockmarketconditionandthehighermarketshareofTNS.Furthermore,TNS’s increase innet incomewasalsoduetorisingprofitinsecuritiestradingofTHB84.70millionaswellassalesandreversaloflossesfromtheimpairmentof investment in securities which was realized in thepreviousperiod.On theotherhand, the feeexpensesonsecuritybusinessandpersonnelexpensesalso increasedwith the volume of transactions while other operatingexpensesdeclinedduetothepolicytocontrolexpenditureofTNS. TNS’s ratio of net liquid capital was at 148.09percent which well exceed the 7 percent minimumrequirementoftheSEC.THANACHART FUND MANAGEMENT COMPANY

LIMITED

Net income of Thanachart Fund ManagementCompany Limited “TFUND” as of 31 December 2009totaled at THB 111.16 million, decreased from thesameperiodof last yearbyTHB12.16millionor9.86percent. This was a result of the recording of incomefrom reacquired bad debt in 2008 at the amount ofTHB1.44millionofwhichthetax incentivesfromsuchitemcouldbedeductedfromtheTFUNDtaxpayment.However,TFUND’staxpaymentin2009wasinfull.

Net income before corporate income tax of TFUNDas of 31 December of 2009 registered at THB 161.84million,anincreaseofTHB1.10millionor0.69percentfrom the previous year. This was due to an increasein feebasedandservice income in2009 that rosebyTHB2.07millionor0.48percentfromlastyearaswellas a decline in total expenses of THB 6.36 millionor2.24percent.

THANACHART LIFE ASSURANCE COMPANY

LIMITED

Insurance premium income of Thanachart LifeAssuranceCompanyLimited “TLIFE”asof31December2009 increased from the previous year. However, TLIFEhadtosetasideinsurancereserveincompliancewiththeOffice of Insurance Commission (OIC) standards whichresulted in the net operating income of this year of THB120.38 million, a 229.92 million reduction from the sameperiodoflastyear.Thecapitalratiowasat402.06percentwhich was higher than the minimum requirement of theOICat150percent.THANACHART INSURANCE COMPANY LIMITED

Insurance premium income of ThanachartInsurance Company Limited “TNI” as of 31 December2009 declined from the previous year due to theadjustment in TNI’s marketing strategies. Nevertheless,the efficient management of insurance compensationresulted in TNI’s net operating income of THB 225.00million, an increase of THB 162.23 million or 258.45percent from the previous year. The capital ratio wasat 308.00, higher than the minimum requirement of the

OICat150percent.

Tier1capital 23,645 8.65 20,261 8.02

Totalcapital 38,557 14.10 28,247 11.18

MILLION BAHT PERCENT MILLION BAHT PERCENT


CAPITAL ADEQUACY RATIO

Foundation for Slum Child Care

Set up donation boxes at all the Bank’s branches to raise funds in support of the Foundation as well as encourage donations from customers, executives and Thanachart Group’s employees to support the child’s living conditions, education and quality of live.



NATURE OF BUSINESS OPERATIONS

OVERVIEW OF THE BUSINESS OPERATIONS

Thanachart Bank Public Company Limited“TBANK” is the company of Thanachart FinancialConglomerate with Thanachart Capital Public CompanyLimited “TCAP” as a parent company. The companiesunder Thanachart Financial Conglomerate are classifiedby their types of business into two groups: (1) financialbusinessgroupand (2)supporting businessgroup.TheConglomerate could be considered a fully integratedfinancial business group whose businesses andoperations are clearly separated. As regards thedistribution channels, member companies of the Groupmake use of the branch network and service outlets ofTBANKas channels for offering their respective financialservices. The arrangements are in compliance with thepromotion guidelines given by the regulators concerned.The details of the business operations of each companyareasfollows:(A) THE MEMBER COMPANIES THAT OPERATEFINANCIALBUSINESSES 1. Thanachart Capital Public Company Limited“TCAP” operates as the holding company and thus isaparentcompanyofThanachartFinancialConglomerate. 2. Thanachart Bank Public Company Limited“TBANK” operates commercial banking business andother businesses permitted by the BOT, such as sellinglifeandnon-lifeinsuranceproducts,andunderwritingandrepurchasingofunittrusts. 3. Thanachart Securities Public CompanyLimited“TNS”wasgrantedaFullLicensefromtheMinistryof Finance to operate full range of securitiesbusinessesincluding securities brokerage, proprietary trading,securities underwriting, investment advisory service,mutual fund management, private fund management,securities borrowing and lending, venture capitalmanagement and derivatives business Sor 1. As well,TNS isengaged inother relatedbusinesses that supportthe securities business. These include, among others,financial advisory services, futures businesses, unit

trust underwriting and repurchasing services as well assecuritiesregistrar. 4. Thanachart Fund Management CompanyLimited“TFUND”whichisajointventurebetweenTBANK(holding 75 percent of the total shares) and TheGovernmentSavingsBank (holding25percent)operatesmutualfund,privatefundandprovidentfundmanagementbusinesses. In addition, TFUND operates investmentadvisorybusiness.Asaresult,itisconsideredacompanywithafullrangeofadvisoryservices. 5. Thanachart Insurance Company Limited“TNI” gives non-life insurance services including fireinsurance,automobileinsurance,marineandtransportationinsurance,andmiscellaneousinsurance. 6. ThanachartLifeAssuranceCompanyLimited“TLIFE”giveslifeinsuranceandhealthinsuranceservices.Based on the characteristics of customers, its servicescanbedividedintotwomaintypesincludingordinarylifeinsuranceandgrouplifeinsurance. 7. ThanachartGroupLeasingCompanyLimited“TGL”givesautomobilehirepurchaseloans. 8. NFS Asset Management Company Limited“NFS AMC” was granted a license to operate assetmanagement business. It buys or takes transfers ofnon-performing loans from financial institutions ofThanachartGroup. 9. MAX Asset Management Company Limited“MAX AMC” was granted a license to operate assetmanagement business. It buys or takes transfers ofnon-performingloansfromfinancialinstitutions. 10.TLeasingCompanyLimited“TLEASING”wasgranted a license to operate motorcycle hire purchasebusiness.(B) THE MEMBER COMPANIES THAT OPERATESUPPORTINGBUSINESSES: 1. Thanachart Legal and Appraisal CompanyLimited “TLA” gives legal services related to contracts,legal advice, bringing cases to court of law, legalenforcement,andappraisalofcollateral.



2. Thanachart Management and ServicesCompanyLimited“TMS”givesstaffingsupportservicesintheformofservicestaff. 3. Thanachart Training and DevelopmentCompany Limited “TTD” organizes training activities foremployeesofmembercompaniesofThanachartGroup. 4. Thanachart Broker Company Limited“TBROKE” pursues Thanachart Group hire purchasecustomers to insure automobiles with all insurancecompanies. It is also an automobile insurance brokerofTNI.

SECURITIES BUSINESS

INSURANCE BUSINESS

LEASING BUSINESS

Thanachart Securities Public Company Limited

Thanachart Fund Management Company Limited

Thanachart Insurance Company Limited

Thanachart Life Assurance Company Limited

T Leasing Company Limited

Thanachart Group Leasing Company Limited

THANACHART CAPITAL

PUBLIC COMPANY LIMITED

Non-Financial Business Group

COMMERCIAL BANKING BUSINESS ASSET MANAGEMENT BUSINESS

NFS Asset Management Company Limited

Financial Business Supporting Business

Max Asset Management Company Limited

Thanachart SPV 01 Company Limited

Thanachart Bank Public Company Limited

Financial Business GroupThe Bank of Nova Scotia

Thanachart Broker Company Limited

Thanachart Management and Services Company Limited

Thanachart Legal and Appraisal Company Limited

National Leasing Company Limited

100%

75%

100%

100%

100%

100% 100%

100%

100%

100%

100%

100%

83.44%50.92%

48.99%

100%

POLICY ON DIVISION OF OPERATIONAL FUNCTIONS

AMONG MEMBER COMPANIES OF THANACHART GROUP

BeingaparentcompanyofThanachart FinancialConglomeratewithacontrolling interest (i.e. owningmorethan50percentof issuedandpaid-upcapital),TCAPhasadoptedthefollowingpoliciesandapproachesinmanagingthemembercompaniesoftheGroup.

BUSINESSPOLICIES TCAPandTBANKareresponsibleforestablishingkey business policies of Thanachart Group annually.Eachsubsidiaryisrequiredtoformulatebusinessplansand

Thanachart Training and Development Company Limited

Note:Theaboveshareholdingsincludesharesheldbytherelatedparties.

SHAREHOLDING STRUCTURE OF THANACHART GROUP AS AT 31 DECEMBER 2009



budgets for 3-5 years and submit them to the parentcompanyforconsideration,inordertoensurethattheyarein alignment with the established key business policies.The business plans and budgets are also subject toevaluationand review regularly.Theobjective is toensurethattheyareinlinewiththechangingbusinessconditions.

SUPERVISIONOFSUBSIDIARIES Thedirectorsandhigh-rankingexecutivesofTCAPandTBANKwillbeassignedtositontheBoardofDirectorsofthesubsidiaries.ThearrangementnotonlyenablesTCAPandTBANK toassist the subsidiaries inestablishing theirpoliciesand indetermining their futuredirection,but alsoensures theclosesupervisionof thesubsidiaries’businessoperations. Importantly, thechief executiveofficersof thesubsidiariesarerequiredtopresentamonthlyperformancereport to the Executive Committees and the Boards ofDirectorsofTBANKandTCAP.

CENTRALIZEDSUPPORTSERVICES It isthepolicyofThanachartGrouptoputeachofthesupportservicestogetherinonecompanywhichwillberesponsible for providing services to all other membercompanies of the Group. The purpose is to maximizebenefitswithin theexisting resources includingexpertiseofoperationsstaffandvariousinformationtechnologysystems,and to reduce staffing costs. The centralized supportservices available now within Thanachart Group includeinformation technology,personnel, systemsand regulatorydevelopment, internalaudit,operationscontrol,operations,business control, electronic services, administration andprocurement, legalandappraisalservices,aswellas retaildebtcollectionsandcollectionsbrokerage.

INTERNAL CONTROL, AUDIT, AND CORPORATEGOVERNANCEOFPARENTCOMPANYANDSUBSIDIARIES Thanachart Group places strong emphasis oninternal control. The Group adheres to the principle ofadequateandappropriateinternalcontrolbyestablishingprocedures for the conduct of business, provision ofservices, and operations. The Group also separates thedutiesandresponsibilitiesofeachunitfromthoseofothers,basedona systemofchecksandbalances. Inaddition,it puts in writing the announcements as well as ordermandates, rules and regulations covering key businessareasandoperations,andtheseinformationisalsodisclosedtoallstaff insuchawaythattheycanalwaysstudytheminordertogainafullunderstanding.AcentralunitatTBANKis responsible for preparing and proposing for theannouncements,ordermandates,rulesandregulationsofallmembercompaniesoftheGroup.

As regards the internal audit, the internal auditgroup is responsible forauditing thebusinessoperationsofallmembercompaniesoftheGroup,ensuringthattheycomply with the regulations and the established worksystems. The internal audit group also assesses errorsand defects in operations in order to propose correctivemeasuresforimprovement.Inaddition,ThanachartGrouphasestablishedaComplianceUnitresponsibleforcloselymonitoring and studying laws, notifications, and ordersrelatedtotheGroup’sbusinessaffairsandoperationsanddisseminatingtheinformationtothestaff.TheComplianceUnit is also responsible for ensuring that the conduct ofbusinessaffairsofthemembercompaniesoftheGroupisincompliancewiththelegalrequirements. Moreover, theAuditCommitteeofeachmembercompany of the Group is responsible for governing,controlling,andauditingtheirrespectivebusinessoperations.TheAuditCommitteeisalsoallowedtocarryoutitsdutiesand give its opinions in a manner independent of themanagementofeachcompany.Thepurposeistoensurethat internal control and audit systems are effective andthatthefinancialstatementsareproperlyreviewed. Asregardsthecorporategovernance,theBoardsofDirectorsoftheTCAPandthecompaniesintheGroupplacestrongemphasisonthegoodcorporategovernancebothattheleveloftheBoardofDirectorsandthelevelofvariousCommittees.Independentdirectorsareappointedtothe Board of Directors and the Committees to provideeffectivechecksandbalancesonthepowersofexecutivedirectors.Theestablishedscopeof responsibilitiesof theBoardofDirectorsandtheCommitteesisalsoinlinewiththeprinciplesofgoodcorporategovernancepromotedbytheauthoritiesconcerned.Inaddition,theBoardsofDirectorsof the TCAP and the subsidiaries have established thecorporate governance policy and the code of conductwhich the directors, executives and staff of the membercompaniesofThanachartGrouparerequiredtoadhereto.Focusisgiventointegrity,transparencyandavoidanceofanyconflictofinterest.

RISKMANAGEMENT TCAPensuresthatthemembercompaniesoftheGroupanalyzeandassessvarious risksof theirbusinessoperationsandthattherisksareproperlymanagedinlinewith the guidelines given by the authorities concerned.Inaddition,TCAPconductsanalysisofthekeyrisksfacedbythemembercompaniesoftheGroupwhichmayneeddirectfinancial or management support from TCAP. TheestablishedriskmanagementpolicyofThanachartFinancialConglomerateisinlinewiththeguidelinesgivenbytheBOT.



INCOME STRUCTURE OF THANACHART BANK AND ITS SUBSIDARIES

TheincomestructureofTBANKanditssubsidiariesbasedontheconsolidatedfinancialstatementsasof31December2009,2008and2007wasasfollows:

Note:TheBankdisclosestheinvestmentpolicyunderthetopicofassetsusedinbusinessoperation.

INTEREST AND DIVIDEND INCOME ThanachartBankPlc. 20,282 61.21 19,407 88.60 17,051 120.05 ThanachartSecuritiesPlc. 100.00 104 0.31 147 0.67 42 0.30 ThanachartFundManagementCo.,Ltd. 75.00 2 - 7 0.03 3 0.02 ThanachartInsuranceCo.,Ltd. 100.00 68 0.21 87 0.40 29 0.20 ThanachartLifeAssuranceCo.,Ltd. 100.00 384 1.16 317 1.44 84 0.59 ThanachartGroupLeasingCo.,Ltd. 100.00 356 1.07 466 2.13 238 1.68 ThanachartBrokerCo.,Ltd. 100.00 - - 1 0.01 1 0.01 ThanachartManagementandServicesCo.,Ltd. 100.00 - - - - - - ThanachartLegalandAppraisalCo.,Ltd. 100.00 - - - - - - ThanachartTrainingandDevelopmentCo.,Ltd. 100.00 - - - - - - TLeasingCo.,Ltd. 100.00 271 0.82 253 1.15 20 0.14 NationalLeasingCo.,Ltd. 100.00 3 0.01 3 0.01 20 0.14TOTAL INTEREST AND DIVIDEND INCOME 21,470 64.79 20,688 94.44 17,488 123.13 INTEREST EXPENSE ThanachartBankPlc. 6,734 20.33 9,376 42.80 9,364 65.93 ThanachartSecuritiesPlc. 100.00 1 - 3 0.01 1 0.01 ThanachartFundManagementCo.,Ltd. 75.00 - - - - - - ThanachartInsuranceCo.,Ltd. 100.00 - - - - - - ThanachartLifeAssuranceCo.,Ltd. 100.00 - - - - - - ThanachartGroupLeasingCo.,Ltd. 100.00 - - 9 0.04 23 0.16 ThanachartBrokerCo.,Ltd. 100.00 - - - - - - ThanachartManagementandServicesCo.,Ltd. 100.00 - - - - - - ThanachartLegalandAppraisalCo.,Ltd. 100.00 - - 1 0.01 - - ThanachartTrainingandDevelopmentCo.,Ltd. 100.00 - - - - - - TLeasingCo.,Ltd. 100.00 - - - - - - NationalLeasingCo.,Ltd. 100.00 1 - 9 0.04 8 0.06TOTAL INTEREST EXPENSE 6,736 20.33 9,398 42.90 9,396 66.16 NET INTEREST AND DIVIDEND INCOME 14,734 44.46 11,290 51.54 8,092 56.97 NON-INTEREST INCOME ThanachartBankPlc. 2,393 7.22 1,929 8.81 1,914 13.48 ThanachartSecuritiesPlc. 100.00 1,027 3.10 793 3.62 479 3.37 ThanachartFundManagementCo.,Ltd. 75.00 437 1.32 436 1.99 215 1.51 ThanachartInsuranceCo.,Ltd. 100.00 2,672 8.07 2,504 11.43 1,088 7.66 ThanachartLifeAssuranceCo.,Ltd. 100.00 11,637 35.12 4,682 21.37 2,282 16.07 ThanachartGroupLeasingCo.,Ltd. 100.00 96 0.29 65 0.30 46 0.32 ThanachartBrokerCo.,Ltd. 100.00 57 0.17 94 0.43 45 0.32 ThanachartManagementandServicesCo.,Ltd. 100.00 1 - 1 0.01 1 0.01 ThanachartLegalandAppraisalCo.,Ltd. 100.00 43 0.13 52 0.24 29 0.20 ThanachartTrainingandDevelopmentCo.,Ltd. 100.00 - - - - - - TLeasingCo.,Ltd. 100.00 37 0.11 49 0.22 5 0.04 NationalLeasingCo.,Ltd. 100.00 3 0.01 10 0.04 7 0.05TOTAL NON-INTEREST INCOME 18,403 55.54 10,615 48.46 6,111 43.03 TOTAL INTEREST AND DIVIDEND INCOME AND NON-INTEREST INCOME 33,137 100.00 21,905 100.00 14,203 100.00

PERCENTAGE SHAREHOLDING OF

TBANK (WITH RELATED PARTIES)

MILLION BAHT

PERCENT MILLION BAHT


PERCENT 2009 2008 2007

CONSOLIDATED FINANCIAL STATEMENTS



IncomestructureofTBANKbasedonseparatedfinancialstatementsfortheyearended31December2009,2008and

2007wasasfollows:

Interestanddividendincome 20,934 123.45 19,897 157.04 17,123 175.77

Interestexpenses 6,791 40.05 9,429 74.42 9,386 96.35

Netinterestanddividendincome 14,143 83.40 10,468 82.62 7,737 79.42

Non-interestincome 2,815 16.60 2,202 17.38 2,005 20.58

Total interest and dividend income and non-interest income 16,958 100.00 12,670 100.00 9,742 100.00

NATURE OF BUSINESS OPERATION OF EACH

BUSINESS GROUP

BUSINESSPOLICYANDSTRATEGIESOFTHANACHART

GROUP

In 2009, Thanachart Group determined its

strategicdirection inbecomingafully integratedfinancial

servicesgroupthatiscapableofofferingqualityproducts

and services that cater to the financial needs of the

targeted groups of customers in an efficient manner.

Tomoveintherightstrategicdirection,ThanachartGroup

has come up with a vision based on the fully integrated

financialservicesgroupby “Being a business group that

offers fully integrated financial services with focus on

creation of service excellence and development of various

products that cater to all the financial needs of its target

groups of customers, with the cooperation and solidarity

of all the members of the group.”

Suchvisionisbasedonthreemajorfundamentals.

Thefirstfundamentalisthebusinessgroupwhichhasfully

integrated financial services (Universal Banking) with

ThanachartBankbeing themainchannel for offering the

services. The second one is the ability to cater to

customers’needs(CustomerCentric)whilethethirdoneis

thecooperationreceivedfromalltheworkunitsaswellas

theunityamongthem(Synergy).

Moreover, the efforts based on the three major

fundamentals will not only help Thanachart Group to

become a successful financial institution with fully

integratedfinancialservices,butwillalsobethekeydrivers

in making the Group become one of Thailand’s leading

banksoverthenextthreetofiveyears.

In addition to the goal of becoming a fully

integratedfinancialservicesgroup,ThanachartGrouphas

set itselfagoalofbecominga leadingmid-sizedbank in

thecountry’scommercialbanking industry throughorganic

growth, i.e. having an asset size suitable for business

competition and achieving financial performance at the

same level as the average of the commercial banking

industry. As a result, Thanachart Group places strong

emphasisonexpandingbothcorporateandretailcustomer

basetogether.Currently,theGroupisquitewellprepared

and has a competitive advantage. It also places strong

emphasis on risk management so that the risk assets

diversification is the key factor that drives the Group to

have a sustainable growth. Therefore, the expansion of

corporate and SME loans is being implemented for

providing itscustomerswithmorealternatives.Moreover,

with the cooperation from The Bank of Nova Scotia

“Scotiabank” in developing new businesses, Thanachart

Groupoffersnewproductssuchascreditcardbusiness,

tradefinancebusinessandtreasury,inordertoprovideits

customers with superior range of new products. Also,

for the Group strong growth structure, the Group puts in

place the importance of the balance of income between

interest income and fee-based income by developing

fee-based incomebusinessand promotingcross-selling.

The Group has communicated these goals to the staff

throughout the organization in the form of nine strategic

intentswiththedetailsasfollows:

1. Tomeetallstrategicfinancialtargets

2. To maintain market leader in hire purchase

business

MILLION BAHT



PERCENT

2009 2008 2007

FOR THE YEAR ENDED 31 DECEMBER



3. Toincreaseincustomeraccessibility

4. Todiversifybusinessloanportfolio

5. Tohaveadrasticimprovementin

Cross-selling

6. Togrowbyincreasingfee-basedincome

proportion

7. Toenhanceourproductivityand

costeffectiveness

8. Toachieve“Best-in-Class”incustomer

servicing

9. Tobuild-upourbrandstrengthening

Being in line with the vision and strategies

established by Thanachart Group, the above strategic

intents are communicated to all staff at all levels so that

they all share the same determination. In order that the

strategies are in alignment, efficiently measurable and

abletocontroltheorganizationsystematically,Thanachart

Group has developed a long term plan entitled “CEO’s

Six-pointAgenda”whichservesasakeytooltoeffectively

andsystematicallycontrolthekeybusinessplansofallthe

businessunitsoftheGroup.

BUSINESS OPERATIONS OF EACH BUSINESS

GROUP

COMMERCIAL BANKING BUSINESS

CHARACTERISTICSOFSERVICES

TBANK operates its businesses in compliance

with the Financial Institutions Businesses Act and other

relevant notifications issued by the BOT. Among others,

TBANKalsoactsasanadvisorforinvestmentsinunittrusts

and securities trading account opening, a life insurance

brokerage agent, a financial advisor, an agent for

bondholders, andacustodian.Asat 31December2009,

TBANK had in total 256 branches (excluding the

headquarters), 401 ATMs (both in-branches and

stand-alone),3CashDepositMachines(CDMs),91foreign

exchange booths, 76 of which are in-branches,

aswellas15foreignexchangeoffices.

GROUPOFPRODUCTSOFSERVICES

TBANK improves and develops products to

better serve the customer needs. Its four main products

andservices includedeposits, loans,electronicservices,

andothers.

PRODUCTS & SERVICES CHARACTERISTICS COMPETITIVE STRATEGIES

GROUP 1

DEPOSIT PRODUCTS

Deposit products are offered to

customer groups, both retail and

corporate, through its service

outlets. It has four major types

of deposit products including

savings deposits, fixed deposits,

current deposits, and foreign

currencydeposits.

In2009,TBANKdevelopedandofferedtwonew

deposits products to its customers under the name of

“Ultra Savings” and “Premium Current”. This was for

cateringtoallfinancialneedsofitscustomersandcovering

new target group of customers. In addition, the product

packagewaspromotedtoexistingandcurrentcustomers

through product bundling, cross-selling, and up-selling.

ThestrategywassupportedbytheCustomerSegmentation.

The Bank also promoted the “Prestige Banking Service”

which is the program that serves and gives privileges to

the Bank’s high net worth customers. The products and

serviceswereoffered throughvariouschannels including

branchnetwork,electronicchannels,salesandmarketing

teamsaswellasitsbusinessalliancenetwork.



GROUP 2

LENDING PRODUCTS

1. Personal Loans: (1) Mortgage loans under

the brand of “Home 4 You”.(2) Mult i-purposed loansnamed “TBank Home Plus”.(3) Education loans called“Scholar Loan” (4) Wish-list loans are credit lines given tothe hire purchase customerswith good repayment records.(5) Credit Card offered underthe name of Thanachart DriveVisa/MasterCardandgiven tothe hire purchase customerswith good repayment recordsanddepositors.

TBANK places emphasis on efficient servicedelivery and on offer of fully integrated products thatcatered to all customer needs. As well, marketingpromotion, which is in line with the situation andcompetitive condition, is highlighted. The Retail BankingDepartmentisresponsiblefordevelopingproducts,terms,as well as interest rates charged. The target customersare divided into four groups, i.e. customers who needhome loans, customers who need personal loans withhousesas collateral, hirepurchasecustomerswithgoodrepayment records, and customers who need to studyfurther in a higher level. Themaindistributionchannel ispersonal sales and marketing team that looked after thesales target set in the business plan. Moreover, branchnetworkissettoadvertisepersonalloansornewproductstothecustomers.

2. Automobile SMEs TBANK offers this product

to entrepreneurs who haveshort-termfinancialneedswiththeproceedsoftheloanstobeused as their working capitalor for enhancing their liquidityposition as well as those whohavelong-termfinancialneedswith theproceedsof the loansto be used for businessexpansionorreducingfundingcost. These include, amongothers, guarantee/avals andtradefinance.

TBANKplacesemphasisonlendingtocarrelatedentrepreneurs. The plan is set together between theProductDevelopmentteamandMarketingteam.Focusisgiventoselectionofthetargetcustomers,whomtheBankhasdatabaseandgoodrelationshipswith.Also,theBankcontinues placing emphasis on promoting goodrelationshipswithitscustomersbyprovidingthecustomerswithadviceonfinancialandbusinessplanning.Thisisformaintaining the Bank’s existing customers. TBANKcontinuesdevelopingloanproductsthatincorporateotherfinancial services, ensuring that the customers have thecreditlineofcreditandproductsthatmatchtheirfinancialneedsaswellasthefinancialstructurethatisappropriateto their business operations. Loan approval authority isdelegatedbymakinguseofthecreditscoringtechniquesasamaintoolinscreeningandapprovingapplicationsforstandard loan products. The main distribution channelsareinBangkokanditsvicinityandintheupcountry.


3. Corporate Loans TBANK divides corporate

finance customers into threegroups as follows; (1) Large scale businesses which arethe group of customers withannual sales revenue ofover THB 1,000 mi l l ion,(2) Medium-sized businessesincluding the group ofcustomers with annual salesrevenueofoverTHB300million

TBANKsetsthecorporatelendingpoliciesinlinewiththeeconomicgrowthaswellastheriskswhichcouldarisefromgivingloans.TheBankattemptstomanagethecorrelation between risks and the rate of return at anacceptable level.Also, theBankputs aneffort to controlthe quality of loans and develop the corporate bankingteam to be more professional. The Investment BankingGroupwassetforprovidingcustomerswithafullrangeoffinancialadviceaimingatcateringtoallcustomers’needs.Apart from the Bank’s policy of providing loans, thecorporate banking team places emphasis on tying uprelationships with customers and being total solution




who are located in BangkokanditsvicinityandintendtogetaloanworthmorethanTHB50million fromTBANK,aswell asthe group of customers withannual sales revenue of overTHB 200 million who arelocatedoutsideBangkokanditsvicinityandintendtogetaloanworthmorethanTHB25million.(3) Small scale businesseswhich include the group ofcustomers with annual salesrevenue of less than THB 300million who are located inBangkok and its vicinity andintend togeta loanworth lessthan THB 50 million fromTBANKaswellas thegroupofcustomers with annual salesrevenue of less than THB 200millionwhoare locatedoutsideBangkok and its vicinity andintend togeta loanworth lessthanTHB25million.

4. Hire Purchase Loans TBANK gives hire purchase

loanswith focusgiven to loansfor new and used cars. TheBank also offers the sale andleaseback services under theproductnamed‘CashYourCar’.This product is in responseto hire purchase consumerswho need cash. Moreover,TBANK also has other car-related projects such as theNGV loan project which isjointly supported by TBANKand PTT. Under the project,TBANK gives loans at a lowinterest rate for installing NGVequipment and tank, in linewiththepromotiontoreducetheuseofcrudeoiland toprotecttheenvironment.

provider, resulting in the sustainable growth of thecustomers. Moreover, TBANK established the ProductDevelopment Division for corporate customers.Thedepartmentisresponsiblefordesigningproductsandservices thatmeet theneedsof thecustomers inamostefficient manner. As well, the Bank invested in creditsystems and streamlined the internal work process,ensuring that they are shorter and more flexible.The objective is to give services to the customers moreefficiently. Focus is given to large and medium scalecustomers with strong performance, particularly thosein the target sector in Bangkok and in the upcountry.Focus is also given to expansion of the client base tocover supply chain of the target customer groups.Thechannelsofdistribution includesTBANKheadoffice,cross selling of the Group, branch network, businessalliancenetwork,aswellaselectronicbanking.

TBANKstreamlines the loanprocesswithcautiousmanners.Theloansservicesareprovidedattheheadofficeandbranches ineveryprovincial area. TheBanksets thepolicy to offer a competitive price in the market and alsomakes the terms of its hire purchase loans more flexiblewithin the limits established. In addition, TBANK placesemphasisonafter-saleservices, salespromotionactivitieswiththecardealersinaggressiveandpassivestyles,aswellasestablishing relationshipswith theautomanufacturers’companieswhichgivehirepurchase loans.TheBankalsoadopts a market penetration strategy aims at gaininga larger market share of the automobile hire purchasebusiness.ItinvitesthecustomerswhohaveusedtheBank’sservicesbefore, togetahirepurchase loan from theBankagaintobuytheirsecondcar.Inaddition,TBANKfocusesitsmarketingeffortson thecustomersusing thehirepurchaseservicesofothercompaniesaswellasthosewhohaveneverusedthehirepurchaseservicesbefore,suchasindividualorcorporateclientswhopurchasetheircarsbycash.TheBankalso increases channels through its customer base byfocusing on the high potential customers and organizingspecial campaign with car dealers offered to specificcustomergroups.



GROUP 3

ELECTRONIC PRODUCTS AND SERVICES

5. Trade Finance TBANK provides a full range

of trade finance products andservices including Import L/C,Trust Receipt, Packing Credit,ExportBillNegotiation,StandbyL/C,andLetterofGuarantee.

TBANK offers electronic productsand services that enable financialtransactionsof itscustomers tobeprocessed in a more efficientmanner. These services includefund transfer service, AutomaticTransfer Service (ATS), onlinesettlement for financial transactionsthrough the Bank of Thailand’sAutomaticHigh-VolumeTransactionNetwork (BAHTNET), automaticmoney transfers between banks(SMART)andbill payment servicethrough various channels of theBank.

1. Foreign Exchange Services TBANKservicesincludeforeign

exchange services in form ofbanknotesandtravelerchecks;money changers; forwardforeignexchangeforcustomers’international trading businesstransaction; foreign currencytransfers in/out of the countryfor payments of goods orfor transfers into personalaccounts; and opening ofForeign Currency Deposit(FCD)accountsandetc.

Accuracyinservices,convenience,interestrates,and fees are the main variables in encouraging thecustomers to use the Bank’s trade finance services.The Bank takes into consideration the income frombusiness transaction of customers and the creation ofcustomerbaseasthemainconcerns.Thetargetgroupsofcustomersarecorporate,SME,and retail clients. For thecorporate clients, the Bank has the target to build upfuturecustomerbaseandexpand itsnetworkaround theworld. On the other hand, SME and retail clients areconsideredas themainsourcesof income.TheservicesareprovidedthroughcorporateandSMEloansmarketingofficersandtheBankbranchnetwork.

Thecompetitivestrategy focusesonappropriatefee pricing and sales promotions including cross-sellingandup-selling.Usingthisstrategy,TBANKcouldproposeits services to both small and large scale companies.TheBankincreasesthepromotioncampaigntoattractthecustomers aiming at easy accessibility and services.For example, customerscan draw down the loan on thedate when the transaction is executed. Branches havebeenopenedinshoppingcentersfocusingoncustomerswho want convenient service and safety money transfer.In addition, TBANK has developed e-service system tobetterservetheneedsofcustomers.

TBANK has expanded its branch network andforeignexchangeofficestoserveallbusinesssectorsandtouristsnationwide.TheBankalsoadjustsexchangeratesby benchmarking with the movements of the world’scurrencymarket.Asaresult,itscustomersreceivetherealtimeratesandfairprices.

GROUP 4

OTHER PRODUCTS




2. Bill of Exchange TBANK has expanded its bill

of exchange products andservices to every branchnationwide. This results in themore convenience for thecustomersandtheincreaseinservice accessibility to coverall areas. The product is wellaccepted and accredited bythecustomers.

3. Bondholder Representative Services

TBANK’s securities businesssupport services are, forexample, custodian, trustee,fundsupervisor,andbondholderrepresentative according tothe approvals from the BOTandtheSEC.

In 2009, TBANK developed methods of B/Eservices to be convenient, safety, and more confidentgiven to its customers. In this connection, theB/Ebookswhichwereforcheckingtransactionlistsandoutstandingof investments ineachBank’sB/Ewereintroducedtothecustomers. TBANK also facilitated its customers bytransferring payments of principal and interest when theB/Ematuresor transferringapaymentof interestofeachperiod automatically to the customers’ savings accountsor current accounts as stated in each purchase order.Target customers are depositors both individual andcorporate clients who have knowledge, understanding,and experience in investing in debt instruments andacceptacertainleveloftheBank’screditrisk.

Securities Supportive Services Business havebeen growing in parallel with the capital market. TBANKrecognized this asanopportunity, and thus, attained theBondholders’ Representative service in order to have fullfinancial servicesandbetter satisfy thecustomer’sneeds.By the end of 2005, the Bondholders’ Representativeservice was transferred from TCAP and the service wasentrusted by the regular customers of TBANK. In 2008,TBANK further enhanced its service by acquiringpermission to operate Custodian and Trustee services.Howeverwithhighcompetition in thesecuritiessupportiveservices business which resulted in low profit margin,business operators turned to use cost leadershiptactic-emphasis on volume created cost saving togetherwithastrategytocross-sellotherfinancialservices.


Khon Troupes for Culture Preservation

Donated fund to support Mr. Somsong Khun-arj (Khru Chu Cheep), the role-modeled teacher who devoted himself in teaching ‘Khon’ traditional dance to the interested children which helped preserve the Thai culture for the future generations.



INFLUENTIAL FACTORS OR CONSTRAINTS ON

BUSINESS OPERATION

In 2009, credit lending to private sector of the

financialinstitutionexpandedataslowerrate,mainlydue

to a low demand both domestic and foreign which

resulted in less demand in loans. Moreover, commercial

banksbecamemorestrictincreditlendingpolicyinorder

to prevent bad debts. Hire purchase loan was affected

fromtheeconomiccondition.Thesalevolumeforbothcar

and motorcycle in 2009 have decreased, resulting in

adecreaseinnewbusinessloanforhirepurchase.

Apart from the economic and political factors,

changes initiated by the authorities concerned in some

areas representedbusiness constraints in the short-term

but helped strengthen the financial system and

standardize the Thai commercial banking system in the

long-term.AftertheFinancialInstitutionBusinessActB.E.

2551becameeffective,BOTimplementedBaselIIPillar2

in the commercial banking industry, which affected the

calculation of the capital adequacy and risk assessment

and consolidated supervision regulation. Consequently,

commercial banks shall adhere to the capital adequacy,

related business, credit lending, investment, obligation,

riskmanagementofthefinancialbusinessgroup,andetc.

Moreover, the good corporate governance

emphasizedonthedirectorsandexecutivestosupervise

allactivitiesof the financial institutions,and thus,allowed

businessoperationtobetransparentanwithoutaconflict

of interest. The key positive contributing factors in the

commercial banking business during 2009 included

permission request, framework expansion, service

expansionofthecommercialbanks,suchas:

• permission for commercial banks to operate

private repo business for lending, borrowing of foreign

currency by using foreign currency debt securities

as collateral with eight types of institutional investors by

thecurrencyexchangecontrolstaff.

• permission for commercial bank to borrow

andlendforeignsecuritieswitheighttypesof institutional

investorspermittedbythecurrencyexchangecontrolstaff

• expanding service scope for commercial

banksbeingabletoprovidesupportiveservicesandother

insourcingservices.

INDUSTRYOUTLOOKANDCOMPETITION

At the end of 2009, there were a total of

32 commercial banks in the industry, of which 17 banks

werelistedand15bankswereforeignbank’sbranch.

Considering the deposits amount of the

commercial banking industry, the total amount was

THB7,121,319million,ofwhichTHB6,654,901millionor

93.45 percent of total deposits came from listed

commercial banks and THB 466,418 million or 6.55

percentoftotaldepositscamefromforeignbank’sbranch.

At theendof2009,deposits inThaicommercialbanking

industrygrew0.08percentfromthesameperiodlastyear.

The slower rate was a result of the downward trend of

interest rate which caused the investors to transfer their

investmentstoothertypesofinstruments.

Considering the net loans of the commercial

banking industry, the total amount was THB 7,807,233

million,ofwhichTHB6,964,834millionor89.21percentof

total loans came from listed commercial banks and

THB 842,395 million or 10.79 percent came from foreign

bank’sbranch,similartothatofthepreviousyear.

Apart thecompetition inthecommercialbanking

system, there is also competition in the financial system

such as non-banks, financial market, capital market, as

wellas thestate’sspecialized financial institutions,which

playamoreactiveroleintheeconomicsystem,asaresult

of the changes in the regulators’ rules and regulations.

The changes allow for more flexibility and prepare the

industry for the financial liberalization in the future.

Thekeenercompetitionhascausedthecommercialbanks

toadoptnon-pricestrategies,suchasdevelopingamore

diverse range of financial products, increasing more

distribution channels, improving quality of service, and

establishing business alliances in the finance business.

The objective is to provide the customers with greater

convenienceandtocater toall thefinancialneedsof the

customers.Moreover,thecommercialbanksplacestrong

emphasisonbuildingapositivecorporate imagefor their

organization, e.g.byorganizingpublic relationsactivities

and corporate social responsibility (CSR) activities.

The non-price strategies are in addition to the price

strategywhich remains theprincipalstrategypursuedby

thecommercialbanks.



The most recent Monetary Policy Committee

“MPC”meetingon13January2010hasmaintaineda1.25

percent policy rate, the same rate since April 2009.

At the end of 4th quarter 2009, interest rate on 1-year

fixed deposit of the commercial banks was in the range

of 0.65-1.60 percent while loan rate of the listed

commercialbankswas intherangeof6.44-7.13percent.

Consequently, interest spread of the commercial banks

wasintherangeof5.53-5.79percent.

THEBANK’SSIZECOMPAREDTOCOMPETITORS

At the end of 2009, TBANK had THB 432,970

million in totalassets,accounted for5.02percentmarket

share.TheBankwasrankednumber7inthecommercial

bankindustry.TBANKcaptured5.09percentmarketshare

for deposits and short-term borrowings, equivalent to

THB341,496million,andwasrankednumber7amongthe

commercial bank industry. The Bank’s total loans were

THB 283,571 million, accounted for 4.75 percent market

share,andwas rankednumber7among thecommercial

bankindustry.

FUTURETRENDOFCOMPETITION

Many economic indicators, whether domestic

or foreign, have shown sign of improvement. The Thai

economyin2010wasexpectedtoexperiencecontinuous

expansion,asaresultofrevivedglobaleconomy,government

stimulusmeasuresandimprovedbusinessconfidence.

Inflationin2010wasexpectedtoincreaseathigh

acceleratedrateuntiltheendoftheyear.Thiswasaresult

ofoilpricethathadexperiencedasharpdecreaseinthe

previous year. The accelerated increase should happen

only in the1stquarterand the inflationshouldmaintainat

around2-4percentafterthat.Theincreasedinflationdoes

not fully reflect the price adjustment of products and

services.Itwasmainlyaresultofoilpriceadjustment.

The trend of the banking industry in Thailand in

2010 is that electronic banking will continue to develop,

which will result in the fee base income generating,

as well as, other services for customer group, such as

internetbanking,cashmanagement,mobilebankingand

etc. Moreover, strategic alliances with other businesses

willenhancecapabilityinordertobettersatisfythevarious

needs of customers. This includes cross-selling among

the financial business group, e.g. Bancassurance of life

andnon-lifeinsurancebusinesses,andetc.

Loangrowthin2010willbesupportedbythefirst

economic stimulus policy from the government in the

amount of THB 280,000 million to stimulate income

distribution, job creation in upcountry and to increase

purchasingpower.Thesecondeconomicstimuluspolicy

wasintheamountofTHB1.43trilliontostimulateregional

economy. Also, there were previous economic stimulus

measures throughspecial financial institutions inorder to

supportsmallandmediumenterpriseloansandconsumer

lending.

Theriskfactorsin2010remaintobetheunstable

political circumstance,whichcouldaffect theconfidence

of invests. Another issue is Map Ta Phut conflict which

hasnotyetarrivedtoanyconclusiveresolution.Thiscould

affect in the corporate loan slowdown in 2010. As for

regulatory risk, the effect will not be apparent in 2010.

The effect on commercial banking business is expected

to present itself in 2011 and 2012 which means that

commercial banking sector still has couple of years to

makeadjustment.

PRODUCTS OF SECURITIES BUSINESS AND

FUND MANAGEMENT BUSINESS

Securit ies Business is provided through

Thanachart Securities Public Company Limited “TNS”.

ThecompanywasgrantedaFullLicensetooperatefullrange

of securities businesses including securities brokerage,

proprietary trading, securities underwriting, investment

advisory service, mutual fund management,private fund

management, securities borrowing and lending, venture

capital management, and derivatives business Sor 1.

As well, the company is engaged in other related

businesses that support the securities business. As for

Fund Management Business, the service is provided

throughThanachartFundManagementCompanyLimited

“TFUND” who operates mutual fund, private fund, and

provident fund management businesses. In addition,

thecompanyalsooperatesinvestmentadvisorybusiness.

SECURITIESBUSINESS

PRODUCTS AND SERVICES

TNS operates two key areas of business,

brokeragebusinessandinvestmentbankingandadvisory

business. As of 31 December 2009, the company had

atotalof25branchesandofferedthefollowingservices:



1. Brokerage Business covers brokerage

serviceswhichalsoincludeaserviceofprovidingrelated

analytical information for various types of customer,

whether individual, retail, institutional, local, or foreign,

tomakedecisionontheirinvestment.

2. Derivative Business covers trading services

forfuturecontractsandderivatives.

3. Securities Borrowing and Lending (SBL)

cover services of borrowing or lending securities for

customerwhohasadesiretoborroworlendsecurities.

4. Investment Advisorycoversservicesofseeking

or issuingnew financialproduct,whether local or foreign,

inordertosatisfythecustomer’sneeds,whichalsoinclude

providing a customer with structured plan on systematic

investment and investment diversification by prioritizing

customer’s suitability and investment target of each

customer.Investmentcoversvarioustypesofinstruments.

5. Unit Trust Underwriting and Repurchasing

Services cover services of sale support and providing

informationonmutual fundsofvarious fundmanagement

companiesthatTNSrepresents.

6. Financial Advisory and Securities Underwriting

Services cover financial advisory business, underwriting

service,underwritingguaranteeofdebtandequitysecurities,

a role of underwriting and guarantee management,

underwriting and guarantee co-management, and

underwritingandguaranteeunderwriter.

7. Securit ies Registrar covers three types

of services, namely, a securities issuance registrar,

securities holder registrar, and a registrar for the

employeestockoptionprogram(ESOP)

COMPETITIONANDMARKETOUTLOOK

1. Brokerage business in 2009 improved once

compared to 2008, whether in the aspect of SET index,

market capitalization or trading volume. The key positive

contributing factors were economic recovery and the

betterperformancesofthelistedcompanies,whichhitthe

lowest point during the 4th quarter of 2008. In 2009,

averagedailytradingvolumewashigherthanthatof2008

and peaked as the highest volume in the past 5 years.

Retailclienttransactioncapturedthehighestvolumewhile

foreignclient transactionreturnedtobenetbuy. In2009,

therewereatotalof17listedcompanies(6companiesin

SETand11companies inmai)and5property fundsthat

raised capital in the primary market. In 2009, SET index

closedat734.54points,higherthan449.96pointsin2008.

Trading volume was a record high since 2005. Average

daily trading volume was at THB 18,226 million. Trading

volume of TNS was THB 378,274 million, accounted

for 4.27 percent market share, ranked number 7, out of

35 companies in the industry. The trading volume and

marketshareofTNShascontinuedtoincreasesince2005.

2. Currently, therearea totalof41members in

the Thailand Future Exchange (TFEX), of which 36 are

general securities companies. In 2009, 5 gold-trading

members were included as a TFEX member, in order to

supportgold future trading. In2009, totalvaluewasTHB

1,334,318 million, equivalent to a daily average of THB

5,589 million. Total trading volume was 3.08 million

contracts, accounted for a daily average of 12,771

contracts,anincreaseof44percentfromadailyaverage

of 8,837 contracts at year-end 2008. Internet trading

accounted for 21 percent and SET50 Index Futures was

theproductofhighest transaction,84percentof the total

trading volume. As of 30 December 2009, there were

28,281 open contracts and 29,647 derivative trading

accounts,anincreaseof86.5percentfromyear-end2008.

Gold futures product began with trading transaction on

February 2009 and single stock futures product had

added 11 non-voting depository receipts (NVDR) during

June. Both products attracted much attention from

investors. For gold futures, an annual average trading

volume was 1,397 contracts per day, accounted for

10 percent of the total derivative trading volume. Single

stock futurescapturedanaverage tradingvolumeof600

contractsperday,tripletheamountofthatintheprevious

year.

3. Currently, investment advisory service is

offered only to the top-ranking securities. However, the

competition among the banking industry is aggressive,

mainly due to the clustering of target group in Thailand.



Each bank attempts to attract customers by offering full

financial service, convenience and luxury. Moreover,

there was competition in private bank service in foreign

country,whichfocusesoninvestmentinvarioustypesand

instruments in order to create satisfying return to VIP

customersinThailand.

4. Infinancialadvisoryandsecuritiesunderwriting

service,competitionwashighduetothelargenumberof

competitorsthatisstillincreasing.Someserviceproviders

have foreign alliance. And with the current economic

situation, pricing competition has intensified. However,

the key competitive factor still remains to be service

quality,personnelexpertiseonprovidingacustomerwith

relevant advise and solution to a problem, as well as

product innovation, which can create value added and

morebenefittocustomers.

FUNDMANAGEMENTBUSINESS


TFUND puts importance and emphasis on

agreat rangeof retailmutual fundsmarketingstrategies,

in order to fully covers all needs of investors in every

group and level. The company utilized many types

of distribution channels for sale, including a direct sale.

The employees are qualified by laws and are strictly

enforced to adhere to related laws and regulations.

For greater convenience, TFUND offers unit trusts sale

through the Bank’s branch network and operates unit

trustssaleand repurchasingofother financial institutions

approved by the SEC. Furthermore, service quality

continues to improve for better efficiency through

electronicchannel.

COMPETITION AND MARKET OUTLOOK

Attheendof2009,therewereatotalof20fund

management companies, accounted for a total assets

under management of THB 1,528,058.14 million

(excluding Vayupak Fund, foreign investment funds,

property fund for resolving financial institution problem

and property and loan fund), a 25.40 percent increase

from2008.During2009,therewere605newissuedfunds,

accounted for THB 590,754.83 million of assets. Among

the newly issued funds, 375 were foreign investment

funds, comprised of debt instruments with maturity not

exceeding 1 year, which accounted for THB 440,787.34

million or 74.61 percent of assets of the newly issued

fundsduring2009.

As of 30 December 2009, TFUND had 78 retail

mutualfunds,accountedforTHB74,713.96millionassets

undermanagement,an increaseof2.79percent fromthe

previous year. With a market share of 4.89 percent, the

company was ranked number 5 among 20 management

companies in the industry. The increase in assets under

management mainly came from Korean bond funds that

accounted for THB 16,760.97 million or 79.25 percent

ofallfundsoffered.Asof30December2009,TFUNDhad

23 private funds accounted for THB 8,256.46 million,

an increase of THB 6,741.64 million or 445.05 percent

from the previous year. In addition, there were 22

providentfundswhichaccountedforTHB4,511.76million,

an increaseof THB 504.66millionor 12.59percent from

thepreviousyear.

PRODUCTS OF INSURANCE BUSINESS

InsurancebusinessofThanachartGroupcanbe

divided into two key areas of business, namely non-life

insurance business operated by Thanachart Insurance

Company Limited “TNI”, which offers all types of non-life

insuranceservices,and life insurance businessoperated

byThanachart LifeAssuranceCompanyLimited “TLIFE”,

which offers life insurance services to institutional,

corporateandindividualcustomers.

NON-LIFEINSURANCEBUSINESS


TNI offers all types of insurance services, e.g.

fire,automobile,marine,miscellaneousandinvestment.


In 2009, non-life insurance business in Thailand

experiencedagrowth inpremium incomeoncecompared

to2008.Eachcompanytriedtoadaptconstantlyinorderto

gaincompetitiveadvantage, forexample,pricingstrategy,

newproductdesignthatofferslowpricebutstillsatisfiesthe

customer’s needs, more claim coverage, promotional

campaigns through various medias-television, radio,

newspaper, advertisement poster board, branding image

inordertocreatecustomer’sawareness.

Moreover,manycompaniesputmorefocusonthe



post-saleserviceimprovement,channelexpansion,utilizing

new technology in order to improve and streamline

working procedures. At the same time, many companies

emphasized on business alliance to expand sale

channels, i.e. commercial bank’s branches, grocery

store’s counters, department stores or telemarketing,

in order to enhance competitive capability and to better

theaccessibilitytoretailcustomers.

TNI focuses on a standard of good service

quality, productivity, efficiency, and honesty, as well as

development of products in order to offer new policy

which is more coherent with the economic, social

condition and the needs of customers, by taking into

consideration a fair premium rate to customer.

Furthermore, the company constantly adjusted its

progressive competitive strategy to be coherent with the

ever-changing conditions, by ways of increase sale

channel,expandtonewcustomerbase,maintainexisting

customerbase.Asmuchas95percentofallcustomersis

thecustomergroupwithpolicyclaim limit not exceeding

THB5million.Thecustomersmostlyselectedautomobile

andfireinsuranceandthesecustomersmainlycamefrom

the Bank’s lending customers base and from the

company’smarketingcampaigns.

ThecustomergroupwithpolicyclaimlimitofTHB

5 million and more comprised of institutional customers,

private enterprises that possesses branch network,

whether commerce or industrial. Major portion of this

customer groups selected miscellaneous and fire

insurance. As aforementioned, it can be concluded that

TNI has never relied on any customer that accounted

formorethan30percentofTNI’stotalrevenue.Moreover,

the service is only offered to domestic customers in

Thailand.

According to Thai Reinsurance Public Company

Limited, the insurance industry will experience a slight

expansionof5.6percentinpremiumreceivedoratotalof

THB 115,040.11 million in the year 2010. Under the

assumption is that the Thai economy will expand by

0.25-1.00 percent due to various measures and policy

which each government attempts to implement to

counteract the crisis, as well as, the violent conflict that

hasatendencytoberesolved.

LIFEINSURANCEBUSINESS


TLIFEofferslifeandhealthinsurance,whichcan

be divided into two key categories, e.g. individual and

groupinsurance.


TLIFE operates its business with a multi-

distribution channel strategy, in order to satisfy various

needsofthecustomersbyofferingproductsandservices

coherentandsuitableforeachcustomergroup.Currently,

the company has utilized various channels, such as,

corporate network, corporative network, insurance agent,

bancassuranceandinsurancebroker.

In 2009, life insurance business expanded

substantially, especially through bancassurance channel.

This was a result of economic downturn which affected

many bank’s credit lending business to contract. Each

bankhadtorelyonthepremiumincomeof life insurance

policy. Overview of the business sector in 2009 showed

agrowthof16-18percentwhilein2010thegrowthrateis

expectedtobewithin therangeof15-20percent.Market

penetration through commercial bank in 2009 was

successful and thus resulted in a prediction that various

banksthathavealliancewithlifeinsurancecompanieswill

put more importance on product development, sale

promotion and staff training for them to gain more

knowledgeandskills.Atthesametime,theagentchannel

willcontinuetoself-cultivateinordertobeabletoprovide

consultancyandstructureafinancialplanforacustomer.

In the 11-month period 2009, TLIFE captured

a total market share of 4.71 percent and was ranked

number 8 in the industry. Market share of first year

premium received was 13.27 percent and was ranked

number2intheindustry.

The industry is expected to grow by 15-20

percentin2010.Thiswasundertheassumptionsthatthe

globaleconomywillreviveandwillpositivelyaffectallThai

business sectors, which would then enhance life

insurancebusinessfromtheincreaseinpurchasingpower

and consumer’s confidence. Furthermore, the Bank

interest rates are still low while the return on the life



insurancebusinessmaintainstobehigher.Thecooperation

betweenbanksandlifeinsurancecompanieswillfocuson

sale expansion in bancassurance channel and new

businesschannelinordertoacquirebetteraccesstothe

customers, as well as, product development which will

satisfythecustomer’sneedsandissuitableforeachsale

channel. In addition, the government may adjust its

regulationandallowlargerlimitontaxwrite-offfromhealth

insurance policy, individual insurance policy, pension

policyandetc.

PRODUCTSANDSERVICESMANAGEMENT

SOURCE OF FUND

One source of TBANK’s fund is the capital,

comprisesofissuedandpaid-upcapitalwhichwasinthe

amount of THB 19,346 million in 2009, including legal

reserveandretainedearnings.Thereareanothertwokey

sourcesoffundwhichare:

1. Deposits which by the end of 2009 were

in the amount of THB 266,727 million, a decrease from

THB270,832millionattheendof2008.

2. BorrowingswhichwereintheamountofTHB

90,936millionandcouldbedividedtoTHB75,936million

short-termborrowings,mainlycomprisedofshort-termB/E

sinceTBANKaddedB/Easanothersavingalternativefor

customers,andTHB15,000millionlong-termborrowings.

FUNDING AND BORROWING OF PARTIES RELATED

TO EXECUTIVES OR MAJOR SHAREHOLDERS

At the end of 2009, TBANK gave loans to

a parent company, subsidiary companies, and related

companiesinThanachartGroupasfollows:

1. TGL(subsidiarycompanyofTBANK)

TBANKlenttothecompanyforhirepurchase

business for all types of automobile in line with the

business direction of Thanachart Group. In 2009, loan

outstanding balance was THB 2,168 million, a decrease

fromTHB3,645millionattheendof2008.

2. TLEASING(subsidiarycompanyofTBANK)

TBANKlenttothecompanyforhirepurchase

businessofautomobileforcommercialusesandprivately

owned automobile which can seat no more than seven

persons,aswellas,motorcycleasapprovedbytheBOT.

On5 July 2008, thecompanywas permitted to operate

motorcyclehirepurchasebusinessinsteadofTGL.Andin

2009, loan outstanding balance was THB 634 million,

adecreasefromTHB824millionattheendof2008.

3. National Leasing (subsidiary company of

ThanachartGroupLeasing)

TBANK lent to thecompany forpropertyhire

purchasebusiness,aswellas,property leasing. In2009,

loanoutstandingbalancewasTHB77million.

4. TLA(subsidiarycompanyofTBANK)

TBANKlenttothecompanyforlegaladvisory,

litigation,lawsuitexecutionandcollateralappraisalservices.

In2009,loanoutstandingbalancewasTHB10million.

Loan outstanding balance of Thanachart

Group, as aforementioned, totaled to THB 2,889 million,

accountedfor1.02percentoftotalloansatyear-end2009.

Alllendingandborrowingactivitiesweretransactedunder

thepermissionoftheBOT.

Foundation for the Better Life of ChildrenSupported the training on “Development of Agri-Nature for the sufficient economy system” arranged by the experts from Pongrad Agri-Nature Center in Chanthaburi province to the children. The training was aimed at encouraging the children to apply these principles to their everyday lives as well as raising their awareness on the sufficient living in order to grow up as good-quality adults.



Thailand’seconomycontractedin2009,following

the severedownturn in global economyespecially in the

first quarter of the year. The underlying causes of the

downturn stemmed from the credit tightening and

shortage of liquidity in global financial institutions

includingthelackofbusinessandconsumers’confidence

worldwide.Thecrisisledtoasharpdeclineinmostmajor

export items to all major markets. Together with the

domestic political issues, the contraction of the Thai

economywasmore severe than expected.Nevertheless,

theThaiexportsstartedtorevivesincethesecondquarter

as theworldeconomystarted toshowsignsof recovery.

In accordance with the timely government’s measures

duringthecrisis,theThaieconomyrevealedthecontinued

signs of recovery with the improvement of consumption

spending and increasing number of inbound tourists.

In 2010, the Thai economic recovery is expected to

continuewith theglobaleconomy, leading to theupturns

inmanufacturingsectorandtourismgoingforward.


“TBANK”andThanachartFinancialConglomeraterealized

the importance of such risk factors and the Board of

DirectorsandexecutivesofTBANKhavethereforeclosely

monitored the business operation as well as made an

effort todevelop the riskmanagementsystemcontinually

to cushion for any possible risks. Nonetheless, as the

credit lending has been TBANK’s major business and

sourceofearnings,TBANKalsocontinuedtogivepriority

todevelopmentsofcreditlendingmeasuresandthecredit

riskmeasurementtools,e.g.behaviorscoringwhichwould

helpTBANKtomanageriskproperlyandcoherentlywith

theriskprofile.

Furthermore,toreaffirmthestrengthandstability

ofthefinancialpositionofTBANK,theBankiscurrentlyin

the stage of developing the Internal Capital Adequacy

Assessment Process (ICAAP) under Pillar 2 of Basel II

frameworkinaccordancewiththeBankofThailand(BOT)

guidelines.TheprocesswouldallowTBANKtoeffectively

manageitscapitalaswellascontrolandmanagerisksin

the periods ahead. To support such framework, TBANK

strategically establish a structure of the organization to

supporttheoperationunderthedirectionandsupervision

ofthefollowingcommittees.

THE BOARD AND COMMITTEES AT THE POLICY

LEVEL:

TBANK’s Board of Directors and the Executive

Committee has a role in policy determination and

establishesguidelines foranefficiententerprise-widerisk

management by taking into consideration the impact of

risks on TBANK’s operational goal and financial position

thathastobeinlinewithitsnormaloperation.

Risk Management Committee plays a role in

establishing strategic plans and developing the risk

management procedure, as well as considering

appropriate riskmanagementpolicyandguidelinewhich

wereproposedtotheExecutiveCommitteeandtheBank’s

BoardofDirectorsforconsiderationandapproval.

Audit Committee has a role in determining the

supervisory guidelines for the operation to comply with

measures of related authorities as well as assessing the

effectiveness and competency of the risk management

processandinternalcontrolsystem.

THE COMMITTEES AT THE OPERATIONAL

LEVEL:

Asset and Liability Management Committeeplays

arole insupervisingthestructureoftheBank’sassetsand

liabilitiestobeappropriateforcharacteristicsofthebusiness

andinlinewiththeBank’sriskmanagementpolicy.

Investment Committeeplaysa role insupervising

investment in financial instrumentsof TBANK tobe in line

withtheBank’smarketriskmanagementpolicy.

RISK MANAGEMENT AND RISK FACTORS



Credit Committeeplaysa role insupervising the

credit lending andother credit-related transactions tobe

inlinewiththeBank’screditriskmanagementpolicy.

IT Security Management Committeeplaysarole

inestablishingpolicies regarding the ITSecuritySystem,

proposingpreventivemeasuresagainst risksarising from

informationandtechnologysystem,aswellasmonitoring,

supervisingandcontrollingtheoperationoftheITSecurity

Systeminaccordancewiththeproposedplan.

TBANK’SRISKMANAGEMENTSTRUCTUREASOF31DECEMBER2009

Risk Management Division Risk Management Committee Audit Committee

EXECUTIVE COMMITTEE

THE BANK’S BOARD OF DIRECTORS

Internal Audit Group

Compliance Department

Head of Risk

Risk Management Department

Asset and Liability Management Committee

Investment Committee Chief Executive Officer

Chief Operating Officer

Head of Operation

Credit Committee IT Security

Management Committee

Credit Analysis Department

Risk Control Department



• The conduct of business affairs is under a

system of check and balance with the Middle Office,

comprisingof theRiskControlDepartmentand theBack

Office,beingseparatedfromtheFrontOffice.

• TBANKwouldputinwritingalltheestablished

policiesandguidelinesregardingtheriskmanagementthat

specifiesresponsibilitiesofrelatedunitsastheoperational

guidelines for the employees. Moreover, the Bank has

established a four-step guideline for risk management

comprisingof:1)identificationofthecharacteristicsofrisk

aswellasriskfactors,2)developmentofappropriatetools

and models for risk measurement, 3) the control of risks

withinacceptablelimits,and4)theclosemonitoringofrisk

status in order to properly manage any possible risks in

atimelymanner.

• The difference in size and risk ratios

determinedforeachexposureallowedTBANKtobeable

toperceivethedegreeofseverityfromthepossiblerisks.

Theseriskvariablescouldalsobeusedasaceilingorthe

acceptablerisklevelaswellastoprovidewarningsignals

beforeseverelossesoccur.

The aforementioned risk management systems

are developed based on prudent principles and will be

reviewed regularly to suit prevailing situations.

The systems are designed to be transparent, explicit,

examinable, and to take into consideration the interests

ofshareholders,customersandstaffoftheBank.

KEY RISK CATEGORIES OF TBANK

1. CREDITRISK

Credit risk arises from a situation in which the

debtorsorcounterpartiesfailtorepayorfulfilltheiragreed

obligations.Thismightbecontributedbythefactthatthe

debtor’s financial position is under distress due to

volatilities of economic conditions that pose adverse

impact on businesses, or the debtors’ mismanagement,

which as a result, may adversely affect TBANK and the

subsidiaries’ earnings and capital. The credit risk may

arise from ordinary financial transactions such as credit

lending, financial obligations in the form of avals or

guarantees,othertransactionsrelatedtocreditlending,as

well as investment in market instruments issued by state

agenciesorstateenterpriseswithneitherguarantee from

government nor the BOT, and private debt instruments

suchasdebentures.

Under its credit risk management policies and

guidelines,TBANKhavesuccessfullyestablishedacredit

culture. To start with, the credit risk of the borrowers,

counterparties, or issuers of debt instruments will be

independently assessed by the model developed

specificallytoeachtypeofborrowersorcounterpartiesby

theCreditAnalysisUnit.Atthisjuncture,authorizedCredit

Committeewouldthenconsideranddeterminethelevelof

credit risk of borrowers or counterparties, appropriate

credit linesandinvestmentbudget,aswellasTermsand

Conditions on loans or other obligations. The Committee

also controls the overall risk status by appropriately

diversifying credit risk into various business sectors and

groups of customers within the established risk ceilings.

Inaddition, theCommitteecloselymonitors thequalityof

loans to ensure proper and vigilant management by

emphasizingonbusinesscapabilityandrepaymentability

under thesupervisionofan independentriskcontrolunit.

Apart from the aforementioned units, there is also an

Internal Audit Group to verify that the credit transactions

areincompliancewiththeBOT’sguidelines.

Toensureoptimalreturnsunderacceptablerisk,

TBANKhasemployedmeasuringtoolcalledRAROC(Risk

AdjustedReturnonCapital)toreflecttheappropriatelevel

ofcapital.Moreover,theBankalsoperformedstresstests

toestimateanydamagethatmayoccurduringthecrisis.

Underthiscondition,theborrower’sabilitytorepaycould

erodeortheycouldfailtomakearepaymentunderTerms

and Conditions stated in the hypothesized contract.

The risk factors in the tests were assumed to affect the

industrythatthedebtors’businessbelongedto.

IMPORTANT CREDIT RISK FACTORS

1.1 CREDIT CONCENTRATION RISK

TBANK aims to appropriately diversify its

loans to various groups of customers, focusing on high

potentialcustomers,andattempttopreventconcentration

of loans to a particular group of customers. Under such

goal,theBankpursuesproperriskmanagementonoverall

creditportfolioswithclosemonitoringandcomprehensive

assessment to report to the assigned committees on

a regular basis. The purpose is to mitigate exogenous

risks that may adversely affect any particular group of

businessexcessivelyfinancedbytheBank.



The overall credit data revealed that TBANK’s

lendingon hirepurchase business increased from72.59

percentasof31December2008to72.94percentoftotal

loansandaccruedinterestreceivablesasof31December

2009. Nonetheless, most of these hire purchase loans

were provided to retail customers whose credit line was

relatively small, and with a large number of customers,

suchriskthereforewaswelldiversified.

1.2 RISKS FROM NON-PERFORMING LOANS

The non-performing loans are loans

classified as substandard, doubtful and doubtful of loss.

They have been the major concerns across financial

institutions due to their adverse effect on earnings and

capital of TBANK and subsidiaries. At this juncture,

TBANK has focused major efforts on controlling credit

quality through appropriate policies and procedures to

regularlymonitorthequalityoftheloans.

THE DATA ON CREDIT STATUS AS OF 31 DECEMBER 2009 COMPARED TO 31 DECEMBER 2008 CLASSIFIED BY

BUSINESS TYPES WAS AS FOLLOWS:

Parentandrelatedcompanies 3,337 1.18 12,815 4.69

Agriculturalandmining 2,606 0.92 1,152 0.42

Manufacturingandcommerce 16,153 5.71 12,819 4.69

Realestateandconstruction 15,590 5.51 14,625 5.35

Publicutilitiesandservice 15,677 5.54 13,015 4.76

Housingloans 6,948 2.46 7,393 2.71

Hirepurchase 206,320 72.94 198,344 72.59

Others 16,228 5.74 13,065 4.78

Total loans and accrued interest receivables 282,859 100.00 273,228 100.00

BUSINESS TYPE

THE NPL RATIOS AS OF 31 DECEMBER 2009 COMPARED WITH THOSE OF 31 DECEMBER 2008 WERE AS

FOLLOWS:

Substandard 1,336 15.93 1,547 21.47

Doubtful 2,005 23.91 1,629 22.61

Doubtfulofloss 5,046 60.16 4,029 55.92

Total 8,387 100.00 7,205 100.00

TBANK’s non-performing loans increased from

THB7,205millionasof31December2008toTHB8,387

million as of 31 December 2009 due to the economic

slowdown. From the credit overview, the non-performing

loanswereaccountablefor2.97percentoftotalloansand

interest receivables, increasing from 2.64 percent as of

31 December 2008. The non-performing loans could be

classifiedbytypesofbusinessasfollows:

LOAN CLASSIFICATION

DEBT BALANCE (MILLION BAHT)

PERCENT 2009 2008


PERCENT


PERCENT 2009 2008


PERCENT



Asof 31December2009,TBANKhadnocredit

risk fromnon-performing loans thatcollateraldidnot fully

cover the remaining loan amounts after deducting

provision for loan loss. Thiswasdue to the fact that 100

percentprovisionwasallocatedonsuchloansbytheBank

incompliancewiththeInternationalAccountingStandards

No.39(IAS39).

NON-PERFORMING LOANS CLASSIFIED BY BUSINESS TYPE

Agriculturalandmining 7 0.08 9 0.12

Manufacturingandcommerce 913 10.89 909 12.62

Realestateandconstruction 1,015 12.10 856 11.88

Publicutilitiesandservice 105 1.25 141 1.96

Housingloans 516 6.15 418 5.80

Hirepurchase 4,627 55.17 3,735 51.84

Others 1,204 14.36 1,137 15.78

Total loans and accrued interest receivables 8,387 100.00 7,205 100.00

NON-PERFORMING LOANS

Non-performingloans(NPLs) 8,387 7,205 1,182

Loansnotfullycoveredbycollateral 6,407 5,338 1,069

Provisionforloanloss 6,407 5,338 1,069

Loans not fully covered by collateral after loan loss provision - - -

2008 CHANGE 2009

(Unit:MillionBaht)

TROUBLED DEBT RESTRUCTURING

Numberofdebtors(accounts) 10,600 381

Outstandingprincipleandaccruedinterestreceivables 5,280 2,645

Loansnotfullycoveredbycollateral 1,964 883

Revaluationallowancefordebtrestructuring 33 20

Total loans and accrued interest receivables 282,859 273,228

Restructured debts to total loans (Percent) 1.87 0.97

2008 2009

(Unit:MillionBaht)

The risk on debt restructuring arises from the

re-entry of the substandard debtors, i.e. after the debt

restructuring, the debtors again default on their

repaymentsandhencere-enterthenon-performingstatus.

Theproblemposesadverseeffectsondebt-restructuring

performance of TBANK. As of 31 December 2009, the

outstandingprincipalandtheaccruedinterestreceivables

oftherestructureddebtamountedtoTHB5,280millionor

1.87 percent of total loans and interest receivables, an

increasefromTHB2,645millionasof31December2008.

The net restructured debt (less collateral) amounted to

THB1,964million.

BUSINESS TYPE DEBT BALANCE (MILLION BAHT)

PERCENT 2009 2008


PERCENT



1.3 RISK FROM COLLATERALS

For collateralized loans, TBANK carefully

assesses and classifies quality of each type of collateral

by taking into account the liquidity and overall risk. The

assessment result isoneof the important factorsapplied

in the risk classification of each credit exposure. In this

regard, thecollateral,both in the formof immovableand

movable whose value could be appraised, is subject to

appraisal or valuation complying with the BOT’s

regulations.

Inthepastyears,automobilehirepurchase

loansofTBANKhavecontinued toexpand.According to

the BOT notification regarding the valueless and non-

callableassetsdatedDecember2006,theregulationson

provisioning based on IAS39 whereby cars whose

ownershipbelongstotheBankcanbeusedascollateral.

In thecaseofdefault, theBank iseligible to immediately

repossessthecollateralforthepurposeofresellinginthe

usedcarmarket.Asaresult,TBANKmightbeexposedto

risk from the inability to repossess the cars or from

recoveringtheincurredlossbyresellingtheassets.Such

conditionsdependonvariousriskfactors,forinstance,the

conditions of the used car market and the repossessed

caritself.

1.4 RISK FROM GUARANTEES AND AVALS

Under thecurrentcustomerservice,TBANK

arealsoobligated in formsof avals, letter of credits, and

loan guarantees, which the Bank is held responsible for,

should thecustomersareunable to fulfill theirobligations.

In managing such risk, TBANK carefully scrutinizes

supporting information and applies strict approval

procedures to theseobligations. Theclosemonitoringon

these transactions is undertaken based on the same

guidelineusedforitsregularlendingprocedureoftheBank.

Asof31December2009,TBANK’sobligationsin

the form of avals and guarantees for loans amounted to

THB5,608million,or1.35percentofthetotalassets.

2. MARKETRISK

Themarketriskarisesfrommovementsininterest

rates, exchange rates, capital fund, and prices of

instrumentsinmoneymarketorcapitalmarket,whichmay

adverselyaffectearningsofTBANK.Themarket riskcan

be segmented into three categories including price risk,

interest rate riskandexchange rate risk.At this juncture,

TBANK’spoliciesaretocontrolandmanagetheserisksto

remainatanappropriatelevelandinlinewithitspolicyon

riskmanagement.

2.1 PRICE RISK

Price risk arises when the Bank’s earnings

orcapitalareadverselyaffectedbychanges in theprice

of debt and equity instruments, causing the value of

TBANK’s trading and available-for-sales investment

portfoliotodecline.

TBANK has developed risk measurement

toolsbasedon theValue-at-Risk(VaR)model toestimate

the maximum loss amount at a certain confidence level

andoveragivenassetholdingperiod.TheestimatedVaR

has thereforebeenusedasaguideline todetermine the

overall risk appetites of the Bank. The control and

monitoring of this type of risk is delegated to the

Investment Committee. In order to ensure the efficiency

andaccuracyof its tools for riskmeasurement, theBank

requires that the tools are subject to back-testing in

accordance with the Bank for International Settlement

(BIS)standards.Moreover,theBankhasconductedstress

testingby formulating stress scenarioswhich can create

extraordinary reduction in stock prices. The result of the

testcouldthereforeshedlightontheimpactontheBank’s

earningsandrequiredcapitalshouldsucheventoccurs.

Asof31December2009,TBANK’sinvestmentin

tradingandavailable-for-salesecuritiesclassifiedbytype

ofinvestmentwereasfollows:

Pediatric Cardiac Surgery Foundation

Donated fund to provide the timely cardiac surgery to the poor children with congenital heart disease to save their lives and help them to continue with their normal living.



Under the expectation that the Thaieconomic condition as well as the world economy haspassed its trough and the recovery is likely underway in2010, TBANK increased its investments in the long-termdomesticandforeigndebtinstrumentswithdecentratingswithemphasisonbondsissuedbygovernmentandstateenterprises as well as the securities with strongfundamentals. Such strategy, as a result, has raised thepriceriskoftheBanktobehigherthanthepreviousyear. 2.2 INTEREST RATE RISK TheinterestrateriskistheriskthatTBANK’searningsorcapital areadverselyaffectedbychanges ininterest rates that pose impact on its rate-sensitive itemsincluding assets, liabilities and off-balance sheet itemswhosere-pricingperiodsaremismatched.Thesechangesmay have a negative impact on net interest income oftheBank. It is the goal of TBANK to run its businessoperationsunderthesystemoflong-termeffectiveinterestrate risk management, in other words, to maintain anappropriate structure of assets and liabilities which arerate-sensitive at different time intervals. To ensuremaximum benefits, the Bank has developed the Interest

RateGapAnalysisModelasatool formeasuring interestrateriskbyassessing the impact thatmayarise fromthemismatchofthere-pricingperiodsofassets,liabilitiesandobligations at different time intervals. In order to ensurethat the riskof TBANK’sbusinessoperations iswithinanacceptable limit, the Bank has also established anacceptable risk ceiling and an early warning risk level,taking into account the structure of assets, liabilities andobligations as well as interest rate re-pricing which areexpected to take place in each period of TBANK’sbusiness plan. The Asset and Liability ManagementCommittee “ALCO” is responsible for monitoring andcontrolling such risk very closely. To effectively designappropriate measures to accommodate the risks, theCommittee has to monitor economic conditions,developments in the money market and capital market,andtheinterestratetrendwhichcouldbecomeimportantriskfactorstotheBank’srate-sensitiveitems. Details of financial assets and liabilities as of31 December 2009, classified by the period when theinterest rates would be re-priced in accordance withcontractsrelatedtoTBANK’sfinancialassetsandliabilitieswereasfollows:

Current investment

Tradinginvestment - -

Available-for-saleinvestment

Governmentandstateenterprisesecurities 11,572 1,977

Privatedebtsecurities 1,000 427

Foreigndebtsecurities 336 -

Total current investment 12,908 2,404

Long-term investment

Tradinginvestment

Governmentandstateenterprisesecurities 19,513 693

Privatedebtsecurities 4,758 2,838

Foreigndebtsecurities 5,667 -

DomesticmarketableequitySecurities

Listedsecurities 402 253

Unittrusts - 376

Total long-term investment 30,340 4,160

Total investment in trading and available-for-sale securities 43,248 6,564

2008 2009

Fair Value

(Unit:MillionBaht)



AT CALL

PERIOD OF INTEREST RATE REPRICING OR DUE DATE

(Unit:MillionBaht)

0-3 MONTHS 3-12 MONTHS 1-5 YEARS OVER 5 YEARS TOTAL NO INTEREST ITEMS

Based on the aforementioned structure of

financial assets and liabilities, TBANK’s net interest

incomeinthenextyearwoulddecreaseshouldthemarket

interest rate increase. This was mainly due to the

expansion of the Bank’s hire purchase business with

fixed-interest-ratefeature.

2.3 EXCHANGE RATE RISK

The exchange rate risk is a risk that

TBANK’searningsorcapitalcanbeadverselyaffectedby

exchange rate fluctuations, exchange rate exposures in

their possession of assets or liabilities or transactions in

foreigncurrencies.Theexchangerateriskcanbedivided

into Transaction Risk from foreign currency transactions

andTranslationRiskfromconvertingforeigncurrenciesto

localcurrency.

TheALCOisresponsibleformonitoringand

controllingthistypeofriskthroughtheconsiderationinthe

propermatchingbetweenthestructureandthematurityof

assetsandliabilitiesinforeigncurrencies.TBANK’spolicy

is to also rely on the VaR model as a risk measurement

tool todetermining the riskceiling in order to control the

impact of exchange rate movements on earnings and

capital.Nevertheless,inordertoavoidtheexchangerate

risk,TBANKhasalsoreliedonhedging instrumentssuch

asforwardcontracts.

Asof31December2009,TBANKwasfacedwith

relatively lowexchange rate riskasmostof theassets in

foreign currencies have been hedged by forward

contracts.

3. LIQUIDITYRISK

Liquidity risk arises from TBANK’s inability to

repay itsdebtsorhonor itsobligationsupon thedelivery

date due to the lack of its ability to convert assets into

cashortomobilizeadequatefundsortomobilizefundsat

anacceptablecost.ThiscouldadverselyaffecttheBank’s

currentand futureearningsandcapital. The liquidity risk

managementmechanismstartswiththeassessmentofthe

Bank’s cash flows and liquidity position over particular

time horizons when the different levels of funds may be

required to accommodate deposit withdrawal, reduce

othertypesoftheBank’sliabilities,orincreasetheBank’s

assets. The assessment applies tools such as Liquidity

Gap Analysis, various ratios on liquidity, as well as the

simulation under “what if” scenarios. Under different

scenarios, the impact on its liquidity adequacy will be

analyzed given the cash flow level corresponding to

customers’ behavior on the extension of contracts.

Additionally, theBankalsoestimatesdemandfor liquidity

undervariousassumptionsbasedoneconomicconditions

andextremeeventsthatmayaffecttheBankitselfandthe

overallbankingsystem.

Financial assets

Cash - - - - - 3,665 3,665

Interbankandmoneymarketitems 457 58,361 1,268 - - 3,909 63,995

Investments - 4,755 19,517 32,068 2,983 5,035 64,358

Loans 46,415 6,569 14,352 180,604 33,585 1,052 282,577

Total financial assets 46,872 69,685 35,137 212,672 36,568 13,661 414,595

Financial liabilities

Deposits 86,761 60,860 74,047 44,432 - 627 266,727

Interbankandmoneymarketitems 9,400 10,255 1,717 306 - 487 22,165

Liabilitiespayableondemand - - - - - 2,112 2,112

Borrowings - 58,673 17,263 15,000 - - 90,936

Total financial liabilities 96,161 129,788 93,027 59,738 - 3,226 381,940



At the same time, TBANK has prepared the

emergencyplaninordertomitigateanyliquidityshortage

and theplanwouldbe reviewedshould importantevents

affecting the planned operation occur. To control and

monitor this liquidity risk, the ALCO conducts a weekly

meeting to discuss the updates and appropriate risk

managementpolicies.

The structure of TBANK’s capital funding could

be classified by different type and maturity of source of

fundsasfollows:

Deposits 266,727 70.22 270,832 79.47

Domesticinterbankandmoneymarketitems 16,962 4.47 7,662 2.25

Foreigninterbankandmoneymarketitems 5,203 1.37 7 0.00

Borrowings 90,936 23.94 62,288 18.28

Total 379,828 100.00 340,789 100.00

2009 PERCENT 2008 PERCENT

(Unit:MillionBaht)

Lessthan1Year 319,537 84.13 325,015 95.37

Morethan1Year 60,291 15.87 15,774 4.63

Total 379,828 100.00 340,789 100.00

2009 PERCENT 2008 PERCENT

(Unit:MillionBaht)FUNDS CLASSIFIED BY MATURITY

Asof31December2009,TBANK’sdepositsand

borrowings amounted to THB 379,828 million where

sourcesoffundsweremostlyfromthepublicdepositswith

the maturity less than one year. This is considered a

commonstructureofthecommercialbanks.Nevertheless,

TBANK also issued bills of exchange and debentures

in order to increase the saving alternatives for their

customers.

The financial assets and liabilities as of

31 December 2009 classified by maturity date were

asfollows:

FUNDS CLASSIFIED BY SOURCE



As of 31 December 2009, TBANK’s liquidity,

consisting of cash and bank deposits, money market

lending, and investment in the government and state

enterprise bonds, increased from the previous year. This

accounted for 30.16 percent of total deposits, which

exceededtheBOT’sminimumliquidityrequirementof6.00

percentoftotaldeposits.Thisincreasewasmainlydueto

the Bank’s expansion of customer base from rising

numberofbranches.

4. OPERATIONALRISK

Theoperationalriskistheriskthatarisesfromthe

lackofappropriategovernanceofbusinessaffairsorlack

ofgoodgovernancewithintheorganization.Riskmayalso

arise from the inadequate efficiency of the internal audit

and internal control systems which could be relating to

internal operation processes, personnel, information

technology systems, or external events. Such risks can

pose adverse impact on earningsand capital as well as

thereputationandcredibilityofTBANK.

The increasingly intensified competition among

commercial banks and other financial institutions

providing similar financial services with the Bank in the

pastyear,togetherwiththerapidexpansioninthenumber

ofTBANK’sbranchesaswellastheimprovedefficiencyof

theBanktoprovidefullfinancialserviceswithinternational

standards has made TBANK acutely aware of the

probableoperationalrisk.Asaresult,TBANKhasplaced

equally emphasis on operational risks. TBANK has thus

established a number of measures to ensure adequate

and appropriate internal control systems in accordance

with thechange in transaction features. In order to allow

the internal work processes to be more flexible and

accommodative to the format of the Bank’s financial

service more effectively and control the risk under

the Bank’s acceptable limits, the following measures

havebeenbroughttoimplementation.

THE MATURITY DATE OF FINANCIAL INSTRUMENTS

(Unit:MillionBaht)

AT CALL LESS THAN 1 YEAR

MORE THAN 1 YEAR

TOTAL NOT SPECIFIED ITEMS

Financial assets

Cash 3,665 - - - 3,665

InterbankandmoneymarketItems 4,366 59,629 - - 63,995

Investments - 18,973 40,386 4,999 64,358

Loans 13,056 88,474 181,047 - 282,577

Total financial assets 21,087 167,076 221,433 4,999 414,595

Financial liabilities

Deposits 82,798 138,638 45,291 - 266,727

InterbankandmoneymarketItems 9,887 11,972 306 - 22,165

Liabilitiespayableondemand 2,112 - - - 2,112

Borrowings - 75,936 15,000 - 90,936

Total financial liabilities 94,797 226,546 60,597 - 381,940

Off-balance sheet items

Avalstobills 8 133 155 - 296

Liabilitiesunderunmaturedimportbills - 87 - - 87

Letterofcredits 54 887 69 - 1,010

Othercommitments 5,013 54,884 29,233 2,086 91,216

Total off-balance sheets 5,075 55,991 29,457 2,086 92,609



• Regarding the organization of the Bank’s

structure, TBANK has specified the roles, the scope of

duties and responsibilities for each position, based on a

systemofcheckandbalance.TheFrontOfficewhereall

the transactions takeplace is separated from theMiddle

OfficethatcomprisesoftheRiskControlDepartmentand

the Back Office that are responsible for supervising and

monitoringthetransactions.

• Establish the transaction-supporting units

which are independent and have expertise in their

respective fields of work such as computer and

informationsystemunit,legalunit,andpriceappraisalunit

inordertopreventanypossibleerrors.

• Put operational procedures and regulations

relatedtoalltypesoftransaction,staffmanualsaswellas

theauthority ranks forapproval inwritingsasaguideline

tosetthesamestandardsforallinternaloperationswithin

theorganization.

• Establish the Audit Committee and the Risk

Management Committee to control, monitor, and assess

the risks faced by TBANK. The Committees are held

responsible for examining and correcting the pitfalls in

order to create soundness and efficiency in the Bank’s

operation.

• Improve the management of the information

technology system and IT Security System in order to

enhance its potential to accommodate business

expansionandgaincreditabilityintheaspectofdataand

technology.Aparticularfocuswasgiventotheprevention

of damages from unauthorized access to the Bank’s

information.

• Specify procedures in selecting the

outsourcingservice,bothintheoperationandinformation

technology systems to minimize the operational risk,

enhance efficiency and creditability in the Bank’s

operation. These procedures have to also be subject

toregulationsofTBANKandrelatedauthorities.

• FormulatetheBusinessContinuityPlanwhich

consists of an emergency plan, a plan for backup

systems, and a business recovery plan to prevent

disruptioninbusinessoperation.Inaddition,thedrillsare

essential to test for the readiness and to consistently

improvetheplansforitseffectiveimplementation.

Regarding the risk measurement, the Bank

calculatesthecapitaladequacytoaccommodatethisrisk

based on the Basic Indicator Approach in accordance

with Basel II and the BOT notification. Furthermore,

inpreparationforthebusinessplanandstrictenforcement

of Basel II from the supervisory authority in the future

periods, TBANK has developed the database collecting

theinformationoflossdataincurredfromoperationtouse

as thedatabasetodeveloptoolsunder theStandardized

ApproachandAdvancedMeasurementApproach,which

aremoreaccurateinreflectingrisksassociatedwitheach

transaction.

5. RISK FROM INVESTMENTS IN SUBSIDIARIES AND

ASSOCIATEDCOMPANIES

This type of risk arises from losses and

bankruptcyofthesubsidiariesandassociatedcompanies

fromTBANK’sshareholdingorjointinvestmentsadversely

affecttheBank’searningsandcapital.

As of 31 December 2009, TBANK’s total

investmentsin itssubsidiariesandassociatedcompanies

amounted to THB 4,482 million, accounting for 6.93

percent of the Bank’s net investment. The largest share

was allocated in TNS, amounting to THB 1,858 million

whichaccountedfor41.45percentofthetotalinvestments

in subsidiaries and associated companies. The second

largest was in TLIFE, in which amounted to THB 936

million, representing 20.88 percent of the Bank’s total

investment.DetailsoftheBank’sinvestment(costmethod)

inTBANK’ssubsidiariesandassociatedcompaniesasof

31December2009wereasfollows:



6. STRATEGICRISK

This type of risk arises from the inappropriate

formulation of strategies, business planning and

implementation which are not compatible with internal

setupsandexternalenvironment, resulting inanadverse

impact on earnings, capital or the existence of TBANK.

Inmanagingthestrategicrisk,theformulationofstrategies

forTBANKwillbeconsideredoverthethreeyearsahead,

with the review required annually or in the case of an

external event that may impact the achievement of the

Bank’s business goals. The Executive Committee is

responsible for regular monitoring and evaluating the

performance of the work units upon the established

targetsstatedintheannualoperationplan.

7. REGULATORYRISK

The risk arises from amendments or changes in

regulations, laws or requirements of the authorities

especiallytheBOT.Changesintheauthority’spolicymay

affectTBANK’sstrategiesandbusinessoperations.

ThanachartSecuritiesPublicCompanyLimited 1,858

ThanachartInsuranceCompanyLimited 867

ThanachartLifeAssuranceCompanyLimited 936

ThanachartFundManagementCompanyLimited 97

ThanachartGroupLeasingCompanyLimited 400

Others 324

Total 4,482

(Unit:MillionBaht)

INVESTMENT VALUES IN SUBSIDIARIES AND ASSOCIATED COMPANIES (COST METHOD)

COMPANY’S NAME

In 2009, most changes in regulations and

requirements from the related authorities have

concentratedontheimprovementofmeasurestopromote

corporate governance of financial institutions, more

efficient risk management and improved consumer

protection.Thesemeasuresthereforeposednosignificant

impact on the Bank’s strategies and business operation.

And throughout, TBANK has constantly improved and

developed the internal operation system as well as

customer service standard. This has also been an

importantmissionfortheBankthatthebusinessoperation

hastoalsocomplywithauthorities’rulesandregulations.

8. RISKFROMCAPITALADEQUACY

As of 31 December 2009, TBANK’s capital

amounted to THB 38,557 million, of which THB 23,645

millionwasinTierIandTHB14,912millionwasinTierII.

TheBISratioamountedto14.10percentwhichexceeded

theBOT’sminimumrequirementat8.50percent.Thislevel

of capital should be sufficient in accommodating any

potential risks as well as the Bank’s future business

expansion.

INVESTMENT VALUE

Elderly Care Center: Nakhon Pathom

Staff members from the headquarters as well as Nakhon Pathom Hub joined together for the activities to donate funds for bed sheets and lunch to the elderly and also organize physical activities to give them moral support and relaxation.



CORPORATE GOVERNANCE

TBANK’S BUSINESS CONDUCTS ACCORDING TO

GOOD CORPORATE GOVERNANCE PRINCIPLES

IN 2009 INCLUDES:

1. SHAREHOLDERS’ RIGHTS AND EQUITABLETREATMENT

1.1 SHAREHOLDERS’BASICRIGHTS

TBANK has a policy on shareholders’ right

protection and encourages them to honor their rights.

Thepolicyincludeslegalbasicrights,suchascompany’s

profitsharing,sharetransactionsor transfers,participation

inshareholder’smeetinginordertohonortheirvotingrights

equitablyandindependently.

1.2 SHAREHOLDERS’MEETING

In 2009, TBANK held the Annual General

Meeting of Shareholders on Tuesday, 28 April 2009.

The meeting was conducted according to laws,

regulations, and coporate governance guidelines as

follows:

PRIOR TO THE SHAREHOLDERS’ MEETING

• The Bank published the Notice of

shareholders’ meeting as well as related documents in

both Thai and English, including meeting agendas, and

completedetailsofeachagendawhichweresufficientfor

shareholders’ decision making before the meeting.

The forthmentioned informationwas available via various

channelsasthefollowings:

TBANK’SINTERNETWEBSITE

(www.thanachartbank.co.th)

The information was published on the

website21dayspriortothemeetingandcomposesofthe

Notice of shareholders’ meeting and related information,

REPORT ON CORPORATE GOVERNANCE

COMPLIANCE

CORPORATE GOVERNANCE POLICY, BUSINESSETHICS AND CODES OF CONDUCT FORDIRECTORS,EXECUTIVES,ANDSTAFF

Thanachart Bank Public Company Limited’s

(TBANK) Board of Directors has put in place written

policy guidelines on corporate governance since 2003.

The Board also conducts an annual review on corporate

governance policies and the reporting process on

business compliance with corporate governance

principles of TBANK, at least once per annum.

The business ethics as well as code of conduct for

directors, executives, and staff have been improved in

ordertoestablishaframeworkforallpersonnelintheBank.

TBANK has established coporate governance

policyaswellasbusinessethicsandcodesofconductfor

directors, executives, and staff. The policy can be easily

accessedviaThanachartGroup’sintranetsystemwhichis

intended to be a channel for communicating with staff

at every level, so that they can acknowledge a firm

standpoint and principle in good corporate governance

establishedandpracticedbytheBoardofDirectors.

Moreover, Thanachart Group has continuously

supportedgoodgovernnaceandrecognitiononcorporate

socialresponsibilityawareness(CG&CSRProject)ofstaff

in the group. Thanachart Group also designed training

courses that focus particularly on encouraging staff to

workonthebasisofmoral,ethics,andbusinesscodesof

conduct, for example, pure-hearted businessman

program,innerpowerprogram.In2009,therewas3,950

staffattendingtrainingcourses.



including date, time, and meeting vanue, meeting rules,

vote casting procedures, as well as proxy statement.

Thisinformationreplicatedthedocumentsmailedtoeach

shareholder.

DELIVEREDBYMAIL

MeetingNotice,meetingdocuments,and

annualreportweredeliveredtoallshareholdersatleast14

dayspriortothemeeting.

NEWSPAPERADVERTISEMENT

Meeting Notice was advertised in both

Thai and English in daily newspapers for three

consecutivedays,sixdayspriortothemeetingday.

• TBANK also provided opportunity to the

Bank’s shareholders to raise issues for consideration as

additional item of the meeting agenda. They could

nominate the candidate for director as well as any other

business-relatedissuesamonthpriortothemeetingday,

from 29 December 2008 until 27 January 2009. The

informationprovidedtoshareholdershastobeinThaiand

English in order to accommodate both Thai and foreign

shareholders.Inaddition,rules,procedures,andchannels

for raising such issues were available on the Bank’s

website and the results will be informed at the

shareholders’meeting.

• The proxy statement was delivered with

the meeting Notice and also published on the Bank’s

website in case of the need of shareholders to request

aproxytoattendthemeetingontheirbehalf.

• TBANK proposed a candidate for Chief

Executive Officer and an Independent Director and their

curriculumvitaeaswellasstakesofindependentdirectors

in the meeting Notice to provide the shareholders

alternativesforappointmentofproxy.

THE DAY OF ANNUAL GENERAL MEETING

OF SHAREHOLDERS 2009

• TBANK arranged various facilities, such

asmeetingvenue,receptionstaffaswellasprintedballot

papers for each agenda item, for shareholders’

convenience during the registration. Moreover, the

shareholder could also register in advance within two

hourspriortothemeetingtime.

• TBANKestablishedshareholder’smeeting

guideline toensure that shareholders’ rightwouldnotbe

compromised. At any point of the meeting, shareholders

couldregisterandenterthemeetingtohonortheirvoting

rightsontheagendasofwhichvotecastinghadnotbeen

made.TBANKhasneveradjustedoraddedtheagendas

ordistributedadditionaldocumentswhichcontainmaterial

information during the meeting without prior notice.

During the course of the meeting, all the shareholders

were provided equitable right to express their opinions

andaskquestions.

• There were 16 shareholders and 48

shareholder’sproxiesattendedthemeeting.

• All Directors attended the meeting,

including theChairman, theChiefExecutiveOfficer, the

Chairman of the Audit Committee, the Chairman of the

NominationandRemunerationCommittee.

• The Chairman of the meeting explicitly

informedtheshareholdersonmeetingrules,votecasting,

andvotecountingprocedures.

• In casting votes, the ballot papers were

required for every agenda item as well as during the

agenda of Individual Director voting. The ballot papers

werecollectedfromshareholdersforvotecounting.

• Video presentations were used in the

meeting inorder toaffirmthatall informationwereclearly

presented.

POST ANNUAL GENERAL MEETING OF

SHAREHOLDERS

• The Bank took minutes of the meeting

whereby all important information was entirely recorded.

Thedraftedminutesof the2009AnnualGeneralMeeting

of Shareholders has been submitted to the Stock

Exchange of Thailand (SET) and also made available on

TBANK’swebsitewithin14daysafterthemeetingday.

1.3 CONTROLLING MEASURES ON THE USE

OFINTERNALDATA

TBANKhasspecifiedthecontrollingmeasures

of theuseof internaldata in theBank’sCodesofConduct

whichcanbesummarizedasfollows:

• An appropriate oversight on the internal

datamaintainancesystemisrequiredforallbusinessunits

withintheBank.



• In compliance with the Securities and

Exchange Commission (SEC) regulations, executives in

manager position, the next four positions below the

manager, and the highest ranking position in the

accounting department are required to report their

holdings of the Bank’s shares on the quarterly basis.

Moreover, any trading transactions of aforementioned

shares have to be reported to the SEC within three

businessdaysoncethetransactionhasbeencompleted,

whilethecopyofthetransactionshavetobesubmittedto

theOfficeofChiefExecutiveOfficer.

• Directors, executives, staffs, employees,

and advisors who have access to the confidential

information are prohibited from seeking any benefit from

suchinformationfortheirownorother’sinterest.

• Theuseof internaldata for the individual

interest isconsideredasapolicymisconductandwillbe

subject to the penalty according to judgement of the

DisciplinaryCommittee.

1.4 CONTROLLINGMEASURESONCONFLICT

OFINTERESTS

TBANK has established and documented

policiesandapprovalproceduresonrelated transactions

to be fully disclosed to all related parties. The Bank has

also established policies and measures aiming at

preventing executives and related parties from making

use of internal information for personal interest.

Thepoliciesareasfollows:

• Incaseofaconflict-of-interest, related,or

affiliated transaction between any related parties, the

matterwillbereportedtotheComplianceUnit forseeking

theiropiniononlegalissuesandpracticeguidelinesbefore

beingforwardedtotheauthorizedpartyforapproval.

• As stated in the notification of various

committees, any transactions from which the director,

executive or related parties gain benefit are required to

specify the interestofsuch transaction. Inaddition, related

directororexecutiveisprohibitedfromattendingthemeeting

duringthetimewhentheagendaitemarebeingconducted.

• Theexecutionof transactions fromwhich

TBANKordirectororseniormanagementoftheBankgain

benefit has to seek the unanimous approval from the

Board of Directors in which neither director nor senior

managementwho is beneficial from the transactionscan

participateintheapprovalprocess.

• The Board of Directors has to be fully

informedoftransactionsthatmayinvolveintheconflictsof

interest or related party issues and is always subject to

acarefulconsiderationand incompliancewith rulesand

regulationsoftheSET,theSEC,andtheBankofThailand

(BOT)

• Information disclosure on transactions

which may have conflicts of interest or connected

transactions or affiliated transactions is complied with

rulesandregulationsestablishedbytheauthorities.

• All related transactions are subject to

areviewinaccordancewiththeannualauditplanandwill

bereportedtotheAuditCommittee.

• Theinformationaboutbusinessconnection

orbusinessofwhichthebenefitisrelatedtodirectorsand

senior management has to be disclosed quarterly for

controlling purposes and to be the list of related

transactions which will be disclosed in the notes to the

financialstatements.

2. ROLEOFSTAKEHOLDERS Thanachart Group has established written

practice guideline on stakeholders; including customers,

trading partners/lenders, competitors, public sector

aswellassocietyandenvironment,inbusinessCodesof

Conduct of directors, executives, and staffs. All the

information in the guideline is disseminated through the

Bank’s internal communication channels, so that the

directors, executives, and staffs at all levels can strictly

adhere to. The information has also been publicized via

TCAP’s website to enhance stakeholders’ confidence on

theirrights.Thedetailsonthetreatmentofvariousgroups

ofstakeholderareasfollows:

SHAREHOLDERS

Thanachart Group aims at having a solid

performanceandachievingasustainablegrowthaswellas

being competitive to ensure an appropriate return to

shareholdersona regularbasis. In conductingbusiness,

theBankhasbeenawareof risksandensures that there is

theefficient internal control systemaswell as information

disclosure inanaccurate,complete, timelyand transparent

manner. Moreover, the Bank has made arrangements to

providetheshareholderswithconvenienceinexercisingany

oftherightstheyareentitledto.



EMPLOYEES ThanachartGroupemphasizesonequal and fairtreatments to its employees, aswell asensures that theyare appropriately compensated. As a guideline indeterminingemplyees’salaries,theBankconductssurveysand takes intoconsideration inflation rates, theconsumerprice index, and the Key Performance Indicators (KPIs).In2009, theBank introduced theperformanceevaluationform, which is consistent with Thanachart Group’s keybusiness strategies or the CEO’s Six-point agenda, toassess employee’s performance for the purpose of faircompensation and promotion. Moreover, the Bank alsoprovidesmany fringebenefits for theemployee, includingmedical expense, annual leave, provident fund, savingcooperatives for Thanachart Group’s staff, fire drills,upkeepofworkplaceenvironment, aswell as security forlife and belongings. TBANK also strengthens workingrelationships among employees by publishing andcirculating the monthly journal entitled “Tor Saiyai” thatprovidesbetterconnectionsbetweenemployeeswithinthegroup. In addition, via the intranet system, theBankalsocirculatesnewsandinformationaboutThanachartGroup’sproducts and services, related external rules andregulations,aswellasactivitiesoftheGroup. ThanachartGrouphasbeenconstantly active inhuman resource development. In 2009, Thanachartfocuses on enhancing knowledge and competenciesas well as necessary working skills for each position atevery staff level in order to increase employee’s workingefficiency and ability to respond to Thanachart Group’svisions,missions,andobjectives.Moreover,theBankalsostrengthened employees’ recognition of rules andregulations of the authorities as well as the businessCodes of Conduct by establishing the human resourcedevelopment plan that is consistant with strategic andbusinessplan of Thanachart Group. In order to keep upwith the pace of business growth and expansion, theGrouporganizedeffectivetrainingcoursesforemployeesundertheadviceandknowledgesupportfromScotiabankthathasexpertiseininternationalfinance,externaltrainingand seminar, as well as staff visit at reputable domesticandforeigninstitutes. In 2009, Thanachart Group organized the thirdyear “Go Together” project under “A Year of Customer-Centric Creating a Culture of Collaboration” scheme,totally,13projects. Suchprojectaimedatstrengtheningtheunityof theorganizationwhereby theChiefExecutive

Officer as well as high-level executives of TBANK paidvisits to all the hubs nationwide to meet with managersand staff of the network branches in order to infrom theGroup’s strategic directions as well as policies that areconsistent with business operations. This would helpenhancing unity and cooperation among staff within theorganization as they are the key driving force ofThanachart Group. Moreover, the project is still beingorganizedin2010underthe“GrowTogether”scheme.

CUSTOMERS Thanachart Group is determined to developfinancial products and services that couldaccommodateall financial needs of the customers. Fees are fairlychargedandtheBankaimstoprovidethecustomerswithcomplete and sufficient information of products andservicesbeforethecustomers’decisionisreached. PARTICIPATIONMECHANISMOFSTAKEHOLDERS ThanachartGrouphasdevelopedthesystemforreceiving complaints and suggestions from customers,externalparties,andstakeholdersmoreeffectivelyfor thepurpose of organizational development. This has beenundertaken throughvariouschannels suchas theBank’swebsite (www.thanachartbank.co.th),marketingstaff,andThanachart Contact Center (1770). TBANK has alsoexplicitly established the business practice for thecomplaintsreceptionsysteminwhichtheresponsibleunitwill follow up the customers’ complaints and providefeedback to every customer or party that lodges thecomplaint as well as report to the Board of Directors ona monthly basis. This aims at improving the Group’sservices; fulfilling customer’s needs; and increasingconsumerorstakeholder’ssatisfaction. TRADINGPARTNERSANDLENDERS Thanachart Group has established explicitpoliciesandpracticesonpurchasingandoutsourcing forthepurposeoffairness,transparency,andverifiabilityofallrelatedpartiesaswellastherulesonapprovalauthorityofpackagepurchasingandrental. TheBankhasprovidedtransparentandverifiableinformation to lendersandhasattached to the integrityoffulfilling the obligations made with the lenders under theconditions thataremutuallyagreeduponaswell as legalrules and regulations in order to build confidence for

long-termcooperation.



COMPETITORS

TBANK operates under rules and competitions

withotherpartiesor organizationsaswell asunder fairly

established policies and practices. The Bank recognizes

the importanceofgoodcustomsand traditionaswell as

laws and rules for the purpose of maintaining and

rehabilitatingthesocietyandtheenvironment.

SOCIETYANDENVIRONMENT

Thanachart Group has taken a responsible

attitude towards society. The senior management of the

Group has played an important role in promoting the

principles of social responsibility. These principles fall

under the umbrella of the Group’s corporate social

responsibility(CSR)thatplacesemphasison“sustainable

growth with moral righteousness”. Supported by its staff,

business alliances, local communities and society, the

Group is prepared to consistentlyparticipate in activities

thatsupportandhelplocalcommunitiesandsocietiesina

longtermmannerwithunderstandingandsincerity.

PUBLICSECTOR

TBANK conducts its business in adherence to

lawsandrulesandregulationsoftheauthoritiesaswellas

provides effective cooperation according to government

policies. Moreover, the Bank will not involve or do

businesswithanyillegalorganizationsorindividuals.

3. INFORMATIONDISCLOSUREANDTRANSPARENCY TBANK’sBoardofDirectorsisresponsibleforthe

financial statements of the Bank. In this regard, it has

assignedtheAuditCommitteetoensurethatthefinancial

reports and internal control system of the Bank are

accurate and valid in accordance with the accounting

standards in Thailand. TBANK has also included

theReportoftheAuditCommitteeintheAnnualReport.

TBANKensuressufficientdisclosureofimportant

informationinthenotestotheBank’sfinancialstatements.

TheBankalsodiscloses the financialstatementsand the

notes to the financial statements on the quarterly and

annuallybasisontheBank’swebsite.Moreover,Investor

Relations unit is responsible for providing an accurate

information and news on a timely manner to Thai and

foreignshareholders,investors,analysts,andcreditrating

agencies in order to strengthen image and credibility of

theBankaswellasprovideservices to theshareholders

effectively. The Investor Relations unit can be contacted

viatelephoneat026136107and022178199Ext.3027

or at E-mail address: [email protected]. TBANK has

establishedpoliciesoninformationdisclosureinwhichthe

information has to be accurate, complete, equitable,

transparent,andtimelyaswellascomplywithrelatedlaws

and regulations. The information is disclosed via the

channelsasthefollowings:

1. StockExchangeofThailand

- AnnualRegistrationStatementForm56-1

- FinancialStatementandAnnualReport

- Shareholders’meetingresolutions

2. SecuritiesandExchangeCommission

3. DepartmentofBusinessDevelopment,

MinistryofCommerce

4. TBANK’swebsite

www.thanachartbank.co.th

5. Press,Media,andOthermedias

6. Analystmeeting

7. Companyvisit/One-on-onemeeting

8. Roadshow

9. Newsletter

In 2009, the Bank’s senior management and

InvestorRelationspaidavisitandprovidedinformationto

relatedpartiesinvariousoccasions,includingOne-on-one

meeting, Conference call, Group analyst meeting, and

Roadshow.

4. RESPONSIBILIT IES OF THE BOARD OFDIRECTORS

CONSTITUENTOFTHEBOARDOFDIRECTORS

TBANK’sBoardofDirectors iscomposedofwell

qualifiedpersonswhohaveexpertise,skill,andexperience

infinance,accounting,managementandotherprofessional

areaswhichprovidesTBANKwithgreatbenefits.

The Bank’s Board of Directors structure is

complied with the notification of the Securities and

Exchange Commission no. ThorChor 28/2008 Re:

Application for Offer and Permission for Sale of Newly

IssuedSecurities,dated15December2008andtheBank

of Thailand’s notification Re: Governance of Financial

Institutions,dated9July2009.



INDEPENDENT DIRECTOR TBANK speficies a more

stringent definition and qualification of the independent

directorasfollows:

(1) Holdingsharesnotmorethan0.5percentof

paid-up capital of the Bank, affiliated

company, associated company or related

company,includingsharesheldbypersons

relatedtotheindependentdirector.

(2) Nottakingpartinthemanagementorbeing

anemployee, staff,oradvisorwho receives

salary, or a controlling person of the Bank,

a regular salary from the Bank, member

company of the Group, affiliated company,

associatedcompany, relatedcompanyor a

personwhohasauthoritycontrollingajuristic

person that may have a conflict of interest

(atpresentandduringthepasttwoyears).

(3) Not havinga business relationshipwith the

Bank, Member Company of the Group,

affiliated company, subsidiary company or

juristic person that may have a conflict of

interest that obstructs the independent

opinion.

(4) Not being a person related by blood or

registration under laws such as father,

mother, sibling and child, including spouse

of children, executives,major shareholders,

controlling persons, or persons to be

nominated as executive or controlling

personoftheBank,membercompanyofthe

Group, affiliated company, subsidiary

companyorrelatedcompany.

(5) Neither having a relationship with the Bank

in the form of its professional service

provider such as auditor and financial

advisor nor having a business association

withtheBankundersignificantcashamount

or value as stipulated (at present or during

thepasttwoyearsbeforetheappointment).

(6) Not being a representative of any member

of the Bank’s Board of Directors or any

majorshareholder.Norbeingashareholder

relatedtothemajorshareholders.

(7) Notbeingsimultaneouslyanauditcommittee

memberofanylistedcompanyoftheGroup,

associatedcompanyorsubsidiarycompany.

(8) Nothavinganyprohibitedcharacteristicthat

undermines independence in carrying out

hisorherdutiesasdirector.

EveryIndependentDirectorsareindependent

to express opinion without interest in benefit in terms of

assetsorworkingposition;fromthepressureofanyperson

oranygroupofpeopleaswellas fromanycircumstances

thatcouldaffecttheiropinionexpression.

EXECUTIVE DIRECTOR is defined as

1) Directorswhoinvolveinthemanagementof

the Bank in accordance with the Notification of the

SecuritiesandExchangeCommissionno.ThorChor28/2008

Re:ApplicationforOfferandPermissionforSaleofNewly

Issued Securities, dated 15 December 2008, including

any additional amendments or announced substitution

whichmeansDirectorwhoassumethedirectorshipinthe

Executiveposition,DirectorwhoactastheExecutive;and

as Director with full signatory authority except the case

when it can be demonstrated that it is the authorized

signatoriesaccordingtothelistthattheBoardofDirector

has already approved and it is the joint authorized

signatorieswithothercommittees.

2) In accordance with the BOT’s Notification

no. SorNorSor 13/2009 Re: Governance of Financial

Institutions,ExecutiveDirectorisdefinedas:

(1) Director with a responsibility in theposition

of manager, deputy manager, assistant

managerorequivalence.

(2) Directorwitharesponsibilityintheoperation

or involve in business management as

executive, including a party in executive

committee.

(3) Directorwith full signatoryauthority, except

forthecasewhencanbedemonstratedthat

it is the authorized signatories according

to the list that the Board of Director has

already approved and it is the joint

authorizedsignatorieswithothercommittees.



At present, the number of Independent Directors and Non-Executive Directors of TBANK is accounted for 50

percentofthetotalnumberofBoardofDirectors.TheconstituentoftheBank’sBoardofDirectorsasof31December2009

wasasthefollowing:

TENUREOFDIRECTORSHIP

The tenure of directorship of the Board of

Directorshasbeen statedclearlybyTBANK’sArticlesof

Association. At each Annual General Meeting of

ShareholdersofTBANK,onethird(ornearestnumberbut

donotexceedonethird)of themembersof theBoardof

Directorsmustretire.AfterthedatewhenTBANK’sArticles

of Association has been effective, the retirement of

Directorsinyearoneandyeartwoisdecidedbyadraw.

In the subsequent years, the Director who holds the

longest time inofficewillberetired. Should therebe the

casewhenthenumberofDirectorswhoholdsthelongest

time inoffice isgreater than thenumberofDirectors that

havetoberetired, thedrawwillbeapplied.Directorwho

retiresdue to this reasoncanbe reelected to re-assume

thedirectorship.

ROLESANDRESPONSIBILITIESOFTBANK’SBOARDOF

DIRECTORS

TBANK’sBoardofDirectors isaccountable toall

theBank’sshareholdersandparticipatesinthegovernance

of the Bank’s business affairs in an independent and

neutral manner, taking into consideration the interests of

the shareholders and other stakeholders. The roles and

responsibilitiesoftheBoardofDirectorsareasfollows:

1.TheBoard is responsible theoverallbusiness

conducts of TBANK to ensure the compliance with legal

requirements, the Bank’s objectives and Articles of

Association, as well as the resolutions adopted at the

shareholders’meetings.

2.TheBoardappointstheExecutiveCommitteeor

Sub-CommitteestoperformdutiesasassignedbytheBoard.

3.TheBoardmayassignorauthorizeoneormore

directorsorotherpersonsto takeanyactiononbehalfof

theBoard.

4.TheBoardmakesapprovalonvisions,missions,

andvaluesoftheBankaswellasthebusinessethics.

5. TheBoardconsiders the strategiesproposed

by the management and makes approval on important

issues related to the Bank’s direction and policies. The

Board also makes approval on business plans, budgets,

andoperationalgoalsproposedbythemanagement.

Notes: TBANK’s authorized signatories include Mr. Banterng Tantivit, Mr. Suphadej Poonpipat, Ms. Suvarnapha Suvarnaprathip, Mr. Brendan King, and Mr.KobsakDuangdee.AnytwooutofthefiveauthorizedsignatoriescanjointlysignwithTBANK’ssealaffixed.Mr.PanupanTuangthongwasActing SecretaryoftheBoard. 1. Mr.SuvitArunanondchaiandMr.VichitYarnamornresignedtheirdirectorshipofTBANKon23Febuary2009 2. Assoc.Prof.Dr.SomjaiPhagaphasvivathanahasassumedhisdirectorshipsince26March2009 3. Mr.KobsakDuangdeehasassumedhisdirectorshipsince1April2009 4. Mr.SomjateMoosirilerthasassumedhisdirectorshipsince29October2009 5. Mr.MartinWeekshasassumedhisdirectorshipsince24December2009

1. Mr.Banterng Tantivit Chairman - - 2. Mr.Suphadej Poonpipat ViceChairman - - 3. Mrs.Michele Kwok ViceChairperson - - 4. Mr.Kiettisak Meecharoen Director - - 5. Mr.Narong Chivangkur Director - - 6. Mr.Sathaporn Jinachitra Director - - 7. Assoc.Prof.Dr.SomjaiPhagaphasvivathana Director - - 8. Ms.Suvarnapha Suvarnaprathip Director - - 9. Mr.Brendan King Director - - 10. Mr.Somjate Moosirilert Director - - 11. Mr.Kobsak Duangdee Director - - 12. Mr.Martin Weeks Director - -

NAME POSITION EXECUTIVE DIRECTOR

NON-EXECUTIVE DIRECTOR

INDEPENDENT DIRECTOR



6. The Board monitors the Bank’s performance

and progress achieved in relation to the established

objectivesaswellasthecompliancewiththerelatedlaws,

regulationsandpolicies.

7. The Board authorizes the Chief Executive

OfficertoconductbusinessmanagementofTBANKwithin

the framework of the capital expenditure budgets and

operating expenditure budgets approved for various

projects. Moreover, the Bank’s Board of Directors shall

approve any loan applications which are beyond the

authorityoncreditapproval.

8. The Board ensures that the Bank has the

effective internal control system and appropriate risk

managementsystem.

9. The Board ensures that both internal and

externalauditorconducttheirdutieseffectively.

10. The Board approves the quarter and annual

financial statements and ensures that the financial

statements have been prepared in accordance with the

accountingprinciples.

11. The Board ensures that the information is

disseminatedtotheBank’sstakeholdersandgeneralpublic.

SEGREGATIONOFDUTIES

TheChairmanof theBoardofDirectorsshallnot

bethesamepersonastheChiefExecutiveOfficersoasto

segregate the duties of developing policies from day-to-

daybusinessmanagement.

ASSUMPTION OF D IRECTORSHIP IN OTHER

COMPANIESBYDIRECTORSANDSENIOREXECUTIVES

In compliance with the BOT’s Notification on

GovernanceofFinancial Institutions,Directorsandsenior

executives of the Bank can assume the position of

Chairman,ExecutiveDirectororDirectorwithfullsignatory

authorityinnomorethanthreebusinessgroups.

SUB-COMMITTEES

TheBoardofDirectorsofTBANKhasappointed

the sub-committees to be responsible for performing

necessary duties. The roles and responsibilities of each

sub-committeeareasfollows:

EXECUTIVE COMMITTEES

TBANK’s Board of Directors has appointed the

ExecutiveCommitteewhichconsistsofsixmembers.Asof

31 December 2009, the names of the member of the

ExecutiveCommitteewereasfollows:

1. Mr.Suphadej Poonpipat

ChairmanoftheExecutiveCommittee

2. Ms.Suvarnapha Suvarnaprathip

ViceChairpersonoftheExecutiveCommittee

3. Mr.Brendan King

ViceChairmanoftheExecutiveCommittee

4. Mr.Somjate Moosirilert

MemberoftheExecutiveCommittee

5. Mr.Martin Weeks


6. Mr.Kobsak Duangdee


Mr.Panupan Tuangthong

ActingasSecretaryoftheExecutiveCommittee

ROLES AND RESPONSIBILITIES OF THE

EXECUTIVECOMMITTEE

1. Authorized to approve lines of credit for the

benefitofTBANKaswellasapprovingdebtrestructuring

incompliancewiththeCommercialBankingActaswellas

therulesandregulationsoftheBOT.

2. Authorized to approve investments aimed at

generating earnings for TBANK in compliance with the

Commercial Banking Act as well as the rules and

regulationsoftheBOT.

3. To manage business operations in line with

TBANK’s business objectives as well as managing

liquidity,risksandtheinterestratestructure.

4.Authorizedtomakepurchases,taketransfers,

and dispose of TBANK’s assets in an amount up to 5

percentofTBANK’ssharecapital.

5. To consider and screen matters which are

beyond the authority of the Executive Committee, and to

present them to those having higher authority for

consideration.

6. Authorized to restructure and manage the

organization, toestablish rulesand regulations related to

work process, to appoint and remove employees, to

appoint advisers, as well as directing and governing the

conductofTBANK’sbusinessaffairs.

7. Authorized to approve salaries or other

compensation benefits for employees and advisers to

supportTBANK’snormalbusinessoperations.

8. To consider and approve appointments of

independentappraisers.



9. To establish expense budgets for collateral

appraisalitemsaswellascontrollingtherelatedexpenses.

10.Authorized to delegate its authority to other

staffofTBANKforthepurposeofefficiency.

The Executive Committee is authorized to

approve lines of credit, investments, and obligations in

compliancewiththerequirementsimposedbytheBOT.

AUDIT COMMITTEE

TBANK’s Board of Directors approved the

establishment of the Audit Committee to ensure that

TBANK’s business management is efficient and adhere

to the principles of good corporate governance, which

would help fostering the Bank’s credibility in the eyes of

general public and compliance to the authorities’ policy.

The Audit Committee consists of three directors, all of

whom are Independent Director. All of them has

knowledge,understanding,andexperienceinaccounting

and/or finance. As of 31 December 2009, the names of

themembersoftheAuditCommitteewereasfollows:

1. Mr.Kiettisak Meecharoen

ChairmanoftheAuditCommittee

2. Mr.Sathaporn Jinachitra

MemberoftheAuditCommittee

3. Assoc.Prof.Dr.Somjai

Phagaphasvivathana

MemberoftheAuditCommittee

Mr.Chatchawal Jantararuangtong

SecretaryoftheAuditCommittee

Mr.Chusak Patcharapongsak

AssistantSecretaryoftheAuditCommittee

ROLESANDRESPONSIBILITIESOFTHE AUDIT

COMMITTEE

1. To review the process related to the

preparation and information disclosure of TBANK’s

financialreports,ensuringthattheinformationisaccurate,

complete,andreliable.Duringthereviewingprocess, the

Audit Committee will cooperate with the external auditor

and the executives responsible for preparing both

quarterlyandyearlyfinancialreports.

2. Toreviewtheefficiencyandappropriateness

of the internal control system, internal audits, and

oversight. In this regard, the Audit Committee will

cooperatewiththeexternalauditors,internalauditors,and

therespectiveauthorities.

3. ToreviewTBANK’sriskmanagement,ensuring

that it is adequate and comply with the Bank’s policy as

wellastheBOT’sguidelines.

4. Toreviewevidencesfrominternalinvestigations

whenthereisanobservationorinferencethattheremight

be a fraud, irregularities or substantial loopholes in the

Bank’s internal control system. The Committee will then

make a report to TBANK’s Board of Directors for further

consideration.

5. Toreviewrelatedpartytransactionsaswellas

transactions which may lead to conflicts of interest,

ensuringthattheyareexecutedcorrectlyandaccurately.

6. To review the Bank’s business conducts,

ensuring that they are in compliance with the rules and

regulationsoftherespectiveauthorities.

7. To cons ide r the aud i t repor t s and

recommendationspresented by the external auditor and

internalauditorandtomonitortheactionstakenaccording

totherecommendations.

8. To recruit and nominate candidates for the

external auditor of TBANK and also to consider the

auditing fees, taking intoaccount theauditor’scredibility,

the adequacy of its resources, workload of the auditor

as well as experience of the staff assigned to audit the

Bank’saccounts.

9. To approve for the appointment, evaluation,

removal, transfer ordismissal of theHeadof the Internal

AuditGroup.

10.To ensure that the business conducts of the

subsidiaries are in compliance with Thanachart Group’s

policies. The Internal Audit Group has been given the

followingassignments:

10.1 To acknowledge TBANK’s Audit

Committee on the summary of the overall performance

of the Internal Audit Group which is responsible for

auditingtheBank’ssubsidiaries.

10.2 To acknowledge TCAP’s Board of

Directors on the summary of the overall performance of

the InternalAuditGroupwhich is responsible forauditing

TBANKanditssubsidiaries.

10.3 In undertaking the auditing duties

specified in 10.1 and 10.2, in case that there are key

issuessuchasviolationoflaw,fraud,ormattersthathave

a serious impact on the financial statements, status or

image of TBANK and its subsidiaries, the Internal Audit

Groupisrequiredtoreportindetails.



11. To hold meetings with Audit Committees of

each company in Thanachart Group occasionally as

deemednecessary.

12. To perform any other duties assigned by

TBANK’sBoardofDirectorsorincompliancewiththeSET

orotherrespectivelegalrequirements.

NOMINATION AND REMUNERATION COMMITTEE

TBANK’s Board of Directors approved the

establishment of the Nomination and Remuneration

Committee.Asof31December2009,theNominationand

RemunerationCommitteeconsistedofthefollowings:

1. Mr.Narong Chivangkur

ChairmanoftheNomination

andRemunerationCommittee

(IndependentDirector)

2. Mr.Sathaporn Jinachitra

MemberoftheNomination


(IndependentDirector)

Mr.Panupan Tuangthong

ActingasSecretaryoftheNomination


Note: In meeting no. 1/2010 on 15 January 2010, TBANK’s Board of Directors agreed to appoint Mrs. Michele Kwok to be the new memberoftheNominationandRemunerationCommitteeinsteadof Mr.BrendanKing.


NOMINATIONANDREMUNERATIONCOMMITTEE

1. To establish guidelines and procedures for

nominating candidates for the positions of Director and

Chief Executive Officer in case the positions become

vacant.

2. To select and examine the candidates with

appropriate qualifications for appointment as Director

or Chief Executive Officer. To propose the qualified

candidates to the Bank’s Board of Directors for

consideration.

3. To ensure that the size and constituent of

TBANK’s Board of Directors are appropriate to the

organizationandto thechangingenvironment.TheBoard

of Directors consists of members with appropriate

knowledge, competency, and experience in different

fields.

4. To establish a structure of remuneration

packagesand fringebenefits forDirectorsandExecutive

President.And topropose theremuneratepackagesand

fringe benefits to TBANK’s Board of Directors for

considerationandapproval.

5. To ensure that the remuneration packages

and fringe benefits for directors and Chief Executive

Officerareappropriateandconsistent to their respective

duties and level of responsibility and propose to the

TBANK’sBoardofDirectorsortheshareholders’meetings

forapproval,dependingonthecase.

RISK MANAGEMENT COMMITTEE

TheBoardofDirectorsofTBANKhasestablished

theRiskManagementCommittee toensure that risksare

effectively and appropriately managed and consistently

withtheBank’sorganizationalstructure.Asof25January

2010, the members of the Risk Management Committee

wereasfollows:


Chairman


ViceChairman

3. Mr.Terry Watkins

Member

4. Mrs.Noossara Roonsamrarn

Member

5. Mr.Piyaphong Artmangkorn

Member

6. Mr.Ajay Mundkur

Member

7. Mr.Nophadon Ruengchinda

Member

8. Mr.Anuwat Luengtaweekul

Member


Member

10. Mr.Rick Yakabowich

Member

11. Mrs.Sasima Taweeskulchai

Member

12. Mrs.Kjitphan Chunharit

Member

13. Mr.Sakda Chantrasuriyarat

Member



14. Mr.Kamtorn Tantisiriwat

MemberandSecretary

ROLES AND RESPONSIBILITIES OF THE RISK

MANAGEMENTCOMMITTEE

1. To propose the policy on overall risk

managementofTBANKtotheBoardofDirectorsfor their

approval. In this regard, the monitoring and auditing

standards must be established to ensure that the risk

managementpolicyisstrictlyadheredto.

2. To formulate risk management strategies in

accordance with the risk management policies and to

ensure that theBank’s risks are appropriately measured,

monitored,andmaintainedatanappropriatelevel.

3. To review theadequacyof riskmanagement

policy, including the effectiveness of risk management

systemandtheadherencetotheestablishedpolicy.

4. To establish risk management measures

which aims at preventing possible losses from occuring

andfindingresolutions.

5. To assess both internal and external factors

that might have material impact on the Bank’s financial

positions. The assessment results will be taken into

account in the adjustment of TBANK’s overall risk

managementpolicy.

6. Todetermineandorderbusinessunitsunder

the Risk ManagementCommittee for the development of

more efficient risk managing, controlling, and monitoring

mechanism.

7. To monitor and control the risk management

conducts of committees and/or business units to ensure

thattheyareadheretotheestablishedpolicy.

8. To report the committee’s performance to

the Audit Committee regularly on areas which need

improvements, ensuring that the improvementsare in line

withtheestablishedriskmanagementpolicyandstrategies.

CORPORATE GOVERNANCE COMMITTEE

TBANK has realized the importance of having

good corporate governance system in accordance with

theCodesofConductforlistedcompaniesandtheSET’s

guidelines on the disclosure of information on good

corporate governance in the annual report. The Bank’s

Board of Directors, therefore, plays the role of the

Corporate Governance Committee by determining policy

oncorporategovernanceincompliancewiththeSET,the

SEC, and the BOT’s guidelines. The committee has

assigneddutiesfortwoSub-committeesasfollows:

1. The Executive Committee undertakes the

oversightandcontrolof theBank’sbusinessconducts to

ensure the policy guideline on corporate governance,

approvedbyBoardofDirectors,iscomplied.

2. The Audit Committee is responsible for

monitoring, reviewing, and examining the policy

compliance to ensure that the Bank has good corporate

governancesystem.

ASSET AND L IAB IL ITY MANAGEMENT

COMMITTEE (ALCO)

The Executive Committee has established the

ALCO to manage the Bank’s assets and liabilities

effectively and to be consistent with the organizational

structure. As of 31 December 2009, the committee

consistedof:

1.Mr.Suphadej Poonpipat

Chairman

2.Ms.Suvarnapha Suvarnaprathip

ViceChairperson


ViceChairman


Member

5.Mrs.Noossara Roonsamrarn

Member

6.Mr.Nophadon Ruengchinda

Member

7. Mr.Anuwat Luengtaweekul

Member

8.Mr.Ajay Mundkur

Member


Member

10. Mr.Lalit Dharmaseri

Member

RepresentativeoftheRiskControlDepartment

Secretary

ROLESANDRESPONSIBILITIESOFTHEASSET

ANDLIABILITYMANAGEMENTCOMMITTEE

1. ToformulatetheBank’sliquidity,interestrate,

and exchange rate risk management plans under the

policyestablishedbytheExecutiveCommittee.



2. To manage TBANK’s liquidity and exchange

raterisks inaccordancewith the trendsofmoneymarket

andcapitalmarketcondition.

3. Tomanage theBank’s interest rate structure

anddetermine the rateof interestboth floatingand fixed

ratesforwhichtopreventtheadverseimpactfrominterest

ratesvolatility.

4.Toapproveinvestmentsinbondsandprivate

debtinstrumentswithinbudgetlimits.

5. To report the performance of the liquidity,

interest rate and exchange rate management to the

ExecutiveCommittee.

INVESTMENT PORTFOLIO COMMITTEE


InvestmentPortfolioCommitteeinordertoensurethatthe

investmentportfoliooftheBankisefficientandconsistent

to the organizational structure. The Committee, as of 31

December2009,comprisedofthefollowings:


Chairman

2. Ms.Suvarnapha Suvarnaprathip

ViceChairperson

3.Mr.Somjate Moosirilert

ViceChairman


Member

5.Dr.Chartchai Parasuk

Member

6.Mr.Lalit Dharmaseri

Member


Secretary


INVESTMENTPORTFOLIOCOMMITTEE

1. Todeterminetheinvestmentpolicyaswellas

considerandapproveinvestmentplans.

2. Toapprove the investmentswithin thescope

of authority specified by TBANK, which has to be

complied with established position limit and VaR limit.

Toexamineinvestmentproposalsthatexceeditsauthority

before propose them to the Executive Committee which

hashigherauthorityforseekingapproval.

3. To review the investment performance and

determine guidelines aimed at improving investment

performance.

4. To manage the market risk arising from

changesinpricesofinvestmentportfolios.

5. To establish and review the ratio of

provisioning or determine the impairment value of the

securitiesinvested.

CREDIT COMMITTEE


Credit Committee to enhance the efficiency of TBANK’s

credit underwriting process and comply with the

organizational structure of the Bank. As of 31 December

2009, the members of the Credit Committee were

including:


Chairman


ViceChairperson


ViceChairman


Member

5. Mr.Nophadon Ruengchinda

Member

6.Mr.Terry Watkins

Member

7.Mr.Noel Singh

Member

8.Mrs.Sasima Taweeskulchai

Member

9. Mr.Kamtorn Tantisiriwat

Member


Secretary

ROLESANDRESPONSIBILITIESOFTHECREDIT

COMMITTEE

1. Toestablishaworkplanandoversightcredit

approval procedures under the policy approved by

TBANK’sExecutiveCommitteeorBoardofDirectors.

2. To establish covenants and conditions of

credit lines and approve new credit lines as well as the

adjusted conditions on credit lines within the delegated



authority, taking intoaccount thecredit riskassessments

within the scope specified by TBANK’s Executive

CommitteeorBoardofDirectors.

3. To establish the authority on credit approval

to a person or a group of persons within delegated

authorityoftheCreditCommittee.

4. Toapprovetransactionswhichexceedscope

of authorization of the Debt Restructuring Committee or

other subsequently appointed committee of which scope

of responsibilities is similar to the forthmentioned

committee.

5. To screen credit applications which exceed

thescopeofauthorizationoftheCreditCommitteeinorder

to propose them to TBANK’s Executive Committee or

Board of Directors for seeking approval. In case of

urgency, the Credit Committee can propose the credit

applications to the forthmentioned Committee without

screening.

6. To report credit approval results to TBANK’s

ExecutiveCommitteeorBoardofDirectors.

TheExecutiveCommitteehasalsoestablished

a number of Sub-committees to ensure that TBANK’s

business conducts have been managed in a proper,

efficient,andeffectivemanner.

EXECUTIVES

As of 31 December 2009, TBANK had the

executive in the manager position and the first four

executives subsequent to the manager according to the

SECguidelinesasfollows:


ChiefExecutiveOfficer


ViceChairpersonofthe

ExecutiveCommittee


SeniorExecutiveVicePresident


ExecutiveVicePresident



6.Mr.Nophadon Ruengchinda


7.Mr.Anuwat Luengtaweekul


8. Mr.Ajay Mundkur


9.Mr.Kobsak Duangdee


10. Mr.Amorn Kitinartintranee


11. Mrs.Rambha Bhoocha-oom


Note: Mr. Bundit Cheevadhanarak, Senior Executive Vice President, resignedfromhispositioninTBANKon1April2009

CHIEF EXECUTIVE OFFICER

With reference to the BOT Notification No.

TorPorTor.ForKorTor.(21)434/2006dated28March2006

approvingtheappointmentofMr.SuphadejPoonpipatas

Chief ExecutiveOfficer. TBANK’sBoard of Directorshas

determinedthedutiesandauthorityoftheChiefExecutive

Officerasfollows:

1. To formulate the guideline and plan for

business conducts which aim at achieving goals and

consistentwithTBANK’svisionsandmissions.

2. Toconductbusinessplanandbudgeting for

proposingtoTBANK’sExecutiveCommitteeandBoardof

Directorsforconsideration.

3. Tomanageandapprovebusinesstransactions,

aswell asconduct theoversight onTBANK’sexecutives

andstaff,ensuringthattheyfollowthebusinessplanand

budgetapprovedbytheBank’sExecutiveCommitteeand

BoardofDirectors.

4. To manage and approve matters related to

TBANK’s organization structure and human resource

management.

5. To report TBANK’sbusinessperformance to

theExecutiveCommitteeortheBoardofDirectors.

Aside from delegating for other to act on the

behalfofTBANKasaforementioned,TBANKhasprepared

regulationandorganizationalchartdemonstratingauthority

and responsibility to manage internal operation of the

Bank,inordertofairlydiversifyduties,responsibilitiesand

authorities to various units properly and productively.

This creates efficiency in decision-making and dexterity

inexecution,allunderadequatesupervisionandcontrol.

As regards the level of approval authorization,

the Chief Executive Officer is authorized to approve

acredit line, investmentorobligationworthnomorethan



5. To ensure the disclosure of information and

reports within respective authority to the supervisory

agency in accordance with authority’s rules and

regulations.

6. Tocontactandcommunicatewithshareholders

ingeneral,ensuringthattheyarewellinformedabouttheir

rightsandinformationofTBANK.

7. To support activities of TBANK’s Board of

Directors.

BOARDOFDIRECTORSMEETINGS

TBANK’s Board of Directors holds the meeting

regularlyonthelastweekofeachmonth.Itmayalsohold

additionalmeetingsasdeemedappropriate.Themeeting

agenda will be clearly determined in advance including

the regular agenda such as business performance

monitoring, approval of business transactions, and risk

management. The Secretary of the Board of Directors is

responsibleforsendingmeetinginvitationstoallmembers

oftheBoardalongwiththeagendaaswellassupporting

documents in advance so that the Board will have

sufficient time to review before attend the meetings.

In2009,theBoardofDirectorsheld12generalmeetings.

AttheBoardofDirectorsmeeting,everydirector

is encouraged to express their opinions and adopts

resolutions independently. TheChairmanof theBoardof

Directors shall provide opportunities to all directors to

express theiropinionsbefore requesting for theadoption

oftheresolution.Therecommendationandopinionsofthe

directorsatthemeetingsaredocumented.Theminutesof

themeetingsareapprovedbytheBoardofDirectorsand

available to be examined by the Board and related

parties.

THB 300 million, provided that they are supported

by collateral in the form of bonds, deposits or debt

instruments.

COMPANY SECRETARY

In accordance with the principles of good

corporategovernance,TBANKhasassignedtheOfficeof

Chief Executive Officer to be a unit that performs the

corporate secretariat functions to ensure the Bank’s

businessmanagementismoreeffective.


COMPANYSECRETARY

1. To provide the Board of Directors with

preliminary advice on laws, rules and regulations

aswellastheArticlesofAssociationofTBANKandensure

that they have been complied properly and regularly.

Moreover, the secretary is entitled to report the Board

ofDirectorsonanymaterialchanges.

2. To organize Annual General Meeting of

Shareholders and the Board of Directors meetings in

compliancewithlegalrequirementsaswellastheArticles

ofAssociationofTBANK.

3. To take minutes of Annual General Meeting

of Shareholders and the Board of Directors meetings,

aswellasmonitoringtheimplementationoftheresolutions

agreedat theshareholders’meetingand themeetingsof

theBoardofDirectors.

4. To document and organize director’s

administrative documents, invitations for the Board of

Directors’meeting, theminutesof theBoardofDirectors’

meeting, TBANK’s Annual Report, invitations for

the shareholders’ meeting and the minutes of the

shareholders’meeting.

Chaiyapruk Children’s Home

Donated funds for expenses on meals, books and other items to the underprivileged children to provide them with the opportunities in the education and future careers



DIRECTORS’ATTENDANCEATMEETINGHELDIN2009

NOMINATIONANDAPPOINTMENTOFDIRECTORSAND

OTHERCOMMITTEES

1. Appointment Procedures of TBANK’s Board

ofDirectors

TBANKdoesnotspecifythemaximumnumberof

directors.However,inaccordancewiththeBank’sArticles

ofAssociation,theBankmusthaveat leastfivedirectors.

The appointmentprocedure can be categorized into two

cases, including the case of appointing new director to

replacetheotherthatisretiredbyrotation;andthecaseis

when the appointment is made during the tenure of

directorship due to position vacancy. In this regard,

TBANK’s Board of Directors has established the

Nomination Committee in order to select and nominate

qualified candidates for holding the directorship. Under

the first circumstance, the resolution of the shareholders’

meetingisrequired,while,inthelattercase,theBoardof

Directors is able to approve the director’s appointment

given that the qualifications are fulfilled. In addition, the

appointment of the independent director has to be

conductedincompliancewiththeregulationsimposedby

theBOT.

In electing the Bank’s Director at the

shareholders’ meeting, every shareholder has equitable

voting rights. The rules and procedures of Director’s

electionattheshareholders’meetingareasfollows:

(1) Eachvoterhasthenumberofvoteequals to

thenumberofshares,onesharerepresentsonevote.

(2)Votecastingcanbeconductedindividuallyor

in terms of a group of individuals or by any other

procedure as deemed appropriate by the shareholders.

However,ineachresolution,allshareholdersmustcastall

oftheirvotesasstatedin(1)

(3) The resolutions are adopted by a majority

vote. In the case when the votes are equal, the ultimate

decisionisupontheChairmanofthemeeting.

Note: IncompliancewiththeBank’sArticlesofAssociationamendedby theExtraordinaryMeetingofShareholdersNo.3/2009 on6October2009.

Notes: 1. Mr.SuvitArunanondchaiandMr.VichitYarnamornresignedfromtheirdirectorshipofTBANKon23Febuary2009

2. Assoc.Prof.Dr.SomjaiPhagaphasvivathanahasassumedhisdirectorshipsince26March2009

3.Mr.KobsakDuangdeehasassumedhisdirectorshipsince1April2009

4. Mr.SomjateMoosirilerthasassumedhisdirectorshipsince29October2009

5. Mr.MartinWeekshasassumedhisdirectorshipsince24December2009

(Unit:Times)

1. Mr.Banterng Tantivit 12 - - - - 2. Mr.Suphadej Poonpipat 12 - - 7 14 3. Mrs.Michele Kwok 7 - - - - 4. Mr.Kiettisak Meecharoen 11 8 - - - 5. Mr.Narong Chivangkur 12 - 2 - - 6. Mr.Sathaporn Jinachitra 12 2 2 - - 7. Assoc.Prof.Dr.SomjaiPhagaphasvivathana 9 6 - - - 8. Ms.SuvarnaphaSuvarnaprathip 11 - - - 14 9. Mr.Brendan King 10 - - - 11 10. Mr.Somjate Moosirilert 2 - - 0 311. Mr.Kobsak Duangdee 8 - - 0 1012. Mr.Martin Weeks 0 - - - 0Directors Resigning during 2009 1. Mr.Suvit Arunanondchai 1 2 - - - 2. Mr.Vichit Yarnamorn 1 - - - -

LIST OF TBANK’S DIRECTORS

(12 MEETINGS) (8 MEETINGS) (2 MEETINGS) (8 MEETINGS) (14 MEETINGS)

BOARD OF DIRECTORS

AUDIT COMMITTEE

NOMINATION AND

REMUNERATION COMMITTEE

RISK MANAGEMENT COMMITTEE

EXECUTIVE COMMITTEE



EVALUATION OF BOARD OF DIRECTORS AND

MANAGEMENTTEAM’SPERFORMANCE

TBANK has conducted the evaluation of

the Board of Directors’ performance every year. The

evaluation can be categorized into: 1) The evaluation of

BoardofDirectors’performanceand2)Theevaluationof

ChiefExecutiveOfficer’sperformance

SUCCESSIONPLAN

The Nomination and Remuneration Committee

is responsible for ensuring that there is the succession

plan for the Chief Executive Officer position for the

continuityintheBank’smanagement.

THE ORIENTATION FOR NEWLY APPOINTED

DIRECTORSANDEXECUTIVES

When thecompositionof thedirectorshasbeen

changedor there is newly appointedexecutive,Officeof

Chief Executive Officer is responsible for preparing

necessary documents for new director. Such documents

compose of the Bank’s annual report, which contains

visions,strategies,andgoalsoftheBank;theDirectorand

executive’s manual which includes qualifications and

profile prohibited by laws related to financial institutions;

andtherelevantActsandnotifications.

REMUNERATIONPOLICY

TheremunerationofTBANK’sDirectorshasbeen

determinedbybeingcomparedwiththeindustry’sdirector

remuneration. Suchcomparisonhasbeenappliedalong

with the consideration on roles, duties, and scope of

responsibilities of each director. The remuneration of

TBANK’sDirectorshastobeundertheconsiderationand

screeningoftheNominationandRemunerationCommittee

and suggested to the Bank’s Board of Directors for their

considerationbeforebeingproposedto theshareholders’

meetingforseekingtheirapproval.Theremunerationwillbe

paidintermsofmeetingstipends,monthlycompensation,

andperformanceallowance.

Members of Sub-Committee will receive the

remuneration as speficied by TBANK’s Board of the

Directors based on the recommendation of Nomination

and Remuneration Committee. The recommendation is

derived by considering their duties and responsibilities

comparedtoapeerof the industry.TheSub-Committee’s

2. Appointment Procedures of the Executive

Committee

TBANK’s Board of Directors may appoint

anumberofdirectorstoholdthepositionintheExecutive

Committeeasitdeemsappropriate.Amongthese,oneof

them shall serve as the Chairman of the Executive

Committee. The Executive Committee will be authorized

to manage and conduct TBANK’s business affairs as

assigned by TBANK’s Board of Directors. The Chief

ExecutiveOfficerwillbeex-officioExecutiveCommittee.

3. Appointment Procedures of the Audit

Committee

The Board of Directors will appoint at least

three Independent Directors who have met the Bank’s

qualifications to assume the directorship in the Audit

Committee.TheCommittee isresponsible forundertaking

responsibilities as speficied in the charter of the Audit

CommitteewhichisincompliancewiththeSET’sguideline.

TheCommitteeisfullyindependenttoperformtheirduties

andhasadirectreportinglinetotheBoardofDirectors.

4. Appointment Procedures of the Nomination


The Board of Directors will appoint at least

threeNon-executiveDirectors toassume thedirectorship

in the Nomination and Remuneration Committee. The

Committee is responsible for undertaking responsibilities

as specified in the Charter of the Nomination and

Remuneration Committee in accordance with the SET’s

guidelinesandtheBOT’sregulations.

DEVELOPMENTOFDIRECTORSANDEXECUTIVES

Each Director of TBANK has attended at least

one training course organized by the Thai Institute of

Directors Association (IOD). Director and executive who

attendedthetrainingcoursein2009were:

1. Mr.NarongChivangkur

IndependentDirector/Chairmanofthe

NominationandRemunerationCommittee

Certificate:FinancialStatementforDirectors

(FSD),Class4/2009

2. Mr.AnuwatLuengtaweekul


Certificate:SuccessfulFormulation&

ExecutiontheStrategy(SFE),Class3/2552



remuneration will be in terms of meeting stipendsand/or

positionallowance.

Theremunerationoftheexecutivesiscompliedwith

policiesandstandardswhichareassociatedwiththeBank’s

as well as the individual performance. The performance

assessmentisconductedviatheuseofKeyPerformance

Indicators (KPI). The executives will be remunerated

in termsofsalariesandallowancesofwhich theaverage

meetstheindustry’speer.

DIRECTOR’SREMUNERATION

a) Financial Remuneration

As of 31 December 2009, TBANK has

remunerated three Committees, including the Board of

Directors, the Audit Committee, and the Nomination and

Remuneration Committee totally THB 14,355,294.47.

The remuneration has been paid in terms of meeting

stipends,positionallowance,andperformanceallowance

(from the Bank’s performance in 2008) which can be

summarizedasfollows:

1) DetailsontheremunerationofTBANK’sDirectorsareasfollows:

Notes: 1. Mr.SuvitArunanondchaiandMr.VichitYarnamornresignedfromtheirdirectorshipofTBANKon23Febuary2009.

2. AssociateProfessorDr.SomjaiPhagaphasvivathanahasassumedhisdirectorshipsince26March2009.

3.Mr.KobsakDuangdeehasassumedhisdirectorshipsince1April2009.

4. Mr.SomjateMoosirilerthasassumedhisdirectorshipsince29October2009.

5. Mr.MartinWeekshasassumedhisdirectorshipsince24December2009.

1. Mr.Banterng Tantivit 630,000.00 466,800.00 1,412,926.26 2,509,726.26

2. Mr.Suphadej Poonpipat 315,600.00 226,800.00 706,463.13 1,248,863.13

3. Mrs.Michele Kwok 315,600.00 132,300.00 706,463.13 1,154,363.13

4. Mr.Kiettisak Meecharoen 315,600.00 207,900.00 706,463.13 1,229,963.13

5. Mr.Narong Chivangkur 315,600.00 226,800.00 706,463.13 1,248,863.13

6. Mr.Sathaporn Jinachitra 315,600.00 226,800.00 706,463.13 1,248,863.13

7. Assoc.Prof.Dr.SomjaiPhagaphasvivathana 236,700.00 170,100.00 0.00 406,800.00

8. Ms.SuvarnaphaSuvarnaprathip 315,600.00 207,900.00 706,463.13 1,229,963.13

9. Mr.Brendan King 315,600.00 189,000.00 706,463.13 1,211,063.13

10. Mr.Somjate Moosirilert 78,900.00 37,800.00 0.00 116,700.00

11. Mr.Kobsak Duangdee 236,700.04 151,200.00 0.00 387,900.04

12. Mr.Martin Weeks 26,300.00 0.00 0.00 26,300.00

Directors Resigned in 2009

1. Mr.Suvit Arunanondchai 52,600.00 18,900.00 706,463.13 777,963.13

2. Mr.Vichit Yarnamorn 52,600.00 18,900.00 706,463.13 777,963.13

TOTAL 3,523,000.04 2,281,200.00 7,771,094.43 13,575,294.47

LIST OF DIRECTORS MONTHLY COMPENSATION

MEETING STIPENDS

PERFORMANCE ALLOWANCE

TOTAL

TYPE OF REMUNERATION (Baht per Year)



NAMELIST

1.Mr.KiettisakMeecharoen 370,000.00

2.Mr.SuvitArunanondchai 35,000.00

3.Mr.SathapornJinachitra 185,000.00

4. Assoc.Prof.Dr.SomjaiPhagaphasvivathana 150,000.00

TOTAL 740,000.00

AMOUNT (Baht per Year)

2) The remuneration made to the Audit Committee in terms of meeting stipends amounted to

THB740,000.00.

4) No remuneration made to the Executive

CommitteeasithasnotyetbeendeterminedbyTBANK’s

BoardofDirectors.

5) The remuneration of 12 executives of

TBANK whoassume manager position and the next four

positionsbelow, inaccordancewith theSEC’sguideline,

is in terms of salaries, cost-of-living allowances, and

contributionpaymentsamountedtoTHB55,477,506.00.

6) With regard to the remuneration of the

Independent Director of the subsidiaries, there is one

Independent Director who assume the directorship in

Thanachart Life Assurance Company Limited and

received thecompensationamounted toTHB150,000.00

in2009.

b) Remuneration other than cash payments

-None-

NAMELIST

1.Mr.NarongChivangkur 25,000.00

2.Mr.SathapornJinachitra 15,000.00

TOTAL 40,000.00

AMOUNT (Baht per Year)

3) The remuneration made to the Nomination and Remuneration Committee in terms of meeting stipends

amountedtoTHB40,000.00.

Heroes in Black

Provided fund to sponsor the purchase of bulletproof helmet for scout volunteers stationed along the border of Thailand-Cambodia as well as presented stories of their lives to communicate with the public of their mission to protect the country.



REPORT OF THE NOMINATION AND REMUNERATION COMMITTEE

TheBoardofDirectorsofThanachartBankPublicCompanyLimitedapprovedtheestablishmentoftheNomination

CommitteeandtheRemunerationCommitteeon26March2002.On25March2009,theBankBoardofDirectors’meeting

adopted a resolution to combine the Nomination Committee and the Remuneration Committee together and rename the

Committee to “theNominationand RemunerationCommittee”. TheCommitteesconsistedof three independentdirectors

whosenamesasat15January2010wereasfollows:

1. Mr.Narong Chivangkur Chairman(IndependentDirector)

2. Mrs.Michele Kwok Member(Non-ExecutiveDirector)

3. Mr.Sathaporn Jinachitra Member(IndependentDirector)

Mr.Panupan Tuangthong ActingSecretary

In2009,theNominationCommitteeheldtwomeetingstoprocessthefollowingimportantmatters:

1. Toselectandnominatethenameofpersonappropriatefortheassessmenttobeappointedasadirectorby

theBank’sBoardofDirectorsmeeting.

2. To review and nominate the names of person appropriate for assessment to be appointed as directors

replacing thedirectors retiringby rotation in theAnnualGeneralMeetingofShareholders for theyear2010.

The names of person appropriate have been proposed to be approved at the Bank’s Board of Directors

meetingandtheAnnualGeneralMeetingofShareholders.

3. To select and nominate the name of person appropriate for the assessment to be appointed as the Senior

ExecutiveVicePresidentbytheBank’sBoardofDirectorsmeeting.

4. Toreviewrules,procedures,andchannelsofprovidingopportunitiesforshareholderstoproposethenameof

personappropriatetobeappointedasBank’sdirectors.

5. To acknowledge the Bank’s Board of Directors’ performance for the year 2008 and propose at the Bank’s

BoardofDirectors’meetingforseekingthesolutiontobeimplementedforsupportingtheBoardofDirectors’

operations.

6. Toreviewandconsider theremunerationpackagesfordirectorsandexecutives, taking intoaccount that the

assigneddutiesand responsibilitiesandperformanceare in linewith theBank’spolicyandoperating result.

The remunerationpackageswereproposed forapprovingat theBank’sBoardofDirectorsmeetingand the

AnnualGeneralMeetingofShareholdersfortheyear2010.

Mr. Narong Chivangkur

ChairmanoftheNominationand

RemunerationCommittee



SUPERVISION AND MANAGEMENT STRUCTURES

Information as of 31 December 2009

Channel Development

Treasury

Trouble Debt Restructuring

Financial Institution Customer

Corporate and SMEs Customer

Product Development

Retail Customer and Branch Network

Communication & Brand Management

Operation and Support

Human Resource

Corporate Strategy and Finance Account Control

Information and Technology

Business Group Supporting Group

Consulting

Risk Management Department

Internal Audit

Compliance Unit

Office of CEO

Compensation Management Department

Audit Committee Nomination and

Remuneration Committee Risk Management Committee

Asset & Liability Management Committee

Investment Portfolio Committee Credit Committee

IT Security Management Committee

CHIEF EXECUTIVE OFFICER

EXECUTIVE COMMITTEE

BOARD OF DIRECTORS



Mr. Banterng Tantivit Chairman (Non-Executive Director) Age 65 years

Education(s) - Master of Science (Finance), Sloan School of Management,

Massachusetts Institute of Technology, USA

- Bachelor of Science in Electrical Engineering,

Massachusetts Institute of Technology, USA

Directorship and Executive training program(s) - Director Accreditation Program (DPA), Class 25/2004,

Thai Institute of Directors Association

Experience(s) in the past 5 years

2006-Present - Vice Chairman, Thanachart Insurance Company Limited

- Director, Arsom Silp Institution of the Arts Council

- Director, Siam Piwat Holding Company Limited

2005-Present - Chairman, Thanachart Life Assurance Company Limited

2003-Present - Chairman, MBK Resort Public Company Limited

- Director, B.V. Holding Company Limited

- Chairman, Plan Estate Company Limited

- Director, Siam Piwat Company Limited

2001-Present - Advisor, Dusit Thani Public Company Limited

- Advisor, Pathum Ricemill & Granary Public Company Limited

1994-Present - Chairman, Thanachart Capital Public Company Limited

(Original name was National Finance Public Company Limited

and was registered to change name in 2006)

1989-Present - Chairman and Chairman of Executive Committee,

MBK Public Company Limited

(Holding Chairman position in 2006)

1987-Present - Director, Deebuk Company Limited

- Director, Thai Farming Company Limited

Family relationship with management None

No. of TBANK share(s) held None

BOARD OF DIRECTORS AND MANAGEMENT TEAM



Mr. Suphadej Poonpipat Vice Chairman, Chairman of Executive Committee and Chief Executive Officer (Executive Director) Age 59 years

Education(s) - Master of Science, University of Wisconsin, USA

- Bachelor of Business Administration and Accounting,

Chulalongkorn University

Directorship and Executive training program(s) - Director Accreditation Program (DAP), Class 8/2004,



2007-Present - Director, Royal Orchid Hotel (Thailand) Public Company Limited

- Director, Thai Royal Orchid Real Estate Company Limited

2006-Present - Director, Siam Piwat Holding Company Limited

2005-Present - Director and Chairman of Executive Committee,


- Director, MBK Resort Public Company Limited

2003-Present - Director and Chairman of Executive Committee,

Thanachart Life Assurance Company Limited

- Director, Plan Estate Company Limited

- Director, Siam Piwat Company Limited

- Vice Chairman and Vice Chairman of Executive Committee,

MBK Public Company Limited

(Holding Vice Chairman in 2006)

2000-Present - Advisor, Pathum Ricemill & Granary Public Company Limited

1992-Present - Director, Advance Info Service Public Company Limited

1990-Present - Vice Chairman and Chairman of Executive Committee,

Thanachart Capital Public Company Limited

(Holding Vice Chairman position in the Board of Directors and

Chairman position in of Executive Committee in 2007)





Mrs. Michele Kwok Vice Chairperson (Non-Executive Director) Age 50 years

Education(s) - Master of Business Administration (Finance & Marketing),

University of British Columbia, Canada

- Bachelor of Science in Mathematics, University of British Columbia,

Canada


2008-Present - Director, Canada China Business Council, Canada

2006-Present - Governor, The Canadian Chamber of Commerce, Hong Kong

- Senior Vice President/Regional Head, Asia/Pacific and Middle East,

The Bank of Nova Scotia, Hong Kong

- Director, Scotiabank (Hong Kong) Limited, Hong Kong

- Director, Boracay Limited, Hong Kong

- Director, The Bank of Nova Scotia Asia Limited, Singapore

- Director, The Bank of Nova Scotia Berhad, Malaysia

- Director, Scotiatrust (Asia) Limited, Hong Kong

2004-2006 - Vice President, Human Resources, Scotiabank, Canada

2000-2004 - Vice President, Commercial Banking, Scotiabank, Canada



Mr. Kiettisak Meecharoen Chairman of the Audit Committee (Independent Director) Age 63 years

Education(s) - Master of Theoretical Economics, Keio University, Japan

- Bachelor of Science in Finance, Hitotsubashi University, Japan



- Audit Committees Program Class 10/2005,


- Banking and Monetary Policy in Developing Countries Program,

Harvard University


2005-Present - Independent Director, Tararom Enterprise Public Company Limited

2000-Present - Independent Director, Thanachart Life Assurance Company Limited

- Independent Director and Chairman of the Audit Committee,

Safety Insurance Public Company Limited

(Holding the Chairman position of the Audit Committee in 2004)

1997-1999 - Assistant Governor, Bank of Thailand





Mr. Narong Chivangkur Chairman of the Nomination and Remuneration Committee (Independent Director) Age 65 years

Education(s) - Management Development Program,

Asian Institute of Management, Philippines

- Financial Management Program, Rochester Institute of Technology, USA

Directorship and Executive training program(s) - Financial Statement for Directors (FSD), Class 4/2009,


- Successful Formulation & Execution the Strategy (SFE), Class 2/2008,


- Role of the Compensation Committee (RCC), Class 4/2007,


- Corporate Social Responsibility (CSR), Class 1/2007,


- Director Certification Program (DCP) Class 34/2003,



2005-Present - Director, Mom Chailai Development Company Limited

2004-Present - Director, Momentum Sale and Distribution Company Limited

2003-Present - Director, Momentum IM Company Limited

2002-Present - Director, Momentum Consulting Company Limited

2000-Present - Director, Momentum BBS Company Limited





Mr. Sathaporn Jinachitra Member of the Audit Committee and the Nomination and Remuneration Committee (Independent Director) Age 61 years

Education(s) - Master of Science (Econometrics), The London School

of Economics and Political Science (University of London), England

- Bachelor of Science (Economics), University College London

(University of London), England

- Bachelor of Art (Law), Sukhothai Thammathiraj University

Directorship and Executive training program(s) - Corporate Social Responsibility Program (CSR), Class 1/2007,


- DCP Refresher Course, Class 2/2006,


- Director Certification Program (DCP), Class 0/2000,



2009-Present - Director, B.M.S. Company Limited

2006-Present - Dispute Resolution Committee under The National

Telecommunications Commission

- Director, I Mutchima Company Limited

1999-Present - Director, Thai Institute of Directors Association (IOD)

2002-2006 - President, Export-Import Bank of Thailand





Assoc. Prof. Dr. Somjai Member of the Audit Committee (Independent Director) Phagaphasvivathana Age 64 years

Education(s) - Doctorate in Political Economic, Madrid University, Spain

- Diploma de Sciences Politiques,

Centre European University de Nancy, France

- Licenciado en Ciencias Politicas, Madrid University, Spain

- Bachelor of Arts, Chulalongkorn University

Directorship and Executive training program(s) - Director Certification Program (DCP), Class 34/2005,



2006-Present - Director and Chairman of the Audit Committee,

SEAFCO Public Company Limited

1997-Present - Director and Chairman of the Audit Committee,

Lee Feed Mill Public Company Limited

- Director, Krungthep Thanakom Company Limited

- Director, Thai Hua Rubber Public Company Limited

1996-Present - Director and Member of the Audit Committee,

Amarin Printing & Publishing Public Company Limited

1982-2006 - Associate Professor, Faculty of Political Science, Thammasat University



Note: Assoc. Prof. Dr. Somjai Phagaphasvivathana was appointed as a director of the Bank on 26 March 2009.

Ms. Suvarnapha Suvarnaprathip Vice Chairperson of the Executive Committee (Executive Director) Age 64 years

Education(s) - Bachelor of Economics, Monash University, Australia

- Commercial Lending Training Program, Banker Trust, New York, USA




2005-Present - Director and Vice Chairperson of Executive Committee,


- Director, Thanachart Life Assurance Company Limited

1991-Present - Director, Seacon Development Public Company Limited





Mr. Brendan King Vice Chairman of the Executive Committee (Executive Director) Age 46 years

Education(s) - Master of Business Administration (Finance & International Business),

York University, Canada

- Bachelor of Art (Business & Economics), York University, Canada


2005-Present - Director, Xi’an City Commercial Bank, China

2004-Present - Director, Scotiabank (Hong Kong) Limited, Hong Kong

- Director, Scotia Nominees (Hong Kong) Limited, Hong Kong

- Director/Treasury, The Canadian Chamber of Commerce, Hong Kong

- Vice President, Greater China, The Bank of Nova Scotia, Hong Kong

2002-2004 - General Manager, International Corporate Finance,

Scotiabank (Bahamas) Limited, USA



Mr. Somjate Moosirilert Director of the Executive Committee and Senior Executive Vice President (Executive Director) Age 53 years

Education(s) - Master of Management, Sasin Graduate Institute of Business

Administration of Chulalongkorn University

- Bachelor of Business Administration and Accounting,

Thammasat University

Directorship and Executive training program(s) - Role of the Chairman Program (RCP), Class 5/2001,



2009-Present - Executive Director, Association of Securities Companies

- Director, Thailand Securities Finance Corporation

- Vice Chairman, The Stock Exchange of Thailand

- Chairman, Thanachart Securities Public Company Limited

- Director, Executive Director and Chief Executive Officer,


2002-2008 - President, Thai Asset Management Corporation



Note: Mr. Somjate Moosirilert was appointed as a director of the Bank on 29 October 2009.



Mr. Kobsak Duangdee Director of the Executive Committee and Executive Vice President (Executive Director) Age 52 years

Education(s) - Master of Business Administration (Finance), University of Tennessee,

Knoxville, USA

- Bachelor of Commerce and Accountancy,

Chulalongkorn University




2008-Present - Director and Executive Director,


- Vice President/Country Head, The Bank of Nova Scotia,

Bangkok Representative Office

2001-Present - Director, Thai-Canadian Chamber of Commerce

1997-2008 - Vice President/Country Head, The Bank of Nova Scotia, Bangkok Branch



Note: Mr. Kobsak Duangdee was appointed as a director of the Bank on 1 April 2009.

Mr. Martin Weeks Director of the Executive Committee (Executive Director) Age 44 years

Education(s) - Master of Science in Finance, University of London, England

- Diploma in Corporate Treasury Management,

The Association of Corporate Treasurers

- Diploma in Retail Banking, The Chartered Institute of Bankers


2007-Present - Senior Vice President & Regional Treasurer, The Bank of Nova Scotia,

Hong Kong

- Director, The Bank of Nova Scotia Asia Limited, Singapore

- Director, Scotiabank (Hong Kong) Limited, Hong Kong

2004-2007 - Trustee UK Pension Scheme, The Bank of Nova Scotia

2002-2004 - Co-Head Capital Markets and Money Markets, The Bank of Nova Scotia



Note: Mr. Martin Weeks was appointed as a director of the Bank on 24 December 2009.



Mr. Piyaphong Artmangkorn Executive Vice President Age 52 years

Education(s) - Master of Public Administration (Taxation),

University of Southern California, USA

- Bachelor of Economics, Thammasat University




1998-Present - Director and Executive Director, MBK Public Company Limited

2005-2009 - Chairman and Chairman of Executive Committee,


(Resigned from the positions of Chairman and Chairman of Executive

Committee on 19 February 2009)

2003-2005 - Director and Executive Vice President, Thanachart Bank

Public Company Limited

2001-2008 - Director, Thai Royal Orchid Real Estate Company Limited

2000-2008 - Director, Royal Orchid Hotel (Thailand) Public Company Limited

1998-2005 - Senior Vice President, National Finance Public Company Limited



Mrs. Noossara Roonsamrarn Executive Vice President Age 51 years

Education(s) - Master of Business Administration,

National Institute of Development Administration (NIDA)

- Bachelor of Political Science, Chulalongkorn University

Directorship and Executive training program(s) - DCP Refresher Course, Class 4/2004,


- Director Certification Program (DCP), Class 19/2002,



1997-Present - Director and Member of the Audit Committee,


(Holding position as a member of the Audit Committee in 2006)

2005-2008 - Director and Member of the Audit Committee,


1997-2005 - Director and Executive Vice President, Thanachart Bank

Public Company Limited





Mr. Nophadon Ruengchinda Executive Vice President Age 52 years

Education(s) - Master of Management, Chulalongkorn University

- Master of Business Administration, National Institute of Development

Administration (NIDA)

- Bachelor of Political Science, Chulalongkorn University


2009-Present - Director, T Leasing Company Limited

2005-Present - Director, Thanachart Insurance Company Limited

1998-Present - Director, Thanachart Life Assurance Company Limited

2004-2009 - Director and Chairman of the Audit Committee,


(Resigned from the positions of Director and Chairman of the Audit

Committee on 31 July 2009)

2000-2009 - Director, Thai International Rent A Car Company Limited

(Resigned from the directorship on 23 July 2009)



Mr. Anuwat Luengtaweekul Executive Vice President Age 46 years

Education(s) - Master of Business Administration, Rangsit University

- Bachelor of Science (Accounting), Kasetsart University

Directorship and Executive training program(s) - Director Certification Program (DCP), Class 24/2002,


- Board and Performance Evaluation Program,


- Financers’ Executive Development Program, Class 9/1994,

Association of Finance Companies


2007-2009 - Executive Director and Executive Vice President,


(Resigned from the position of Executive Director on 30 April 2009 and

resigned from the position of Executive Vice President on 31 May 2009)

2007-2007 - Senior Vice President, Corporate Strategy and Planning Division,


2002-2007 - Senior Vice President, Office of Managing Director,






Mr. Ajay Mundkur Executive Vice President Age 45 years

Education(s) - Master of Business Administration, Washington University, St. Louis, USA

- Diploma in Financial Management, Symbiosis Institute of Business

Management, India

- Bachelor of Commerce (Accounting and Auditing), University of Poona,

India


2005-Present - Vice President, Retail Banking, The Bank of Nova Scotia, Canada

2004-2005 - Managing Director, Term Deposits & Day-to-Day Banking,

The Bank of Nova Scotia



Satabun Saeng Sawang Foundation

Helped find speakers who were experts on Art Therapy for special children and arranged the training for the teachers who help and train these children to continue their normal living.



REPORT ON THE CHANGE IN DIRECTOR AND EXECUTIVE’S SHAREHOLDING DURING THE PERIOD BETWEEN 2009 AND 2008 (Information as at 31 December 2009)

No. Name Position Number of Shares

Held as at 31 December 2009

1. Mr. Banterng Tantivit Chairman - - - -

2. Mr. Suphadej Poonpipat Vice Chairman - - - -

3. Mrs. Michele Kwok Vice Chairperson - - - -

4. Mr. Kiettisak Meecharoen Independent Director - - - -

5. Mr. Narong Chivangkur Independent Director - - - -

6. Mr. Sathaporn Jinachitra Independent Director - - - -

7. Assoc. Prof. Dr. Somjai Phagaphasvivathana Independent Director - - - -

8. Ms. Suvarnapha Suvarnaprathip Executive Director - - - -

9. Mr. Brendan King Executive Director - - - -

10. Mr. Somjate Moosirilert Executive Director - - - -

11. Mr. Kobsak Duangdee Executive Director - - - -

12. Mr. Martin Weeks Executive Director - - - -

13. Mr. Piyaphong Artmangkorn Executive Vice President - - - -

14. Mrs. Noossara Roonsamrarn Executive Vice President - - - -

15. Mr. Nophadon Ruengchinda Executive Vice President - - - -

16. Mr. Anuwat Luengtaweekul Executive Vice President - - - -

17. Mr. Ajay Mundkur Executive Vice President - - - -

Number of Shares Held as at

31 December 2008

Increase (Decrease) in

Number of shares

Percentage Shareholding in the Company

(Percent)

CSR Club

The club voluntarily joined by the staff of Thanachart Group to participate in social responsibility activities in various areas such as receiving the donation of stationary equipments and passed to schools in the rural area, the canal cleaning to support the community in preserving the environment, etc.



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Parent Company 1. Thanachart Capital Public Company Limited

Subsidiary Companies 2. Thanachart Securities Public Company Limited

3. Thanachart Fund Management Company Limited

4. Thanachart Training and Development

Company Limited

5. Thanachart Life Assurance Company Limited

6. Thanachart Insurance Company Limited

List of Subsidiary and Related Companies (Information as at 31 December 2009)

Related Companies

11. Siam Piwat Company Limited

12. Siam Piwat Holding Company Limited

13. MBK Public Company Limited

14. MBK Resort Public Company Limited

15. B.V. Holding Company Limited

16. Plan Estate Company Limited

17. Deebuk Company Limited

18. Thai Farming Company Limited

19. Advance Info Service Public Company Limited

20. Royal Orchid Hotel (Thailand) Public Company Limited

21. Thai Royal Orchid Real Estate Company Limited

22. Boracay Limited, Hong Kong

23. The Bank of Nova Scotia Asia Limited, Singapore

24. The Bank of Nova Scotia Asia Limited, Hong Kong

25. Scotiabank (Hong Kong) Limited, Hong Kong

26. The Canadian Chamber of Commerce in Hong Kong

27. The Bank of Nova Scotia Berhad, Malaysia

28. Scotiatrust (Asia) Limited, Hong Kong

29. Canada China Business Council, Canada

30. Tararom Enterprise Public Company Limited

31. Safety Insurance Public Company Limited

7. T Leasing Company Limited

8. Thanachart Legal and Appraisal Company Limited

9. Thanachart Group Leasing Company Limited

10. Thanachart Management and Service

Company Limited

32. Momentum Sale and Distribution Company Limited

33. Mom Chailai Development Company Limited

34. Momentum Consulting Company Limited

35. Momentum BBS Company Limited

36. Momentum IM Company Limited

37. I Mutchima Company Limited

38. B.M.S. Company Limited

39. Lee Feed Mill Public Company Limited

40. Amarin Printing & Publishing Public Company Limited

41. SEAFCO Public Company Limited

42. Krungthep Thanakom Company Limited

43. Thai Hua Rubber Public Company Limited

44. Seacon Development Public Company Limited

45. Scotia Nominees (Hong Kong) Limited, Hong Kong

46. Xian City Commercial Bank, China

47. Thailand Securities Finance Corporation

48. Association of Securities Companies

49. The Bank of Nova Scotia, Canada

50. The Bank of Nova Scotia, Bangkok Representative Office

51. Thai-Canadian Chamber of Commerce



RESPONSIBILITIES OF THE BOARD OF DIRECTORS FOR FINANCIAL REPORT

ThanachartBank’sBoardofDirectorsisresponsiblefortheseparatedandconsolidatedfinancialstatementsand

for financial information presented in this annual report. The aforementioned financial statements were prepared in

accordance with the generally accepted accounting principles, applying appropriate and consistent accounting policies

and with careful judgments and best estimates. Important information is adequately and transparently disclosed to

ThanachartBank’sshareholdersandotherinvestorsinthenotestofinancialstatements.

ThanachartBank’sBoardofDirectorshasestablishedandmaintainedappropriateandeffectiveriskmanagement

andinternalcontrolsysteminordertorationallyassurethattheaccountinginformationiscorrectlyandcompletelyrecorded

andadequatetosustainThanachartBank’sassets,aswellastopreventanymaterialirregularoperationsorfraud.

ThanachartBank’sBoardofDirectorshasappointedan theAuditCommitteecomprising IndependentDirectors

responsibleforrevisionofaccountingpoliciesandthequalityoffinancialstatements,internalcontrol,internalauditandrisk

managementsystem,aswellasthedisclosureofrelatedpartytransaction.TheCommittee’scommentsontheseissuesare

includedintheAuditCommitteeReportinthisannualreport.

ThanachartBank’sseparatedandconsolidatedfinancialstatementswereauditedbytheCertifiedPublicAuditorof

Ernst& YoungOfficeLimited. ThanachartBank’sBoardofDirectorshadprovided theauditing teamall informationand

documentsupportsinorderthattheauditorwouldbeabletoauditandaddresshis/heropiniontotheauditingstandards.

Theauditor’sopinionwasincludedintheReportofIndependentAuditorinthisannualreport.

Thanachart Bank’s Board of Directors is of the opinion that Thanachart Bank’s overall internal control is at

asatisfyinglevelandprovidesreliabilityonThanachartBank’sseparatedandconsolidatedfinancialstatementsfortheyear

ended31December2009whichisincompliancewiththegenerallyacceptedaccountingprinciplesandrelevantrulesand

regulations.

Mr. Banterng Tantivit Mr. Suphadej Poonpipat

Chairman ChiefExecutiveOfficer



REPORT OF THE AUDIT COMMITTEE

TheAuditCommitteeofThanachartBankPublicCompanyLimitedconsistsofthreeindependentdirectorswhoarehighlyqualifiedandhaveextensiveexperiencesinthebankingindustry.TheCommitteeisalsosupportedbytheSeniorVicePresidentoftheAuditDivisionwhoservesassecretary.ThenamesoftheCommittee’smembersareasfollows: 1. Mr.Kiettisak Meecharoen ChairmanoftheAuditCommittee 2. Mr.Suvit Arunanondchai MemberoftheAuditCommittee 3. Mr.Sathaporn Jinachitra MemberoftheAuditCommittee Mr.ChatchawalJantararuangtong Secretary In 2009, Mr. Suvit Arunanondchai resigned from the Bank’s Board of Directors and the Audit Committee. As a result,the Bank’s Board of Directors appointed Assoc. Prof. Dr. Somjai Phagaphasvivathana as the member of the Audit Committee,effectivesince26March2009. TheAuditCommitteeisresponsibleforcarryingoutthedutiesasassignedbyThanachartBank’sBoardofDirectorsinlinewiththerequirementsimposedbytheregulatingauthoritiesconcerned.Theduties,asstatedintheCharterstipulatedbytheBoardof Directors, include, reviewing of financial statements, good corporate governance, internal control systems, risk managementsystems,compliancewiththerequirementsoftheauthoritiesandetc. TheAuditCommittee’stoolsinperformingitsdutiesconsistoftheAuditDivisionandtheComplianceDepartment,bothofwhichreportdirectlytotheAuditCommittee.Asaresult,theCommitteeisabletoperformitsdutiesindependentlyinlinewiththelegal requirements and the principles of good corporate governance in a transparent manner, in order to properly protect theinterestsoftheorganizationwithoutanylimitationimposedontheinformationtobereceived.Throughout2009,theAuditCommitteereceivedfullcooperationfromthemanagementaswellasthestaffconcerned.Alsoin2009,theCommitteeheldsevenmeetingsintotalwiththeauditor,theinternalauditorandThanachartBank’smanagement. TheAuditCommitteereviews thequarterlyandyear-end financialstatementsbydiscussing themwith theauditorsandThanachart Bank’s management. The objective is to ensure the full and proper disclosure of financial information, with specialattentionbeingpaidtoThanachartBank’stransactionswithrelatedparties. TheAuditCommitteealsoperformsother reviews,ensuring that the internalcontrolsystemsand the internalauditsareefficient.TheCommitteediscussesthematterswiththeinternalauditorandhelpsformulateandapprovetheannualauditplanthatcoversoverallaudits, loanreviewsandinformationsystemsaudits.TheCommitteemonitorsandevaluatesthe implementationoftheauditplanquarterly. Asregardsthecompliancewithlegalrequirements,theCommitteecloselymonitorstheperformanceoftheComplianceDepartment, ensuring that the conduct of business affairs is in compliance with the requirements imposed by the authoritiesconcerned, which include, among others, those imposed by the Bank of Thailand, the Office of Securities and ExchangeCommission, the Securities and Exchange of Thailand, the Office of Insurance Commission (OIC) and Anti-Money LaunderingOffice(AMLO). Inrelationtoriskmanagement, theCommitteepaysspecialattentiontomanagementofcreditrisk,marketrisk, liquidityrisk,andoperationalrisk.TheCommitteefullyrealizesthateconomic,politicalandsocialchangescouldcausesignificantimpactsonThanachartBank’sriskmanagement.Asaresult,theCommitteeperformsreviewstoensurethatThanachartBankputsinplaceadequateandconcretemeasurestoproperlydealwiththeseriskfactors. The Audit Committee participated in the meetings of the Board of Directors, in order to become informed of theperformance of various work units including the subsidiaries, and to monitor results of the implementationof various correctivemeasures. Inconclusion,afterhavingevaluatedalltheareasaudited,theAuditCommitteeisoftheopinionthatThanachartBankhasdisclosed financial information in its financial statements fully and accurately. The Bank also has adequate and efficient auditsystems, internalcontrolsystems,corporategovernanceandriskmanagementaswellasappropriatemeasures todealwith therisks.Moreover,theBankhasstrictlycompliedwiththeregulationsandrequirementsimposedbytheauthoritiesconcerned. Aswell,theAuditCommitteeisoftheopinionthatErnst&YoungOfficeLimitedshouldberetainedasThanachartBank’sauditor foranotheryear, taking intoaccount the fact that theauditor iswell recognizedasoneof thecountry’s leadingauditors.Importantly,theauditoralsohasagoodunderstandingofthebusinessandissupportedbywellqualifiedandexperiencedstaff.As a result, it is deemed appropriate that Thanachart Bank proposes to shareholders the appointment of Ernst & Young OfficeLimitedasThanachartBank’sauditorfortheyear2010.

Kiettisak Meecharoen

ChairmanoftheAuditCommittee



REPORT OF INDEPENDENT AUDITOR

To the Shareholders of Thanachart Bank Public Company Limited

IhaveauditedtheaccompanyingconsolidatedbalancesheetsofThanachartBankPublicCompanyLimitedand

its subsidiaries as at 31 December 2009 and 2008, the related consolidated statements of income, changes in

shareholders’equityandcash flows for theyears thenended,and theseparate financialstatementsofThanachartBank

PublicCompanyLimitedforthesameperiods.Thesefinancialstatementsaretheresponsibilityofthemanagementofthe

Bankanditssubsidiariesastotheircorrectnessandthecompletenessofthepresentation.Myresponsibilityistoexpress

anopiniononthesefinancialstatementsbasedonmyaudits.

Iconductedmyaudits inaccordancewithgenerallyacceptedauditingstandards.Thosestandards require that

Iplanandperform theaudits toobtain reasonableassuranceaboutwhether the financialstatementsare freeofmaterial

misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the

financialstatements.Anauditalso includesassessing theaccountingprinciplesusedandsignificantestimatesmadeby

management, as well as evaluating the overall financial statement presentation. I believe that my audits provide

areasonablebasisformyopinion.

Inmyopinion,thefinancialstatementsreferredtoabovepresentfairly,inallmaterialrespects,thefinancialposition

ofThanachartBankPublicCompanyLimitedanditssubsidiariesandofThanachartBankPublicCompanyLimitedasat31

December2009and2008,andtheresultsoftheiroperationsandcashflowsfortheyearsthenendedinaccordancewith

generallyacceptedaccountingprinciples.

Ratana Jala

CertifiedPublicAccountant(Thailand)No.3734

Ernst&YoungOfficeLimited

Bangkok:24February2010



Thanachart Bank Public Company Limited and its subsidiariesBalance sheetsAs at 31 December 2009 and 2008

(Unit: Baht)

Note 2009 2008 2009 2008AssetsCash 3,665,369,936 4,017,954,398 3,664,865,336 4,017,430,303 Interbank and money market items 6 Domestic Interest bearing 53,134,784,209 40,959,771,517 52,548,012,959 39,046,395,525 Non-interest bearing 3,707,561,088 3,875,410,865 3,577,499,306 3,776,554,928 Foreign Interest bearing 7,571,684,915 20,372,080,617 7,571,684,915 20,372,080,617 Non-interest bearing 331,088,960 495,714,325 331,088,960 495,714,325 Total interbank and money market items - net 64,745,119,172 65,702,977,324 64,028,286,140 63,690,745,395 Investments Current investments - net 7 23,021,885,958 6,927,882,970 18,988,981,897 4,276,135,274 Long-term investments - net 7 54,319,529,700 22,700,626,160 41,172,231,247 17,828,463,614 Investments in subsidiary companies 8 - - 4,481,643,114 4,481,643,114 Investments in an associated company 9 1,260,634,745 1,083,135,083 - - Net investments 78,602,050,403 30,711,644,213 64,642,856,258 26,586,242,002 Receivables from clearing house 429,219,703 50,185,586 - - Loans and accrued interest receivables 10 Loans 283,570,514,879 274,034,052,128 282,576,806,903 272,925,468,442 Securities business receivables 1,944,658,101 2,107,940,234 - - Total loans and receivables 285,515,172,980 276,141,992,362 282,576,806,903 272,925,468,442 Accrued interest receivables 277,032,572 287,850,610 282,231,389 302,482,037 Total loans and accrued interest receivables 285,792,205,552 276,429,842,972 282,859,038,292 273,227,950,479 Less: Allowance for doubtful accounts 11 (8,363,387,501) (7,066,943,508) (7,717,512,778) (6,365,168,503) Revaluation allowance for debt restructuring 12 (33,149,854) (19,963,190) (33,149,854) (19,963,190) Net loans and accrued interest receivables 277,395,668,197 269,342,936,274 275,108,375,660 266,842,818,786 Property foreclosed - net 14 912,078,382 1,600,485,678 895,221,052 1,541,311,290 Land, premises and equipment - net 15 2,211,400,055 2,310,543,615 1,950,185,750 2,014,653,535 Intangible assets - software - net 16 473,998,661 416,748,531 431,337,359 377,231,891 Financial derivatives assets 956,688,110 1,369,064,034 956,688,110 1,369,064,034 Other assets - net 17 3,578,137,541 2,778,933,245 2,200,372,905 1,775,114,647 Total assets 432,969,730,160 378,301,472,898 413,878,188,570 368,214,611,883

The accompanying notes are an integral part of the financial statements.

Consolidatedfinancial statements

Separate financial statements

BALANCE SHEETS Thanachart Bank Public Company Limited and its subsidiaries

As at 31 December 2009 and 2008




Thanachart Bank Public Company Limited and its subsidiariesBalance sheets (continued)As at 31 December 2009 and 2008

(Unit: Baht)

Note 2009 2008 2009 2008Liabilities and shareholders' equityDeposits 18 Deposits in Baht 266,206,035,990 270,092,868,130 266,637,368,740 270,761,410,331 Deposits in foreign currencies 89,953,995 70,367,617 89,953,995 70,367,617 Total deposits 266,295,989,985 270,163,235,747 266,727,322,735 270,831,777,948 Interbank and money market items 19 Domestic Interest bearing 15,305,183,188 6,677,346,941 16,484,109,167 7,030,389,032 Non-interest bearing 430,964,353 607,106,923 478,023,697 631,885,020 Foreign Interest bearing 5,193,820,752 - 5,193,820,752 - Non-interest bearing 8,822,437 6,450,786 8,822,437 6,450,786 Total interbank and money market items 20,938,790,730 7,290,904,650 22,164,776,053 7,668,724,838 Payable to clearing house 95,690,201 294,804,300 - - Securities business payable 1,035,955,112 854,589,048 - - Liability payable on demand 2,111,811,444 1,316,693,276 2,111,811,444 1,316,693,276 Borrowings 20 Short-term borrowings 75,200,199,414 47,079,799,561 75,936,199,414 47,928,299,561 Long-term borrowings 15,000,000,000 14,070,000,000 15,000,000,000 14,360,000,000 Total borrowings 90,200,199,414 61,149,799,561 90,936,199,414 62,288,299,561 Accrued interest payable 1,019,602,377 1,720,880,715 1,029,409,498 1,735,303,962 Unearned premium reserve 1,354,934,243 1,465,630,973 - - Life premium reserve 15,286,244,129 7,821,623,453 - - Corporate income tax payable 1,257,219,624 125,290,774 1,138,356,145 - Accrued expenses 1,651,005,632 1,057,044,647 799,519,349 594,392,205 Financial derivatives liabilities 24,227,749 296,261,316 24,227,749 296,261,316 Other liabilities 21 3,825,976,723 3,403,617,685 2,591,327,676 2,212,788,960 Total liabilities 405,097,647,363 356,960,376,145 387,522,950,063 346,944,242,066


Consolidated Separate financial statementsfinancial statements

Thanachart Bank Public Company Limited and its subsidiaries



BALANCE SHEETS (CONTINUED)



Thanachart Bank Public Company Limited and its subsidiariesBalance sheets (continued)As at 31 December 2009 and 2008

(Unit: Baht)

Note 2009 2008 2009 2008Shareholders’ equityShare capital 22 Registered 5,934,619,272 ordinary shares of Baht 10 each (2008 : 2,134,619,292 ordinary shares of Baht 10 each) 59,346,192,720 21,346,192,920 59,346,192,720 21,346,192,920 Issued and paid-up share capital 1,934,619,272 ordinary shares of Baht 10 each (2008 : 1,734,619,292 ordinary shares of Baht 10 each) 19,346,192,720 17,346,192,920 19,346,192,720 17,346,192,920 Share premium 2,100,694,232 2,100,694,232 2,100,694,232 2,100,694,232 Revaluation surplus on investments 23 764,523,022 321,677,996 405,976,013 242,692,625 Revaluation deficit on investments 23 (381,254,880) (1,387,121,442) (192,282,442) (537,861,364) Surplus from business combination under common control (123,378,934) (123,378,934) - - Retained earnings Appropriated - statutory reserve 24 370,018,647 192,648,978 370,018,647 192,648,978 Unappropriated 5,734,597,426 2,827,480,089 4,324,639,337 1,926,002,426 Equity attributable to the Bank’s shareholders 27,811,392,233 21,278,193,839 26,355,238,507 21,270,369,817 Minority interest - equity attributable to minority shareholders of subsidiaries 60,690,564 62,902,914 - - Total shareholders’ equity 27,872,082,797 21,341,096,753 26,355,238,507 21,270,369,817 Total liabilities and shareholders’ equity 432,969,730,160 378,301,472,898 413,878,188,570 368,214,611,883

Off-balance sheet items - commitments 36.1Aval to bills 296,250,634 118,025,575 296,250,634 118,025,575 Liability under unmatured import bills 87,557,302 442,517,702 87,557,302 442,517,702 Letter of credits 1,009,878,320 664,174,238 1,009,878,320 664,174,238 Other commitments 91,880,759,854 86,515,586,525 91,215,659,854 85,870,136,525


financial statementsSeparate

financial statementsConsolidated




BALANCE SHEETS (CONTINUED)



Thanachart Bank Public Company Limited and its subsidiariesIncome statements For the years ended 31 December 2009 and 2008

(Unit: Baht)

Note 2009 2008 2009 2008Interest and dividend incomeLoans 3,894,437,990 4,098,944,380 3,950,430,013 4,228,235,051 Interbank and money market items 1,046,377,411 1,560,373,020 1,022,271,782 1,511,618,302 Hire purchase and financial lease 14,984,438,959 13,785,249,666 14,354,491,178 13,063,100,782 Investments 1,545,169,356 1,242,938,651 1,606,666,660 1,093,672,064 Total interest and dividend income 21,470,423,716 20,687,505,717 20,933,859,633 19,896,626,199 Interest expensesDeposits 4,872,643,138 7,031,405,854 4,880,086,193 7,046,294,803 Interbank and money market items 119,955,195 184,099,419 140,682,929 191,132,692 Short-term borrowings 964,449,992 1,501,767,160 982,774,585 1,496,998,818 Long-term borrowings 779,106,375 680,371,227 787,377,649 694,033,556 Total interest expenses 6,736,154,700 9,397,643,660 6,790,921,356 9,428,459,869 Net interest and dividend income 14,734,269,016 11,289,862,057 14,142,938,277 10,468,166,330 Bad debts and doubtful accounts 27 (3,054,400,164) (3,954,737,499) (2,785,940,992) (3,538,740,996) Loss on debt restructuring (52,979,637) (13,351,891) (44,197,921) (8,887,990) Net interest and dividend income after bad debts and doubtful accounts and loss on debt restructuring 11,626,889,215 7,321,772,667 11,312,799,364 6,920,537,344 Non-interest incomeBrokerage fees 885,292,839 756,390,129 - - Loss on investments 28 (222,068,721) (419,893,430) (56,677,509) (205,721,519) Share of income from investment in an associated company 129,486,348 153,064,461 - - Fees and service income Acceptances, aval and guarantees 40,507,881 34,500,005 40,507,881 34,500,005 Others 2,066,334,937 2,056,308,540 1,777,721,827 1,629,226,182 Gain on exchanges and financial derivatives contracts 147,882,056 222,700,412 147,882,056 222,732,024 Gain (loss) on disposal of property foreclosed and other assets 29 130,968,930 (85,154,344) 127,278,138 (83,656,567) Insurance premium/Life insurance premium income 14,466,531,929 7,342,635,671 - - Income on supporting service 76,881,055 143,101,123 232,469,716 291,491,983 Other income 680,743,069 411,577,164 545,470,849 313,633,302 Total non-interest income 18,402,560,323 10,615,229,731 2,814,652,958 2,202,205,410


Consolidated Separatefinancial statements financial statements

INCOME STATEMENTS Thanachart Bank Public Company Limited and its subsidiaries

For the years ended 31 December 2009 and 2008




Thanachart Bank Public Company Limited and its subsidiariesIncome statements (continued)For the years ended 31 December 2009 and 2008

(Unit: Baht)

Note 2009 2008 2009 2008Non-interest expensesPersonnel expenses 4,339,984,300 3,576,094,519 3,328,333,401 2,645,032,328 Premises and equipment expenses 1,810,850,140 1,565,770,680 1,514,456,361 1,255,641,509 Taxes and duties 197,512,647 200,288,283 182,747,200 189,075,951 Fees and charges 784,423,126 259,541,542 50,327,266 55,029,352 Directors’ remuneration 30 23,015,094 21,217,662 14,602,094 14,642,663 Contribution fee to the Financial Institutions Development Fund/Deposit Protection Agency 1,072,378,634 822,569,724 1,072,378,634 822,569,724 Insurance/Life insurance expenses 12,533,227,744 5,815,964,410 - - Other expenses 3,415,794,841 3,188,814,001 2,962,094,800 2,722,510,549 Total non-interest expenses 24,177,186,526 15,450,260,821 9,124,939,756 7,704,502,076 Income before corporate income tax 5,852,263,012 2,486,741,577 5,002,512,566 1,418,240,678 Corporate income tax 31 (1,768,591,642) (688,290,185) (1,455,119,182) (215,810,210) Corporate income tax refundable 31 - 101,889,524 - 101,889,524 Net income for the year 4,083,671,370 1,900,340,916 3,547,393,384 1,304,319,992

Net income attributable toThe Bank 4,055,873,810 1,869,500,168 3,547,393,384 1,304,319,992 Minority interests of the subsidiaries 27,797,560 30,840,748 - -

4,083,671,370 1,900,340,916 3,547,393,384 1,304,319,992

Earnings per share 32Basic earnings per share 2.19 1.08 1.91 0.75

Weighted average number of ordinary shares (shares) 1,853,523,390 1,734,619,292 1,853,523,390 1,734,619,292


financial statements financial statementsSeparateConsolidated

INCOME STATEMENTS (CONTINUED) Thanachart Bank Public Company Limited and its subsidiaries





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(99

0,099

,108)

-

-

-

-

(990,0

99,10

8)

Inc

ome (

expen

ses) re

cogn

ised d

irectly

in eq

uity-

-

22

1,509

,690

(990,0

99,10

8)

-

-

-

-

(76

8,589

,418)

Net in

come

for th

e yea

r-

-

-

-

-

-

1,8

69,50

0,168

30

,840,7

48

1,900

,340,9

16

Total

incom

e (exp

enses

) for th

e yea

r-

-

22

1,509

,690

(990,0

99,10

8)

-

-

1,8

69,50

0,168

30

,840,7

48

1,131

,751,4

98

Divide

nd pa

id (No

te 26

)-

-

-

-

-

-

(74

5,886

,296)

-

(745,8

86,29

6)

Tra

nsfer

to sta

tutory

reser

ve (No

te 24

)-

-

-

-

-

65

,215,9

99

(65,21

5,999

)

-

-

De

crease

in min

ority i

nteres

t - eq

uity at

tributa

ble to

m

inority

share

holde

rs of

subsid

iaries

-

-

-

-

-

-

-

(24,99

2,831

)

(24

,992,8

31)

Balan

ce -

as at

31 D

ecem

ber 2

008

17,34

6,192

,920

2,1

00,69

4,232

32

1,677

,996

(1,38

7,121

,442)

(12

3,378

,934)

192,6

48,97

8

2,8

27,48

0,089

62

,902,9

14

21,34

1,096

,753

Balan

ce -

as at

1 Ja

nuary

2009

17,34

6,192

,920

2,1

00,69

4,232

32

1,677

,996

(1,38

7,121

,442)

(12

3,378

,934)

192,6

48,97

8

2,8

27,48

0,089

62

,902,9

14

21,34

1,096

,753

Inc

rease

from

share

capit

al issu

ance

(Note

22)

1,999

,999,8

00

-

-

-

-

-

-

-

1,999

,999,8

00

Increa

se in r

evalua

tion su

rplus

on inv

estme

nts-

-

44

2,845

,026

-

-

-

-

-

442,8

45,02

6

De

crease

in rev

aluatio

n defic

it on in

vestm

ents

-

-

-

1,005

,866,5

62

-

-

-

-

1,005

,866,5

62

Incom

e rec

ognis

ed di

rectly

in equ

ity-

-

44

2,845

,026

1,005

,866,5

62

-

-

-

-

1,448

,711,5

88

Net in

come

for th

e yea

r-

-

-

-

-

-

4,0

55,87

3,810

27

,797,5

60

4,083

,671,3

70

Total

incom

e for

the ye

ar-

-

44

2,845

,026

1,005

,866,5

62

-

-

4,055

,873,8

10

27,79

7,560

5,5

32,38

2,958

Div

idend

paid

(Note

26)

-

-

-

-

-

-

(971,3

86,80

4)

-

(97

1,386

,804)

Transf

er to

statut

ory re

serve

(Note

24)

-

-

-

-

-

177,3

69,66

9

(17

7,369

,669)

-

-

Decre

ase in

minori

ty inte

rest -

equity

attrib

utable

to

mino

rity sh

areho

lders

of sub

sidiar

ies-

-

-

-

-

-

-

(30

,009,9

10)

(30,00

9,910

)

Ba

lance

- as

at 31

Dec

embe

r 200

919

,346,1

92,72

0

2,100

,694,2

32

764,5

23,02

2

(38

1,254

,880)

(123,3

78,93

4)

37

0,018

,647

5,734

,597,4

26

60,69

0,564

27

,872,0

82,79

7

-

The a

ccom

panyi

ng no

tes ar

e an in

tegral

part o

f the f

inanc

ial sta

temen

ts.

Retai

ned e

arning

s

Conso

lidated

finan

cial st

ateme

nt s

The

acco

mpa

nyin

g no

tes

are

an in

tegr

al p

art o

f the

fina

ncia

l sta

tem

ents

.

STAT

EMEN

TS O

F CH

ANG

ES IN

SHA

REHO

LDER

S’ E

QUI

TYTh

anac

hart

Bank

Pub

lic C

ompa

ny L

imite

d an

d its

sub

sidi

arie

s

For t

he y

ears

end

ed 3

1 D

ecem

ber 2

009

and

2008



Than

acha

rt Ban

k Pub

lic Co

mpan

y Lim

ited a

nd its

subs

idiari

es

Statem

ents

of ch

ange

s in s

hareh

olders

' equ

ity (c

ontin

ued)

For th

e yea

rs en

ded 3

1 Dec

embe

r 200

9 and

2008

(Unit: B

aht)

Issue

d and

Re

valua

tionRe

valua

tionpa

id-up

surplu

s on

defici

t on

Appro

priate

d -sh

are ca

pital

Share

prem

iuminv

estme

ntsinv

estm

ents

statut

ory re

serve

Unap

propri

ated

Total

Balan

ce -

as at

1 Ja

nuary

2008

17,34

6,192

,920

2,1

00,69

4,232

70,77

5,754

(38

2,732

,553)

127,4

32,97

9

1,432

,784,7

29

20

,695,1

48,06

1

Increa

se in r

evalua

tion su

rplus

on in

vestm

ents

-

-

171,9

16,87

1

-

-

-

171,9

16,87

1

Increa

se in r

evalua

tion de

ficit o

n inves

tmen

ts-

-

-

(15

5,128

,811)

-

-

(155,1

28,81

1)

Inc

ome (

expen

ses) re

cogn

ised d

irectly

in eq

uity-

-

17

1,916

,871

(15

5,128

,811)

-

-

16,78

8,060

Ne

t inco

me fo

r the y

ear

-

-

-

-

-

1,304

,319,9

92

1,3

04,31

9,992

Total

incom

e (exp

enses

) for th

e yea

r-

-

17

1,916

,871

(15

5,128

,811)

-

1,304

,319,9

92

1,3

21,10

8,052

Divide

nd pa

id (No

te 26

)-

-

-

-

-

(74

5,886

,296)

(745,8

86,29

6)

Tra

nsfer

to sta

tutory

rese

rve (N

ote 24

)-

-

-

-

65

,215,9

99

(65,21

5,999

)

-

Balan

ce -

as at

31 D

ecem

ber 2

008

17,34

6,192

,920

2,1

00,69

4,232

242,6

92,62

5

(537,8

61,36

4)

19

2,648

,978

1,9

26,00

2,426

21,27

0,369

,817

Balan

ce -

as at

1 Ja

nuary

2009

17,34

6,192

,920

2,1

00,69

4,232

242,6

92,62

5

(537,8

61,36

4)

19

2,648

,978

1,9

26,00

2,426

21,27

0,369

,817

Inc

rease

from

share

capit

al issu

ance

(Note

22)

1,999

,999,8

00

-

-

-

-

-

1,9

99,99

9,800

Increa

se in r

evalua

tion su

rplus

on in

vestm

ents

-

-

163,2

83,38

8

-

-

-

163,2

83,38

8

Decre

ase in

reval

uation

defici

t on in

vestm

ents

-

-

-

345,5

78,92

2

-

-

345,5

78,92

2

Incom

e rec

ognis

ed di

rectly

in equ

ity-

-

16

3,283

,388

34

5,578

,922

-

-

50

8,862

,310

Ne

t inco

me fo

r the y

ear

-

-

-

-

-

3,547

,393,3

84

3,5

47,39

3,384

Total

incom

e for

the ye

ar-

-

16

3,283

,388

34

5,578

,922

-

3,5

47,39

3,384

4,056

,255,6

94

Div

idend

paid

(Note

26)

-

-

-

-

-

(971,3

86,80

4)

(97

1,386

,804)

Transf

er to

statut

ory re

serve

(Note

24)

-

-

-

-

177,3

69,66

9

(177,3

69,66

9)

-

Ba

lance

- as

at 31

Dec

embe

r 200

919

,346,1

92,72

0

2,100

,694,2

32

40

5,976

,013

(19

2,282

,442)

370,0

18,64

7

4,324

,639,3

37

26

,355,2

38,50

7

-

The a

ccom

panyi

ng no

tes ar

e an in

tegral

part o

f the f

inanc

ial sta

temen

ts.

Retain

ed ea

rning

sSe

parat

e fina

ncial

statem

ents

STAT

EMEN

TS O

F CH

ANG

ES IN

SHA

REHO

LDER

S’ E

QUI

TY (C

ONT

INUE

D)Th

anac

hart

Bank

Pub

lic C

ompa

ny L

imite

d an

d its

sub

sidi

arie

s

For t

he y

ears

end

ed 3

1 D

ecem

ber 2

009

and

2008

The

acco

mpa

nyin

g no

tes

are

an in

tegr

al p

art o

f the

fina

ncia

l sta

tem

ents

.



Thanachart Bank Public Company Limited and its subsidiariesStatements of cash flowsFor the years ended 31 December 2009 and 2008

(Unit: Baht)

2009 2008 2009 2008Cash flows from operating activitiesNet income before corporate income tax 5,852,263,012 2,486,741,577 5,002,512,566 1,418,240,678 Adjustments to reconcile net income before corporate income tax to net cash provided by (paid from) operating activities Share of income from investment in an associated company (129,486,348) (153,064,461) - - Depreciation and amortisation 653,786,803 537,616,314 548,574,414 436,415,336 Bad debt and doubtful accounts and loss from debt restructuring 3,107,379,801 3,968,089,390 2,830,138,913 3,547,628,986 Amortisation of premiums on investment in debt securities 14,549,519 22,733,675 12,620,274 31,921,594 Increase (decrease) in allowance for impairment/ change in value of investments (223,661,179) 242,355,999 (102,529,380) 97,928,341 Increase (decrease) in allowance for impairment of property foreclosed (116,774,655) 68,770,822 (112,336,667) 64,229,815 Increase in allowance for impairment of land, premises and equipment 1,189,945 - 1,189,945 - Interest income and other income from the assets transferred for debt repayment (7,016,161) (901,161) (7,016,160) (901,161) Loss from disposal of equipment 20,938,211 13,745,764 17,237,124 15,501,581 Unrealised loss (gain) on exchange 333,271,072 (643,505,800) 333,271,072 (643,505,800) Gain from sales of investment in an associated company (2,707,057) - - - Increase in unearned premium reserve/ life insurance premium reserve 7,353,923,946 2,486,435,257 - - Increase (decrease) in allowance for impairment of other assets (4,765,620) 49,346,414 (9,023,005) 54,566,116 Decrease (increase) in other income receivable 270,448,251 106,942,222 (6,985,712) 882,904 Decrease in fees and rental received in advance (38,525,672) (33,582,819) (38,525,672) (33,582,819) Decrease in amortisation of deferred income (7,755,656) (5,143,846) (7,755,656) (5,143,846) Increase in accrued expenses 593,960,985 16,522,812 205,127,143 42,755,467 Amortisation of discounts on borrowings 17,951,490 8,970,781 17,951,490 8,970,781

17,688,970,687 9,172,072,940 8,684,450,689 5,035,907,973


financial statementsConsolidated Separate

financial statements


STATEMENTS OF CASH FLOWS Thanachart Bank Public Company Limited and its subsidiaries




STATEMENTS OF CASH FLOWS (CONTINUED) Thanachart Bank Public Company Limited and its subsidiaries

Statements of cash flows (continued)For the years ended 31 December 2009 and 2008

(Unit: Baht)

2009 2008 2009 2008Net interest income (14,766,770,025) (11,321,566,513) (14,173,510,041) (10,509,058,705) Cash received from interest income 20,049,896,538 19,391,027,793 19,458,845,721 18,728,689,725 Cash paid for interest expenses (5,496,149,867) (6,833,501,916) (5,524,726,981) (6,854,165,892) Income from operating activities before changes in operating assets and liabilities 17,475,947,333 10,408,032,304 8,445,059,388 6,401,373,101 Decrease (increase) in operating assets Interbank and money market items 741,246,507 (25,562,406,808) (577,222,786) (24,908,365,594) Securities purchased under resale agreements - 2,500,000,000 - 2,500,000,000 Investments in trading securities (1,026,138,305) - (754,000,000) - Receivables from clearing house (379,034,117) 193,384,774 - - Loans and receivables (17,533,673,677) (55,422,256,866) (17,109,234,579) (55,467,585,938) Property foreclosed 7,204,060,108 5,922,657,239 6,794,205,425 5,604,349,821 Other assets (829,542,383) 261,816,033 (226,944,465) 182,573,703 Increase (decrease) in operating liabilities Deposits (3,867,245,762) 81,503,061,760 (4,104,455,214) 81,745,502,029 Interbank and money market items 13,647,886,080 3,582,088,750 14,496,051,216 3,863,283,572 Payable to clearing house (199,114,099) 294,804,300 - - Securities business payable 181,366,064 (389,330,350) - - Liability payable on demand 795,118,168 (12,334,058) 795,118,168 (12,334,058) Other liabilities 160,863,761 424,344,503 84,542,349 173,466,456 Cash flows from operating activities 16,371,739,678 23,703,861,581 7,843,119,502 20,082,263,092 Cash paid for corporate income tax (691,991,905) (845,423,002) (316,445,244) (263,007,207) Cash received from corporate income tax refundable - 101,889,524 - 101,889,524 Net cash flows from operating activities 15,679,747,773 22,960,328,103 7,526,674,258 19,921,145,409 Cash flows from investing activitiesIncrease in investments in securities held for investments (45,258,494,757) (8,877,808,522) (36,721,147,741) (6,919,843,145) Payment to acquire investments in subsidiaries - - - (431,140,884) Cash received from sales of investments in an associated company 84,304,975 - - - Capital returned from subsidiaries - - - 244,355,148 Cash received from interest on investments 1,269,867,800 989,976,838 988,573,467 755,736,635 Cash received from dividend 105,575,377 237,371,734 514,314,466 342,173,727 Cash received from dividend from an associated company 82,633,650 81,202,800 - - Cash paid for purchase of equipment (420,595,469) (572,898,274) (359,921,050) (489,576,461) Cash received from disposal of equipment 6,737,628 9,656,408 4,598,829 1,846,835 Net cash flows used in investing activities (44,129,970,796) (8,132,499,016) (35,573,582,029) (6,496,448,145)


financial statementsSeparate

financial statementsConsolidated






STATEMENTS OF CASH FLOWS (CONTINUED) Thanachart Bank Public Company Limited and its subsidiaries

Statements of cash flows (continued)For the years ended 31 December 2009 and 2008

(Unit: Baht)

2009 2008 2009 2008Cash flows from financing activitiesCash received from issued additional share capital 1,999,999,800 - 1,999,999,800 - Cash received from borrowings 225,125,643,598 150,844,877,018 225,329,643,598 152,054,877,018 Cash paid for borrowings (196,093,195,235) (161,907,015,392) (196,699,695,235) (161,733,515,392) Cash paid for interest from borrowings (1,933,412,888) (2,251,463,862) (1,964,218,555) (2,257,086,374) Dividend paid (971,386,804) (745,886,296) (971,386,804) (745,886,296) Dividend paid from a subsidiary company to minority interest (30,009,910) (24,992,831) - - Net cash flows from (used in) financing activities 28,097,638,561 (14,084,481,363) 27,694,342,804 (12,681,611,044) Net increase (decrease) in cash (352,584,462) 743,347,724 (352,564,967) 743,086,220 Cash at beginning of the year 4,017,954,398 3,274,606,674 4,017,430,303 3,274,344,083 Cash at end of the year 3,665,369,936 4,017,954,398 3,664,865,336 4,017,430,303

Supplemental cash flows informationNon-cash transactions Transfer of properties foreclosed from receivables for debt settlement 6,383,809,740 6,154,566,145 6,020,710,103 5,790,320,145 Accounts payable for purchase of fixed assets 70,769,444 151,706,930 66,759,930 143,841,708 Bad debt written-off 1,866,310,926 1,772,468,873 1,503,618,608 1,525,490,095


Separate financial statementsfinancial statements

Consolidated






NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. General information

1


Notes to consolidated financial statements


1. General information

Thanachart Bank Public Company Limited (“the Bank”) was incorporated as a public limited company under Thai laws and its parent company is Thanachart Capital Public Company Limited (herein after referred to as “the Parent company”), a public limited company also existing under Thai laws. As at 31 December 2009, the Parent Company holds 50.92 percent of the Bank issued shares (as at 31 December 2008, the Parent company held 74.93 percent of the Bank issued shares, and on 3 February 2009, the Parent company sold additional ordinary shares of the Bank to the Bank of Nova Scotia (“BNS”). As a result, BNS holds 48.998 percent and the Parent company holds 50.92 percent of the Bank issued shares). The Bank’s registered address is 900, Tonson Tower, Ploenchit Road, Lumpini, Pathumwan, Bangkok and the Bank has 256 operational branches. All subsidiaries are registered limited or public limited companies under Thai laws and operate their businesses in Thailand. The subsidiaries businesses include securities business, leasing and hire purchase business, non-life insurance business, life insurance business, fund management business, and others.

2. Basis of preparation of financial statements

2.1 The financial statements have been prepared in accordance with accounting standards enunciated under the Accounting Professions Act B.E. 2547, with reference to the principles stipulated by the Bank of Thailand (“BOT”). The presentation of the financial statements has been made in compliance with the Notification of the BOT relating to the preparation and format of the financial statements of commercial banks and holding parent company of financial business groups, dated 3 August 2008.

The financial statements in Thai language are the official statutory financial statements of the Bank. The financial statements in English language have been translated from the Thai language financial statements. The financial statements have been prepared on a historical cost basis except where otherwise disclosed in the accounting policies.

2.2 Basis of preparation of the consolidated financial statements

a) The consolidated financial statements include the financial statements of the Bank and the following subsidiary companies (“the subsidiaries”):

Percentage of shareholding 2009 2008

Subsidiaries directly held by the Bank Thanachart Securities Plc. 100.00 100.00 Thanachart Insurance Co., Ltd. 100.00 100.00 Thanachart Life Assurance Co., Ltd. 100.00 100.00 Thanachart Fund Management Co., Ltd. 75.00 75.00 Thanachart Broker Co., Ltd. 100.00 100.00 Thanachart Group Leasing Co., Ltd. 100.00 100.00 Thanachart Management and Services Co., Ltd. 100.00 100.00 Thanachart Legal and Appraisal Co., Ltd. 100.00 100.00 Thanachart Training and Development Co., Ltd. 100.00 100.00 T Leasing Co., Ltd. 100.00 100.00 Subsidiaries indirectly held by the Bank National Leasing Co., Ltd. 100.00 100.00

2. Basis of preparation of financial statements





2

Total assets and total income of the subsidiaries that have significant impact to and are included in the consolidated financial statements as at 31 December 2009 and 2008 and for the years then ended, after eliminating significant inter company transactions, are as follows:

(Unit: Million Baht)

Total assets Total income for the years 2009 2008 2009 2008 Thanachart Life Assurance Co., Ltd. 16,195 7,488 12,021 4,999 Thanachart Group Leasing Co., Ltd. 2,713 4,187 452 547 Thanachart Securities Plc. 3,082 3,087 1,131 939 Thanachart Insurance Co., Ltd. 3,217 2,676 2,740 2,590

b) Subsidiaries are fully consolidated as from the date of acquisition, being the date on which the Bank obtains control.

c) The financial statements of the subsidiaries are prepared for the same reporting period as the Bank, using consistent significant accounting policies. In case where there are different accounting policies the Bank has adjusted the effect of these in the consolidated financial statements.

d) The outstanding balances and significant intercompany transactions between the Bank and its subsidiaries have been eliminated in the consolidated financial statements. The investments in subsidiaries as recorded in the Bank’s and subsidiaries’ books of accounts have been eliminated against shareholders’ equity of the subsidiaries.

e) Minority interests represent the portion of net income or loss and net assets of the subsidiaries that are not held by the Bank and are presented separately in the consolidated income statements and within equity in the consolidated balance sheet.

2.3 The separate financial statements, which present investments in subsidiaries under the cost method, have been prepared solely for the benefit of the public.

3. Adoption of new accounting standards

In June 2009, the Federation of Accounting Professions issued Notification No. 12/2552, assigning new numbers to Thai Accounting Standards that match the corresponding International Accounting Standards. The numbers of Thai Accounting Standards as referred to in these financial statements reflect such change. The Federation of Accounting Professions has issued Notification No. 86/2551 and 16/2552, mandating the use of new accounting standards, financial reporting standard and accounting treatment guidance as follows.

3.1 Accounting standards, financial reporting standard and accounting treatment guidance which are effective for the current year Framework for Preparation and Presentation of Financial Statements TAS 36 Impairment of Assets TFRS 5 Non-current Assets Held for Sale and Discontinued Operations Accounting Treatment Guidance for Leasehold Right Accounting Treatment Guidance for Business Combination under Common Control These accounting standards, financial reporting standard and accounting treatment guidance became effective for the financial statements for fiscal year beginning on or after 1 January 2009. The management of the Bank and its subsidiaries have assessed the effect of these standards and noted that Accounting Treatment Guidance for Business Combination under Common Control and TFRS 5 are not relevant to the business of the Bank and its subsidiaries, while the remaining accounting standards do not have any significant impact on the financial statements for the current year.

3. Adoption of new accounting standards



3

3.2 Accounting standards which are not effective for the current year Effective date

TAS 20 Accounting for Government Grants 1 January 2012 and Disclosure of Government Assistance

TAS 24 Related Party Disclosures 1 January 2011 TAS 40 Investment Property 1 January 2011 However, TAS 24 and TAS 40 allow early adoption by the entity before the effective date. The management of the Bank and its subsidiaries has assessed the effect of these standards and believe that TAS 20 is not relevant to the business of the Bank and its subsidiaries, while TAS 24 and TAS 40 will not have any significant impact on the financial statements for the year in which they are initially applied.

4. Significant accounting policies

4.1 Revenue recognition

a) Interest and discounts on loans Interest on loan is recognised as income on an accrual basis, based on the amount of principal outstanding. Interest on hire purchase and financial lease is recognised on the effective interest rate. For loans on which principal or interest payments have been defaulted for more than three months past the due date, the Bank and its subsidiaries cease accrual of interest income, and accrued interest already recorded is reversed from the Bank and its subsidiaries’ accounts. Interest is then recognised as income on a cash basis until settlement of such overdue balance has been received from the debtors. Interest income on restructured loans is recognised as income on an accrual basis, with reference to the interest rate stipulated in the agreements, with the exception of interest on loans that are subject to monitoring for compliance with restructuring conditions, which the Bank and its subsidiaries recognise as income on a cash basis until the receivable is able to comply with the restructuring conditions for a period of no less than three months or three installments, whichever is longer. Interest or discounts already included in the face value of notes receivable or loans are recorded as deferred interest and taken up as income evenly throughout the term of the notes or loans or in proportion of debt repayment. Deferred interest income on hire purchase represents discounted on interest given to debtors by dealers, is recognised based on the effective interest method, in the same manner as interest income recognition on hire purchase receivables.

b) Interest and dividends on investments Interest on investments is recognised as income on an accrual basis based on the effective interest rate. Dividends are recognised as income when the right to receive the dividend is established.

c) Brokerage fee income Brokerage fee charged on securities trading are recognised as income on the transaction date.

d) Interest on loans for purchase of securities Interest on loans for purchases of securities is recognised as income over the term of the loans based on the amount of principal outstanding. The subsidiary company ceases accruing interest for certain loans that fall under the conditions set by the Securities and Exchange Commission (“SEC”).

e) Gains (losses) on investments and derivatives Gains (losses) on investments and derivatives are recognised as income/expenses on the transaction dates.

4. Significant accounting policies



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f) Fees and service income Fees and service income are recognised as income on an accrual basis.

g) Insurance/life insurance premium income Non-life insurance business Insurance premium income on insurance policies is recognised on the date the insurance policy comes into effect, after deducting premium ceded and refunded for insurance policies with coverage periods of up to 1 year. For long-term insurance policies with coverage periods of longer than 1 year, related revenues and expenses are recorded as unearned and prepaid items, and amortised to income and expenses over the coverage period. Insurance premium income is recognised after deducting unearned premium reserve. Reinsurance premium income is recognised when the reinsurer places the reinsurance application or statement of accounts. Life insurance business Premium income is recognised as income when underwriting of the insurance is approved, after deducting premium ceded and refunded. Premium due and uncollected at the end of year is recognised as revenue only if the policy is still in force, and is calculated based on the average persistency rate.

4.2 Expenses recognition

a) Interest expenses Interest expenses are charged to expenses on an accrual basis. Interest on notes payable included in the face value is recorded as deferred interest and amortised to expenses evenly throughout the term of the notes.

b) Commission and expenses charged on hire purchase/financial leases For hire purchase/financial lease contracts originating on or after 1 January 2007, initial direct expenses

at the inception of a hire purchase/financial lease contract (i.e. commission expenses and stamp duty expenses) are to be deferred and amortised using the effective interest method, with amortisation deducted from interest income throughout the contract period, in order to reflect the effective rate of return on the contracts. Unearned income on hire purchase/financial leases is presented net of commission expenses and initial direct cost on the inception of the contracts.

4.3 Unearned premium/life insurance premium reserve

Non-life insurance business Unearned premium reserve of a subsidiary company is set aside in compliance with the Notification of the Ministry of Commerce regarding the appropriation of unearned premium reserve as follows:

Fire, marine (hull), motors and miscellaneous - Monthly average basis (except for traveling accident with coverage of not more (the one-twenty fourth basis) than 6 months) Marine and transportation (cargo) - Net premium written for the last ninety days Traveling accident with coverage of not more than 6 months - Net premium written for the last thirty days



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Life insurance business Life assurance policy reserve represents the accumulated total liability for policies in force on the balance sheet date. Life assurance policy reserve is calculated according to the procedures prescribed by the Regulation on Life Assurance Policy Reserve as promulgated by the Ministry of Commerce on 23 November 2001. The liability is based on assumptions established at inception of the contract. A subsidiary company base mortality and morbidity tables announced by the Office of Insurance Commission which reflect historical experiences. a) Reserve for insurance policies of over 1 year is determined using the fractional reserve method. b) For accident and group insurance of 1 year or less, unearned premium reserve is set aside at the full

amount of unearned premium, and the period of coverage. 4.4 Investments

Investments in trading securities are determined at fair value. The Bank and its subsidiaries recognise changes in the value of the securities as income (loss) in the income statements. Investments in available-for-sale securities, both held for short-term and long-term investment, are determined at fair value. The Bank and its subsidiaries recognise changes in the value of the securities as separate items in shareholders’ equity until the securities are sold, when they are then included in determining income. Investments in debt securities, both due within one year and expected to be held to maturity, are recorded at amortised cost. Premiums/discounts on debt securities are amortised by the effective rate method with the amortised amount presented as an adjustment to the interest income. Investments in non-marketable equity securities which are classified as other investments are stated at cost net of allowance for impairment (if any). The Bank and its subsidiaries do not treat investments in mutual fund as being in associated or subsidiary companies because the Bank and its subsidiaries do not have control or influence over the financial and operating policy of these funds, which are independently managed by the fund manager in accordance with the details of each fund project and the funds are under the supervision of the Securities and Exchange Commission. The fair value of marketable securities is based on the latest bid price of the last working day of the year as quoted on the Stock Exchange of Thailand. The fair value of government bonds, state enterprise securities and private sector debt securities is determined using the formula quoted by the BOT, which is based on the yield rate quoted by the Thai Bond Market Association adjusted by an appropriate risk factor. The fair value of unit trusts is determined based on their net asset value. The Bank and its subsidiaries recognised loss on impairment (if any) of available-for-sale securities, held-to-maturity debt securities and other investments in the statements of income. The weighted average method is used for computation of the cost of investments. In the event of the Bank and its subsidiaries’ transfer investments to another category, the investments are valued at their fair value prevailing on the transfer date. Differences between the carrying amount of the investments and their fair value on that date are recorded as gains (losses) in determining income or surplus (deficit) from revaluation of investments, which is presented as a separate item in shareholders’ equity and amortised over the remaining period to maturity of the debt securities, depending on the type of investment which is reclassified.

4.5 Investments in subsidiary and associated companies

Investments in subsidiaries in the separate financial statements are accounted for under the cost method net of allowance for impairment (if any). Loss on impairment is recognised as expenses in the income statements. Investment in an associated company in the consolidated financial statements is accounted for under the equity method. Under this method, investment is initially recorded at acquisition cost and is adjusted to reflect the attributable share of the income from the operations of the associated company, in proportion to the investment.



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4.6 Securities purchased under resale agreements

The Bank enters into agreements with a private company to purchase securities, whereby there is an agreement to resell the securities at certain dates and at a fixed price. Amounts paid for securities purchased are presented as assets under the caption of interbank and money market items or loan, depending on the counter party, and the underlying securities are treated as collateral to such receivables.

4.7 Receivables from/payable to Clearing House

Receivables from/payable to Clearing House comprises the net balance receivable from/payable to the Thailand Securities Depository in respect of securities trades settled through the Clearing House of Thailand Securities Depository and the net receivable from/payable to the Derivatives Clearing House. These also include amounts pledged with the Derivatives Clearing House as security for derivatives trading.

4.8 Loans

Loans are stated at the principal balances, excluding accrued interest receivable, except for overdrafts which are presented at the principal balances plus accrued interest receivable. Unrecognised deferred income and discounts on loans are deducted from the loan balances. Hire purchase receivables and financial lease receivables are stated at the contract value of the hire purchase receivables and financial lease receivables net of unearned income, which is presented after netting commission expenses and initial direct cost on the inception of the contracts. Securities and derivatives business receivables comprise the net securities receivable and derivatives business receivables. Securities business receivable comprise the net receivable balances of cash accounts and credit balance accounts (for which the securities purchased are used as collateral) as well as other receivables, such as overdue amounts in cash accounts and securities receivables which are under legal proceedings, are undergoing restructuring, or are being settled in installments.

4.9 Allowances for doubtful accounts

a) The Bank provides allowances for doubtful accounts in accordance with the Notifications of the BOT and adjusts these by the additional amount which is expected not to be collectible based on an evaluation of the current status of the debtors, taking into consideration the recovery risk and the value of collateral. Increase (decrease) in an allowance for doubtful debts is recognised as an expense during the year. The Bank sets provision for normal loans (including restructured receivables) and special mention loans at minimum rates of 1% and 2%, respectively, of the loan balances (excluding accrued interest receivable) net of collateral value, as required by the BOT’s guidelines. Collateral value included values of vehicles under hire purchase and finance lease contracts. For non-performing loans, provision is set at a rate of 100% of the debt balance remaining after deducting the present value of expected future cash flows from debt collection or from collateral disposal, based on the use of a discount rate and assumptions as to the time needed to dispose of the collateral, in accordance with the BOT’s guideline. However, non-performing hire purchase receivables and financial lease receivables are treated as having no collateral.

b) A securities subsidiary has provided an allowance for doubtful accounts based on a review of debtors’ repayment capability, taking into consideration the risk of recovery and the value of collateral. An allowance is set aside for doubtful debts not fully covered by collateral and/or those which may not be fully recovered. Such debt classifications and provisions are made in accordance with the Notifications of the SEC.

c) Subsidiaries engaged in hire purchase and leasing businesses have provided allowance for doubtful accounts at percentages of the amount of principal outstanding net of unearned income, based on the number of months overdue (with reference to the classification of loans under BOT’s guidelines). Allowance for doubtful accounts is provided based on the loan balances after net of collateral value for receivables overdue no more than 3 months, while provided based on the loans balance without deducting collateral value for receivables overdue more than 3 months.



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d) Allowance for doubtful accounts of other receivables is based on the amount of debt that may not be collectible, determined from a review of the current status of the receivables as at the balance sheet date.

e) The Bank writes off hire purchase receivables when full allowance for doubtful accounts has been made for such receivables. For other loans, the Bank and its subsidiaries will be written off when the relevant criteria under tax law are met.

f) Amounts written off as bad debts or bad debt recovery are deducted from or added to the allowance for doubtful accounts.

4.10 Troubled debt restructuring

In cases where the debt restructuring involves modifications of the terms, the fair value of the receivables after restructuring is based on the net present value of expected future cash flows, discounted by the market’s minimum interest rate for credit to large customers as at the date of the debt restructuring. The differences between the fair values of receivables as of the restructuring date and their previous book values is recorded in “Revaluation allowance for debt restructuring”, and recognised as an expense in the income statements in the restructuring period. The Bank and its subsidiaries review such revaluation allowance based on the net present value of future cash flows over the remaining period to maturity, recognising adjustments against bad debt and doubtful accounts. In cases where the troubled debt restructuring involves the transfer of assets or equity, the Bank and its subsidiaries record the assets or equity interest received as a result of debt restructuring at their fair value (based on the value appraised by internal appraisers or external independent appraisers) providing this does not exceed the amount of principal legally claimable from the debtor (including interest of which recognition has ceased until the restructuring date). Any excess of the fair value of the assets over the book value is recognised as interest income in the income statements. Losses arising from debt restructuring through waivers of part of principal or recorded accrued interest receivable are recognised in the income statement when incurred.

4.11 Recognition and amortisation of customers’ assets

Assets which customers have placed with the subsidiary company for securities trading, in term of cash accounts and credit balance accounts, including amounts which customers have placed as security for derivative trading, are recorded as assets and liabilities of the subsidiary company for internal control purpose. As at the balance sheet date, the subsidiary company writes off those amounts which there are no guarantee obligations from both assets and liabilities and presents only those assets which belong to the subsidiary company.

4.12 Property foreclosed

Property foreclosed is stated at the lower of cost (fair value with reference to appraisal value less estimated selling expenses, providing this does not exceed the legally claimable amount of debt) or net realisable value, which is determined with reference to the latest appraisal value less estimated selling expenses, adjusts these in accordance with the BOT’s guideline and taking into consideration the type and the nature of the assets. Gains on disposal of property foreclosed are recognised in the income statements on disposal date, unless the purchase is made with a loan from the Bank. In such cases, gains are recognised in accordance with the BOT’s guideline. Losses on disposal and impairment are recognised as expenses in the income statement.

4.13 Land, premises and equipment and depreciation

a) Land and assets in progress are stated at cost and depreciation is not provided. b) Premises and equipment are stated at cost less accumulated depreciation and allowance for

impairment (if any). Depreciation is calculated with reference to cost on a straight-line basis over the following estimated useful lives:



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Buildings - 20 years Buildings improvement - 5 - 10 years Furniture, fixtures and equipment - 5 - 10 years Motor vehicles - 5 years Depreciation is included in determining income.

4.14 Intangible assets and amortisation

Intangible assets are carried at cost less accumulated amortisation and accumulated impairment losses (if any). The Bank and its subsidiaries amortised intangible assets with finite lives on a systematic basis over the economic useful life and tested for impairment whenever there is an indication that the intangible asset may be impaired. The amortisation period and the amortisation method of such intangible assets are reviewed at least at each financial year end. The amortisation expense and loss on impairment are recognized as expenses in the income statement. The intangible assets with finite useful lives have useful lives of approximately 5 - 10 years.

4.15 Goodwill

Goodwill has been initially measured at cost, which is the excess of the cost of the business combination over the Bank’s share in the net fair value of the acquiree’s identifiable assets, liabilities and contingent liabilities. Goodwill is carried at cost less any accumulated impairment losses, and is tested for impairment annually or when circumstances indicate that the carrying value may be impaired. For the purpose of impairment testing, goodwill acquired in a business combination is allocated to each of the cash generating units (or group of cash-generating units) that is expected to benefit from the synergies of the combination. The Bank estimates the recoverable amount of each cash-generating unit (or group of cash-generating units) to which the goodwill relates. Where the recoverable amount of the cash-generating unit is less than the carrying amount, an impairment loss is recognised in the statement of income. Impairment losses relating to goodwill cannot be reversed in future periods.

4.16 Long-term leases

Leases that transfer substantially all the risks and rewards of ownership to the Bank and its subsidiaries are classified as financial leases. Financial leases are capitalised at the lower of the fair value of the leased assets and the present value of the minimum lease payments. The outstanding rental obligations, net of finance charges, are included in other payables, while the interest element is charged to the income statement over the lease period. Assets acquired under finance leases are depreciated over their estimated useful lives. Lease not transferring a significant portion of the risks and rewards of ownership to the lessee are classified as operating leases. The Bank and its subsidiaries record advance payments made under operating leases as leasehold rights, and amortise them as expenses in the income statement over the term of the leases on the straight - line basis. Moreover, payments made under operating leases are recognised as expenses in the income statement over the term of the leases on the straight-line basis.

4.17 Premium due and uncollected and allowance for doubtful accounts

Premium due and uncollected is carried at its net realisable value. Subsidiary companies provide an allowance for doubtful accounts based on the estimated loss that may be incurred in the collection of the premium due, on the basis of collection experience and a review of current status of the premium due as at the balance sheet date.

4.18 Sales of commercial paper

The Bank recorded commercial paper with an aval by the Bank, or without an aval or acceptance which is sold with recourse, as a liability under the caption of “Liabilities under commercial paper sold”. Commercial paper sold at a discount with recourse, which is avaled by or has acceptance from a commercial bank or other finance company, is recorded by crediting the notes receivable account, and the obligations disclosed as part of “Contingent liabilities”.



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4.19 Securities and derivatives business payables

Securities and derivatives business payables are the obligations of the subsidiary in respect of its securities and derivatives business with the outside parties.

4.20 Loss reserve and outstanding claims/Benefits payment to life policy

Non-life insurance business Outstanding claims are recorded at the amount to be actually paid. Loss reserve is provided upon the receipt of the claims advice from the insured based on the claims notified by the insured and estimates made by a subsidiary company’s management. The estimated value of losses is limited to not more than the sum insured of the related insurance policies. In addition, a subsidiary company set up additional provision for losses incurred but not yet reported (IBNR) based on historical experience but at no less than 2.5 percent of the total net written premiums in the twelve months prior to the allocation date, in compliance with the Notification of the Ministry of Commerce governing the appropriation of unearned premium reserves and loss reserve by non-life insurance companies. However, from 1 January 2009, a subsidiary company set up provision for IBNR at the higher of the reserve calculated using standard actuarial claims techniques and 2.5 percent of total net written premiums in the previous twelve months. Life insurance business Benefits paid under life policies are provided for upon receipt of the claims advices from the insured or in accordance with the conditions of the policy.

4.21 Related party transactions

Related parties comprise enterprises and individuals that control, or are controlled by, the Bank and its subsidiaries, whether directly or indirectly, or which are under common control with the Bank and its subsidiaries. They also include associated company and individuals which directly or indirectly own a voting interest in the Bank and its subsidiaries that give them significant influence over the Bank and its subsidiaries, key management personnel, directors and officers with authority in the planning and direction of the Bank’s and its subsidiaries’ operations.

4.22 Impairment of assets

The Bank and its subsidiaries assess at each reporting date whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment testing for an asset is required, the Bank and its subsidiaries realise loss on impairment when the asset’s recoverable amount is less than the book value. An asset’s recoverable amount is the higher of an asset’s fair value less costs to sell and its value in use. Fair value less costs to sell reflects the amount that the Bank and its subsidiaries could obtain at the balance sheet date from the disposal of the asset in an arm’s length transaction between knowledgeable, willing parties, after deducting the costs of disposal. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. The Bank and its subsidiaries recognise impairment losses in the income statement. The Bank and its subsidiaries assess at each reporting date whether there is an indication that previously recognised impairment losses may no longer exist or may have decreased. If such indication exists, the Bank and its subsidiaries estimate the asset’s recoverable amount and the impairment loss recognised in prior periods for assets other than goodwill is reversed.



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4.23 Employee benefits

Salary, wages, bonuses and contributions to the social security fund and provident fund are recognised as expenses when incurred.

4.24 Foreign currencies

Foreign currency transactions are translated into Baht at the exchange rates ruling at the transaction dates. Monetary assets and liabilities denominated in foreign currencies and off-balance sheets transactions, which were outstanding on the balance sheet date, have been translated into Baht at the rates ruling at the balance sheet date. Exchange gains and losses arising from trading or translation of foreign currencies are included in determining income.

4.25 Provisions

Provisions are recognised when the Bank and its subsidiaries have a present obligation as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.

4.26 Income tax

Income tax is provided in the accounts based on taxable income determined in accordance with tax legislation.

4.27 Financial derivatives

The Bank and its subsidiaries have entered into off-balance sheet transactions involving derivative financial instruments in order to manage risk of the Bank and its subsidiaries and in response to customer needs. Forward foreign currency contracts which originated for trading purposes are recorded as off-balance sheet items. Gains or losses arising from changes in the fair value of the contracts are recognised in the income statement. Forward foreign currency contracts, interest rate swap contracts and cross currency and interest rate swap contracts which were not originated for trading purposes are recorded as off-balance sheet items, and presented on an accrual basis. Foreign currency components are translated at the year-end exchange rate, in the same manner as the hedged items, with unrealised gains or losses on translation recognised in the income statement. Interest rate components are presented on an accrual basis, in the same manner as the hedged assets or liabilities, with gains or losses recorded to interest income and interest expense over the terms of the contracts. Receivables and payables under forward exchange contracts and interest rate swap contracts are presented at the net amount in balance sheet.

5. Significant accounting judgments and estimates

The preparation of financial statements in conformity with generally accepted accounting principles at times requires management to make subjective judgments and estimates regarding matters that are inherently uncertain. These judgments and estimates affect reported amounts and disclosures and actual results could differ. Significant accounting judgments and estimates are as follows:

5.1 Recognition and derecognition of assets and liabilities In considering whether to recognise and derecognise assets or liabilities, the management is required to make judgment on whether significant risk and rewards of those assets or liabilities have been transferred, based on their best knowledge of the current events and arrangements.

5.2 Allowance for doubtful accounts for loans

Allowance for doubtful accounts for loans is intended to adjust the value of loans for probable credit losses. The management uses the BOT’s regulation regarding the provision of allowance for doubtful accounts and judgments to estimate losses on outstanding loans when there is any doubt about the borrower’s capability to repay the principal and/or the interest. The allowances for loan losses are determined through a combination of specific reviews, probability of default, value of collateral and current economic conditions.

5. Significant accounting judgments and estimates



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5.3 Fair value of financial instruments

In determining the fair value of financial instruments that are not actively traded and for which quoted market prices are not readily available, the management exercised judgment, using a variety of valuation techniques and models. The input to these models is taken from observable markets, and includes consideration of liquidity, correlation and longer-term volatility of financial instruments.

5.4 Allowance for impairment of investments

The Bank and its subsidiaries review an impairment of investments when there has been a significant or prolonged decline in the fair value. The determination of what is “significant” or “prolonged” requires the management’s judgment.

5.5 Allowance for impairment of property foreclosed

The Bank and its subsidiaries assess allowance for impairment of property foreclosed when net realizable value falls below the book value. The management uses the BOT’s regulation and judgment to estimate impairment losses, taking into consideration the latest appraisal value, the type and the nature of the assets.

5.6 Property, premise and equipment/Depreciation

In determining depreciation of premise and equipment, the management is required to make estimates of the useful lives and salvage values of the premise and equipment and to review estimate useful lives and salvage values when there are any changes.

5.7 Goodwill and intangible assets

The initial recognition and measurement of goodwill and intangible assets requires the management to make judgment of the recoverable amount to be generated by the asset using the discounted cash flows method. The estimated cash flows may differ as a result of competitive forces, or changes in revenue trends, cost structures, and the discount rate, industry circumstances or related market conditions.

5.8 Finance lease/Operating lease

In determining whether a lease is to be classified as an operating lease or finance lease, the management is required to use judgment regarding whether significant risk and rewards of ownership of the leased assets have been transferred to the leasee. Leases that transfer substantially all the risks and rewards of ownership to the leasee are classified as financial leases. In the other hand, leases not transferring a significant portion of the risks and rewards of ownership to the leasee are classified as operating lease.

5.9 Loss sharing from transfer of non-performing loans to TAMC

In estimating losses arising from the transfer of non-performing loans to the Thai Asset Management Corporation (“TAMC”), the Bank uses the latest information received from TAMC and projections of the amounts expected to be received from the debtors or from collateral value. The management uses judgment in determining the assumptions as to the percentage on the amount expected to be recovered from the debt restructuring agreement, or as to collateral value. The management considers these assumptions to be appropriate given the currently available information and current situation

5.10 Life insurance premium reserve

Life insurance premium reserve is calculated under the actuarial method, based on the assumptions established at inception of the contract which reflect the best estimate at the time, increased with a margin for risk and adverse deviation. The main assumptions used relate to mortality, morbidity, longevity, expenses, and discount rates.

5.11 Loss reserve and outstanding claims

Part of the loss reserve for claims of the subsidiary company is estimated by the subsidiary’s management on the basis of claims advices received from insured parties. Another part is for losses incurred but not yet reported (IBNR), which is estimated using a range of standard actuarial claims techniques. The main assumption underlying these techniques relate to historical claims experience, including development of estimates of paid and incurred losses, average costs per claim, claim numbers and insurance type.



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5.12 Litigation

The Bank and its subsidiaries have contingent liabilities as a result of litigation. The management has used judgment to assess of the results of the litigation case, and in case where they believe that there will be no losses, they will provide no contingent liabilities at the balance sheet date.

6. Interbank and money market items (assets) (Unit: Million Baht) Consolidated financial statements 2009 2008 At call Term Total At call Term Total

Domestic Bank of Thailand and Financial

Institutions Development Fund 3,442 6,600 10,042 3,422 35,800 39,222 Commercial banks 396 45,300 45,696 628 4,490 5,118 Other banks 46 50 96 112 50 162 Other financial institutions 350 647 997 18 300 318 Total 4,234 52,597 56,831 4,180 40,640 44,820 Add: Accrued interest receivables - 11 11 1 40 41 Less: Allowance for doubtful accounts - - - - (26) (26) Total domestic items 4,234 52,608 56,842 4,181 40,654 44,835 Foreign US Dollar 200 7,546 7,746 286 20,236 20,522 Euro 55 - 55 98 - 98 Others 76 - 76 112 - 112 Total 331 7,546 7,877 496 20,236 20,732 Add: Accrued interest receivables - 26 26 - 136 136 Total foreign items 331 7,572 7,903 496 20,372 20,868 Total 4,565 60,180 64,745 4,677 61,026 65,703

(Unit: Million Baht) Separate financial statements 2009 2008 At call Term Total At call Term Total

Domestic Bank of Thailand and Financial

Institutions Development Fund 3,442 6,600 10,042 3,422 35,800 39,222 Commercial banks 101 45,000 45,101 251 3,200 3,451 Other banks 35 - 35 103 - 103 Other financial institutions 350 590 940 18 - 18 Total 3,928 52,190 56,118 3,794 39,000 42,794 Add: Accrued interest receivables - 7 7 - 29 29 Total domestic items 3,928 52,197 56,125 3,794 39,029 42,823 Foreign US Dollar 200 7,546 7,746 286 20,236 20,522 Euro 55 - 55 98 - 98 Others 76 - 76 112 - 112 Total 331 7,546 7,877 496 20,236 20,732 Add: Accrued interest receivables - 26 26 - 136 136 Total foreign items 331 7,572 7,903 496 20,372 20,868 Total 4,259 59,769 64,028 4,290 59,401 63,691

6. Interbank and money market items (assets)



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During the year 2009, a financial institution receivable of a subsidiary company which has outstanding debt of Baht 306 million entered into debt restructuring agreement, whereby terms of payment were amended and some debt was converted to equity. The subsidiary company had loss on debt restructuring amounting to Baht 9 million and reversed the existing allowance for doubtful accounts, amounting to Baht 25 million. As at 31 December 2009, the outstanding debt had amounted to Baht 57 million (2008: the outstanding debt was Baht 300 million and related allowance was Baht 25 million). As at 31 December 2009, deposits of the Bank included deposits with BNS (the other major shareholder) of Baht 189 million (2008: Baht 7,754 million).

7. Investments

7.1 Classified by type of investment

(Unit: Million Baht) Consolidated financial statements Separate financial statements 2009 2008 2009 2008

Cost/ Amortised Fair




cost value cost value cost value cost value Current investment Trading securities Government and state enterprises

securities 263 263 - - - - - - Private debt securities 754 759 - - 754 759 - - Total 1,017 1,022 - - 754 759 - - Add: Allowance for change in value 5 - 5 - Net 1,022 - 759 - Available-for-sale securities Government and state enterprises

securities 14,468 14,471 4,264 4,290 11,569 11,572 1,956 1,977 Private debt securities 1,551 1,559 463 469 994 1,000 420 427 Foreign debt securities 334 336 - - 334 336 - - Domestic marketable equity securities 128 132 49 49 - - - - Total 16,481 16,498 4,776 4,808 12,897 12,908 2,376 2,404 Add: Allowance for change in value 17 32 11 28 Net 16,498 4,808 12,908 2,404 Held-to-maturity debt securities

- dued within one year Government and state enterprises

securities 953 1,495 773 1,348 Private debt securities - 101 - - Foreign debt securities 4,449 524 4,449 524 Total 5,402 2,120 5,222 1,872 Other investment Investment in property fund 100 - 100 - Total 100 - 100 - Total current investment - net 23,022 6,928 18,989 4,276

7. Investments


THANACHART BANK PUBLIC COMPANY LIMITED 14


Cost/ Amortised Fair Cost/

Amortised Fair Cost/ Amortised Fair Cost/

Amortised Fair cost value cost value cost value cost value Long-term investment Available-for-sale securities Government and state enterprises

securities 20,844 20,864 618 697 19,493 19,513 614 693 Private debt securities 6,606 6,766 4,618 4,800 4,646 4,758 2,714 2,838 Foreign debt securities 5,406 5,667 - - 5,406 5,667 - - Domestic marketable equity securities

Listed securities 1,637 1,598 2,380 1,194 415 402 575 253 Unit trusts 554 581 605 574 - - 416 376

Total 35,047 35,476 8,221 7,265 29,960 30,340 4,319 4,160 Add (less): Allowance for change in

value 435 (722) 380 (61) Less: Allowance for impairment (6) (234) - (98) Net 35,476 7,265 30,340 4,160 Held-to-maturity debt securities Government and state enterprises

securities 17,087 9,656 10,455 8,684 Private debt securities 1,362 791 - - Foreign debt securities - 4,323 - 4,323 Total 18,449 14,770 10,455 13,007 Less: Allowance for impairment (89) (89) (89) (89) Net 18,360 14,681 10,366 12,918 Other investment Investment in property fund 368 658 368 655 Domestic non-marketable equity

securities Investment in equity securities 117 109 99 99 Unit trusts 18 18 18 18

Foreign non-marketable equity securities Investment in equity securities 3 - 3 -

Total 506 785 488 772 Less: Allowance for impairment (22) (30) (22) (22) Net 484 755 466 750 Total long-term investment - net 54,320 22,701 41,172 17,828

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During the year 2009, a financial institution receivable of a subsidiary company which has outstanding debt of Baht 306 million entered into debt restructuring agreement, whereby terms of payment were amended and some debt was converted to equity. The subsidiary company had loss on debt restructuring amounting to Baht 9 million and reversed the existing allowance for doubtful accounts, amounting to Baht 25 million. As at 31 December 2009, the outstanding debt had amounted to Baht 57 million (2008: the outstanding debt was Baht 300 million and related allowance was Baht 25 million). As at 31 December 2009, deposits of the Bank included deposits with BNS (the other major shareholder) of Baht 189 million (2008: Baht 7,754 million).

7. Investments

7.1 Classified by type of investment






cost value cost value cost value cost value Current investment Trading securities Government and state enterprises

securities 263 263 - - - - - - Private debt securities 754 759 - - 754 759 - - Total 1,017 1,022 - - 754 759 - - Add: Allowance for change in value 5 - 5 - Net 1,022 - 759 - Available-for-sale securities Government and state enterprises

securities 14,468 14,471 4,264 4,290 11,569 11,572 1,956 1,977 Private debt securities 1,551 1,559 463 469 994 1,000 420 427 Foreign debt securities 334 336 - - 334 336 - - Domestic marketable equity securities 128 132 49 49 - - - - Total 16,481 16,498 4,776 4,808 12,897 12,908 2,376 2,404 Add: Allowance for change in value 17 32 11 28 Net 16,498 4,808 12,908 2,404 Held-to-maturity debt securities

- dued within one year Government and state enterprises

securities 953 1,495 773 1,348 Private debt securities - 101 - - Foreign debt securities 4,449 524 4,449 524 Total 5,402 2,120 5,222 1,872 Other investment Investment in property fund 100 - 100 - Total 100 - 100 - Total current investment - net 23,022 6,928 18,989 4,276



15

7.2 Classified by due date of debt securities

(Unit: Million Baht) Consolidated financial statements 2009 2008 Due within Due within

Less than 1 year 1 - 5 years

Over 5 years Total


Over 5 years Total

Available-for-sale securities Government and state enterprises

securities 14,448 20,186 678 35,312 4,264 42 576 4,882 Private debt securities 1,551 6,518 88 8,157 463 4,318 300 5,081 Foreign debt securities 334 5,406 - 5,740 - - - - Total 16,333 32,110 766 49,209 4,727 4,360 876 9,963 Add: Allowance for change in value 13 430 11 454 32 162 99 293 Net 16,346 32,540 777 49,663 4,759 4,522 975 10,256 Held-to-maturity debt securities Government and state enterprises

securities 953 9,036 8,051 18,040 1,495 9,452 204 11,151 Private debt securities - 889 473 1,362 101 272 519 892 Foreign debt securities 4,449 - - 4,449 524 4,323 - 4,847 Total 5,402 9,925 8,524 23,851 2,120 14,047 723 16,890 Less: Allowance for impairment - (89) - (89) - (89) - (89) Net 5,402 9,836 8,524 23,762 2,120 13,958 723 16,801 Total debt securities 21,748 42,376 9,301 73,425 6,879 18,480 1,698 27,057

(Unit: Million Baht) Separate financial statements 2009 2008 Due within Due within


Over 5 years Total


Over 5 years Total

Available-for-sale securities Government and state enterprises

securities 11,569 19,081 412 31,062 1,956 39 575 2,570 Private debt securities 994 4,558 88 5,640 420 2,714 - 3,134 Foreign debt securities 334 5,406 - 5,740 - - - - Total 12,897 29,045 500 42,442 2,376 2,753 575 5,704 Add: Allowance for change in value 11 383 10 404 28 126 77 231 Net 12,908 29,428 510 42,846 2,404 2,879 652 5,935 Held-to-maturity debt securities Government and state enterprises

securities 773 7,972 2,483 11,228 1,348 8,684 - 10,032 Foreign debt securities 4,449 - - 4,449 524 4,323 - 4,847 Total 5,222 7,972 2,483 15,677 1,872 13,007 - 14,879 Less: Allowance for impairment - (89) - (89) - (89) - (89) Net 5,222 7,883 2,483 15,588 1,872 12,918 - 14,790 Total debt securities 18,130 37,311 2,993 58,434 4,276 15,797 652 20,725



16

7.3 As at 31 December 2009, the Bank and its subsidiaries have a revaluation deficit arising from transfers of investments in debt securities, of which the current balances of Baht 164 million in the consolidated financial statements and Baht 177 million in the separate financial statements. These are presented in shareholders’ equity caption. (2008: Revaluation surplus of Baht 1 million and revaluation deficit of Baht 259 million in the consolidated financial statements, and revaluation surplus of Baht 1 million and revaluation deficit of Baht 263 million in the separate financial statements).

7.4 As at 31 December 2009, long-term investments in held-to-maturity debt securities include non-transferable promissory notes, with terms of 10 years counting from 16 September 2002 and 14 March 2003, amounting to Baht 292 million and Baht 4 million, respectively, which were received as a result of the transfer of non-performing loans of totaled Baht 296 million to Thai Asset Management Corporation (“TAMC”) (2008: Baht 296 million). However, the agreed transfer price received in the form of promissory notes could still be revised up or down after TAMC reviews the price or has the collateral assessed or the price adjusted. As at 31 December 2009, the Bank is still unable to estimate the exact amount of such losses. However, the Bank has estimated the contingent of losses arising from the management of non-performing assets at approximately Baht 89 million (2008: Baht 89 million). Such amount has been presented as allowance for impairment under the caption of investments in held-to-maturity debt securities, classified based on the type of promissory note. In addition, the Bank also shares joint responsibility with TAMC for future profits or losses arising from TAMC’s management of the non-performing assets as mentioned in Note 36.2 to the financial statements.

7.5 As at 31 December 2009, investments of the Bank and its subsidiary in government and state enterprise securities amounting to Baht 1,738 million, at amortised cost, have been placed as collateral for loans from commercial banks and as security with a Government agencies (separate financial statements: Baht 20 million) (2008: Baht 1,257 million in the consolidated financial statements).

7.6 As at 31 December 2009 and 2008, investments in which the Bank and its subsidiaries hold not less than 10 percent of the equity of the investee are as follows:

Consolidated financial statements Separate financial statements 2009 2008 2009 2008

Securities Nature of business Cost

Percentage of holding Cost



Percentage of holding

Million Baht Percent Million Baht Percent Million Baht Percent Million Baht Percent Public utilities and services Puen Pob Paet Co., Ltd. Medical Clinic - 10.00 - 10.00 - 10.00 - 10.00 Others The Thai Business Fund 3 (1) Mutual Fund -

property 252 26.67 340 26.67 252 26.67 340 26.67

Sub Thawee Property Fund (1) Mutual Fund - property

116 56.00 156 56.00 116 56.00 156 56.00

Thanasarn Open-End Fund (1) Mutual Fund - debt securities

- - 267 28.99 - - 267 28.99

The Krung Thai Dividend Fixed-Income Fund

Mutual Fund - debt securities

50 15.08 - - - - - -

(1) The Bank and its subsidiaries do not treat these investments as associated or subsidiary companies because the Bank and its subsidiaries do not have control or influence over the financial and operating policy of these funds, which are independently managed by the fund manager in accordance with the details of each fund project and the funds are under the regulations of the Securities and Exchange Commission. Therefore, the Bank and its subsidiaries account for its long-term investments in these funds as available-for-sale securities or other investments depending on the objective of investment.

7.7 As at 31 December 2009 and 2008, investments in securities of the Bank and its subsidiaries included investments in the companies with weak financial position and poor operating results, are summarised below.



17

Consolidated financial statements Allowance for change in value/impairment Number of investment Cost Fair value provided in the accounts 2009 2008 2009 2008 2009 2008 2009 2008

Million Baht Million Baht Million Baht Million Baht Million Baht Million Baht Equity securities - common shares 1. Companies whose auditors’ reports cited

going concern issues 2 2 21 21 1 1 20 20 2. Financial institutions that are in the

process of debt restructuring - 1 - 8 - - - 8

Separate financial statements Allowance for change in value/impairment Number of investment Cost Fair value provided in the accounts 2009 2008 2009 2008 2009 2008 2009 2008

Million Baht Million Baht Million Baht Million Baht Million Baht Million Baht Equity securities - common shares 1. Companies whose auditors’ reports cited

going concern issues 2 2 21 21 1 1 20 20

8. Investments in subsidiary companies

8.1 As at 31 December 2009 and 2008, investments in subsidiary companies in the separate financial statements stated under the cost method, consist of investment in ordinary shares of the following subsidiary companies:

(Unit: Million Baht) Separate financial statements

Percentage Value of investment Dividend income

for the years ended Paid-up share capital of holding under the cost method 31 December

Company’s name Nature of business 2009 2008 2009 2008 2009 2008 2009 2008 Thanachart Securities Plc. Securities business 1,500 1,500 100 100 1,858 1,858 83 240 Thanachart Insurance Co., Ltd. Non-life

insurance 740 740 100 100 867 867 - -

Thanachart Life Assurance Co., Ltd. Life - insurance 500 500 100 100 936 936 70 50 Thanachart Fund Management

Co., Ltd. Fund management 100 100 75 75 97 97 90 75

Thanachart Broker Co., Ltd. Non-life insurance broker

100 100 100 100 104 104 93 69

Thanachart Group Leasing Co., Ltd. Hire purchase 360 360 100 100 400 400 101 15 Thanachart Management and

Services Co., Ltd. Services 6 6 100 100 11 11 - -

Thanachart Legal and Appraisal Co., Ltd.

Legal services 10 10 100 100 13 13 - -

Thanachart Training and Development Co., Ltd.

Training services 5 5 100 100 5 5 30 14

T Leasing Co., Ltd. Hire purchase 180 180 100 100 191 191 - - Total investments in subsidiary

companies 4,482 4,482 467 463

8. Investments in subsidiary companies



18

8.2 The consolidated balance sheet as at 31 December 2008 and the consolidated income statement for the year then ended included assets, income and net income of Thanachart Life Assurance Co., Ltd. of which the auditor of the subsidiary issued a qualified audit report on the financial statements for the year ended 31 December 2008 with respect to the effect of any adjustments which might be required as a result of a scope limitation imposed on the audit of insurance income and related expenses. Such issue has been already corrected and adjusted in the financial statements for the year ended 31 December 2009. However, the results of such adjustments have no material effect on the current year consolidated financial statements.

8.3 During the year 2008, the Bank purchased ordinary shares of T Leasing Co., Ltd. from Thanachart Group Leasing Co., Ltd., and included this company as a subsidiary company in the solo consolidation group. The gain on disposal of investment in such subsidiary in Thanachart Group Leasing’s financial statements, amounting Baht 11 million has been eliminated from the consolidated financial statement.

9. Investments in an associated company

9.1 As at 31 December 2009 and 2008, investments in an associated company in the consolidated financial statements included investment in MBK Plc., which was incorporated under Thai laws and engaged in property rental, hotel and services businesses can be summarised as follows:

(Unit: Million Baht) Dividend income Share of income Paid-up Percentage Investment value for the years ended for the years ended share capital of holding (%) Cost method Equity method 31 December 31 December

Company’s name 2009 2008 2009 2008 2009 2008 2009 2008 2009 2008 2009 2008 Consolidated financial statements MBK Plc. 1,886 1,886 9.90 10.76 984 1,066 1,261 1,083 83 81 129 153

The Bank and its subsidiaries classified such investments as investments in an associated company, like its Parent company, since the Parent company had significant influence in that company.

During the year 2009, a subsidiary company sold investments in this associated company of Baht 81 million with gain on disposal of Baht 3 million, and presented in the consolidated financial statements.

9.2 Summarised financial information of an associated company as at 30 September 2009 and 2008 and for the years then ended as follows:


Total income

for the Net income

for the Paid-up share capital Total assets Total liabilities years ended years ended 30 September 30 September 30 September 30 September 30 September

Company’s name 2009 2008 2009 2008 2009 2008 2009 2008 2009 2008 MBK Plc. 1,886 1,886 23,514 19,164 13,021 10,889 6,494 6,410 1,258 1,456

The share of income of that associated company recognised in the current year is determined based on financial statements of that associated company prepared for a different period, as a result of limitations on the availability of information. The financial information used was based on the balance sheets as of 30 September 2009 and 2008 and the income statement for the years then ended, prepared by the Bank’s management, with reference to the financial statements as reviewed by its auditor and adjusted to reflect differences in accounting policies. The Bank’s management believes that the net income for the year ended 30 September 2009 is not material different from that income for the year ended 31 December 2009.

9.3 As at 31 December 2009, the fair value of investment in an associated company which is listed in the Stock Exchange of Thailand was Baht 1,214 million (2008: Baht 1,005 million).

9. Investments in an associated company



19

10. Loans and accrued interest receivables

10.1 Classified by loan type (Unit: Million Baht)


Loans Overdrafts 2,812 2,511 2,812 2,511 Loans 48,335 39,992 49,330 39,990 Notes receivable 19,938 25,805 21,827 30,273 Hire purchases receivables 210,141 203,829 206,320 198,344 Financial leases receivables 2,345 1,897 2,288 1,807 Total loans 283,571 274,034 282,577 272,925 Add: Accrued interest receivables 277 288 282 303 Less: Allowance for doubtful accounts (8,048) (6,769) (7,718) (6,365) Revaluation allowance for debt restructuring (33) (20) (33) (20) Loans and accrued interest receivables - net 275,767 267,533 275,108 266,843 Securities business receivables Customers’ accounts 692 1,095 - - Credit balances receivables 870 598 - - Other receivables 382 415 - - Total securities business receivables 1,944 2,108 - - Less: Allowance for doubtful accounts (315) (298) - - Securities business receivables and accrued interest receivables - net 1,629 1,810 - - Loans and accrued interest receivables - net 277,396 269,343 275,108 266,843

10.2 Classified by remaining period of contract (Unit: Million Baht) Consolidated financial statements Separate financial statements 2009 2008 2009 2008

At call* 7,118 13,867 8,723 17,302 Not over 1 year 29,268 23,640 26,942 22,116 Over 1 year 249,406 238,923 247,194 233,810 Total loans and accrued interest receivables 285,792 276,430 282,859 273,228

* Included expired contracts

10.3 Classified by currency and country

(Unit: Million Baht) Consolidated financial statements 2009 2008 Domestic Foreign Total Domestic Foreign Total

Baht 283,148 323 283,471 275,151 256 275,407 US Dollar 1,313 1,004 2,317 955 - 955 Other currencies 4 - 4 68 - 68 Total 284,465 1,327 285,792 276,174 256 276,430

10. Loans and accrued interest receivables



20

(Unit: Million Baht) Separate financial statements 2009 2008 Domestic Foreign Total Domestic Foreign Total

Baht 280,215 323 280,538 271,949 256 272,205 US Dollar 1,313 1,004 2,317 955 - 955 Other currencies 4 - 4 68 - 68 Total 281,532 1,327 282,859 272,972 256 273,228

10.4 Classified by type of business and loan classification

(Unit: Million Baht) Consolidated financial statements 2009 Special Doubtful Normal mention Substandard Doubtful of loss Total

Parent and related companies 473 - - - - 473 Agricultural and mining 2,597 2 - 7 - 2,606 Manufacturing and commerce 15,170 71 158 157 598 16,154 Real estate and construction 14,122 473 67 457 491 15,610 Public utilities and services 15,120 456 34 7 64 15,681 Personal consuming

Housing loans 6,033 399 103 260 153 6,948 Securities 1,628 - 3 313 - 1,944 Hire purchase 188,466 16,756 893 807 3,219 210,141 Others 6,302 506 166 366 671 8,011

Others 8,223 - - - 1 8,224 Total loans and accrued interest receivables 258,134 18,663 1,424 2,374 5,197 285,792

(Unit: Million Baht) Consolidated financial statements 2008 Special Doubtful Normal mention Substandard Doubtful of loss Total

Parent and related companies 8,563 - - - - 8,563 Agricultural and mining 1,143 - - 10 - 1,153 Manufacturing and commerce 11,273 647 14 372 523 12,829 Real estate and construction 13,369 430 219 25 612 14,655 Public utilities and services 11,663 1,240 71 14 56 13,044 Personal consuming

Housing loans 6,430 545 67 110 241 7,393 Securities 1,595 - 4 295 - 1,894 Hire purchase 177,765 21,941 1,057 894 2,172 203,829 Others 6,508 709 249 282 605 8,353

Others 4,707 9 - - 1 4,717 Total loans and accrued

interest receivables 243,016 25,521 1,681 2,002 4,210 276,430



21

(Unit: Million Baht) Separate financial statements 2009 Special Doubtful Normal mention Substandard Doubtful of loss Total

Parent, subsidiaries and related companies 3,337 - - - - 3,337 Agricultural and mining 2,597 2 - 7 - 2,606 Manufacturing and commerce 15,169 71 158 157 598 16,153 Real estate and construction 14,102 473 67 457 491 15,590 Public utilities and services 15,116 456 34 7 64 15,677 Personal consuming

Housing loans 6,033 399 103 260 153 6,948 Hire purchase 185,753 15,940 808 751 3,068 206,320 Others 6,297 506 166 366 671 8,006

Others 8,221 - - - 1 8,222 Total loans and accrued interest receivables 256,625 17,847 1,336 2,005 5,046 282,859

(Unit: Million Baht) Separate financial statements 2008 Special Doubtful Normal mention Substandard Doubtful of loss Total

Parent, subsidiaries and related companies 12,815 - - - - 12,815 Agricultural and mining 1,143 - - 9 - 1,152 Manufacturing and commerce 11,263 647 14 372 523 12,819 Real estate and construction 13,339 430 219 25 612 14,625 Public utilities and services 11,633 1,241 71 14 56 13,015 Personal consuming

Housing loans 6,430 545 67 110 241 7,393 Hire purchase 173,967 20,642 927 817 1,991 198,344 Others 6,505 709 249 282 605 8,350

Others 4,706 8 - - 1 4,715 Total loans and accrued

interest receivables 241,801 24,222 1,547 1,629 4,029 273,228 10.5 Non-performing loans

As at 31 December 2009 and 2008, the Bank and the securities company, a subsidiary, had non-performing loans (debtors classified as substandard, doubtful and doubtful of loss) classified in accordance with the Notification of the BOT and SEC as follows:


Non-performing loans (excluding accrued interest receivables)

The Bank 8,359 7,167 8,359 7,167 Securities business 316 299 - -



22

The above definition of non-performing loans does not include overdue loans which have been restructured and meet the conditions for classification as Normal or Special mention debt. Additionally, the Bank and the subsidiary company, securities company, had loans for which income recognition under an accrual basis has been discontinued, as follows:

(Unit: Million Baht) Consolidated financial statements Separate financial statements

2009 2008 2009 2008 The Bank 8,777 7,251 8,777 7,251 Securities business 316 299 - -

10.6 Unearned income/interest income received in advance

As at 31 December 2009 and 2008, the Bank and its subsidiaries had unearned interest income and interest income received in advance as follows:


Unearned interest income 175 175 175 175 Unearned income from hire purchase/

financial lease 30,385 31,095 29,572 29,872 Interest income received in advance 7 5 7 5

10.7 Hire purchases/Financial leases receivables

As at 31 December 2009, the Bank and its subsidiaries had net hire purchase/financial lease receivables amounting to Baht 206,824 million in the consolidated financial statements and Baht 203,290 million in the separate financial statements. These mostly comprise hire purchase agreements or financial lease agreements for cars and motorcycles. The terms of the agreements are generally between 3 and 6 years and most carry interest at fixed rates.


Consolidated financial statement as at 31 December 2009 Amounts due under lease agreements Less than 1 year* 1 - 5 years Over 5 years Total

Gross investment in the lease 82,809 155,752 4,310 242,871 Unearned finance income (13,488) (16,760) (137) (30,385) Present value of minimum lease payments receivable 69,321 138,992 4,173 212,486 Allowance for doubtful accounts 5,662

* Included non-performing receivables

(Unit: Million Baht) Consolidated financial statement as at 31 December 2008 Amounts due under lease agreements Less than 1 year* 1 - 5 years Over 5 years Total





23

(Unit: Million Baht) Separate financial statement as at 31 December 2009 Amounts due under lease agreements Less than 1 year* 1 - 5 years Over 5 years Total



(Unit: Million Baht) Separate financial statement as at 31 December 2008 Amounts due under lease agreements Less than 1 year* 1 – 5 years Over 5 years Total



10.8 Troubled debt restructuring

During the years 2009 and 2008, the Bank and its subsidiaries have entered into debt restructuring agreements as follows:

2009

Type of restructuring Number of

debtors

Outstanding loans balance before restructuring (1)

Outstanding loans balance after

restructuring (1) Type of assets to

be transferred

Fair value of assets to be

transferred per agreements

Million Baht Million Baht Million Baht Consolidated and separate financial

statements

Modification of repayment conditions 10,796 3,408 3,407 Transfer of assets and/or ordinary

shares and/or modification of repayment conditions

14 270 270 Land 89

Total 10,810 3,678 3,677

(1) Presents the outstanding balance per the books of account (principal plus accrued interest).



24

2008

Type of restructuring Number of

debtors

Outstanding loans balance before restructuring (1)

Outstanding loans balance after

restructuring (1) Type of assets to

be transferred

Fair value of assets to be

transferred per agreements

Million Baht Million Baht Million Baht Consolidated financial statement Modification of repayment conditions 221 814 810 Transfer of assets and/or ordinary


3 6 6 Land 7

Total 224 820 816 Separate financial statement Modification of repayment conditions 211 615 615 Transfer of assets and/or ordinary


3 6 6 Land 7

Total 214 621 621

(1) Presents the outstanding balance per the books of account (principal plus accrued interest).

Counting from the balance sheet date, the remaining periods to maturity of receivables which entered into debt restructuring agreements during the years 2009 and 2008, are summarised below. 2009 2008 Consolidated and separate

financial statements Consolidated financial

statements Separate financial statements

Periods Number of

debtors

Outstanding balances after restructuring

Number of debtors


Number of debtors


Million Baht Million Baht Million Baht Past due after restructuring 4,760 1,541 102 493 102 493 Due within the year 782 253 68 102 65 55 Less than 5 years 2,166 702 34 155 27 7 5 - 10 years 3,078 1,115 6 25 6 25 10 - 15 years 11 31 3 3 3 3 Over 15 years 13 35 11 38 11 38 Total 10,810 3,677 224 816 214 621 Supplemental information for the years 2009 and 2008 relating to restructured loan is as follows: (Unit: Million Baht) Consolidated financial statements Separate financial statements 2009 2008 2009 2008 Interest income recognised in income statement 254 144 249 142 Cash repayment from receivables 678 751 640 688 Properties foreclosed received for debts settlement 138 7 138 7 Loss on debt restructuring 32 13 32 9



25

As at 31 December 2009 and 2008, the Bank and its subsidiaries have the following restructured receivables balance (principal and accrued interest receivable) as follows:

Restructured receivables

Total number of

outstanding receivables Number of receivables Outstanding balances Outstanding balances,

net of collateral 2009 2008 2009 2008 2009 2008 2009 2008 Million Baht Million Baht Million Baht Million Baht Thanachart Bank Plc. 812,480 707,434 10,600 381 5,280 2,645 1,964 883 Thanachart Securities Plc. 1,906 1,580 6 8 101 134 101 134

10.9 As at 31 December 2009 and 2008, the Bank had loans to parent company, subsidiary and related companies within Thanachart Group as follows:

Contract period as at Interest rate as at Outstanding balances Company’s name Type of credit 31 December 2009 31 December 2009 2009 2008

Million Baht Million Baht Parent company Thanachart Capital Plc. Promissory note - 4,500 Subsidiary companies Thanachart Group Leasing

Co., Ltd. Promissory note At call The Bank’s cost of fund

plus a fixed interest rate per annum

2,168 3,645

T Leasing Co., Ltd. Promissory note At call The Bank’s cost of fund plus a fixed interest rate

per annum

634 824

National Leasing Co., Ltd. Promissory note At call The Bank’s cost of fund plus a fixed interest rate

per annum

77 -

Thanachart Legal and Appraisal Co., Ltd.

Promissory note At call The Bank’s cost of fund plus a fixed interest rate

per annum

10 -

Related company NFS Asset Management Co., Ltd.

Promissory note - 3,650

Total 2,889 12,619



26

10.10 Classification of loans under the Bank of Thailand’s guidelines

As at 31 December 2009 and 2008, the Bank classified and made allowances against its loans (including loans to financial institutions which presented as part of interbank and money market items) in accordance with the BOT’s guidelines as summarised below.


Debt balance/ book value (1)

Debt balance net of collateral (2)

Minimum percentage

Allowance for doubtful accounts

2009 2008 2009 2008 (Percent) 2009 2008 Loans and accrued interest

receivables (including interbank and money market items)

Normal 308,928 280,590 84,895 75,170 1 909 752 Special mention 17,830 24,186 7,396 8,905 2 188 178 Substandard 1,336 1,547 968 1,163 100 968 1,163 Doubtful 2,005 1,629 1,181 1,156 100 1,181 1,156 Doubtful of loss 5,046 4,029 4,258 3,019 100 4,258 3,019 Total 335,145 311,981 98,698 89,413 7,504 6,268 Additional allowance for possible uncollectability debts 214 97 Total 7,718 6,365

(1) Debt balance/book value for normal and special mention loans are excluded accrued interest receivables. (2) Debt balance net of collateral for substandard, doubtful and doubtful of loss loans are debt balance remaining after deducting the

present value of expected future cash flows from debt collection or from disposal of collaterals.

10.11 Loan in companies which have settlement problems

As at 31 December 2009 and 2008, part of the Bank and its subsidiaries’ loans in the consolidated financial statements and the separate financial statements included debts due from companies with weak financial position and poor operating results:

Consolidated financial statements Allowance for doubtful accounts provided Number of debtors Debt balance Collateral value in the accounts 2009 2008 2009 2008 2009 2008 2009 2008

Million Baht Million Baht Million Baht Million Baht Million Baht Million Baht 1. Listed companies vulnerable to 3 2 311 263 44 57 267 206 delisting from the SET 2. Non - listed companies with 14 13 835 858 815 809 281 284 similar operating results and financial positions to listed companies vulnerable to delisting from the SET 3. Companies which have loan 651 541 1,129 1,051 896 865 399 404 settlement problems or have defaulted on the repayment



27

Separate financial statements Allowance for doubtful accounts provided Number of debtors Debt balance Collateral value in the accounts 2009 2008 2009 2008 2009 2008 2009 2008

Million Baht Million Baht Million Baht Million Baht Million Baht Million Baht 1. Listed companies vulnerable to 3 2 311 263 44 57 267 206 delisting from the SET 2. Non - listed companies with 14 13 835 858 815 809 281 284 similar operating results and financial positions to listed companies vulnerable to delisting from the SET 3. Companies which have loan 522 415 1,105 959 896 746 375 387 settlement problems or have defaulted on the repayment

10.12 Classification of securities business receivables in accordance with the Notification of the Securities and Exchange Commission

As at 31 December 2009 and 2008, a subsidiary company operating in the securities business classified its securities business receivables and accrued interest receivables and provided related allowance for doubtful accounts in accordance with the Notification of the Securities and Exchange Commission (SEC) as follows:

(Unit: Million Baht) Receivable and accrued

interest receivables Allowance for doubtful

accounts as required by SEC Allowance for doubtful accounts

provided in the accounts 2009 2008 2009 2008 2009 2008 Doubtful 313 296 313 296 313 296 Substandard 3 4 - - 2 2 Total 316 300 313 296 315 298

The above substandard receivables were the outstanding debt balance which equal to the pledged securities.

10.13 Hire purchase receivables/financial lease receivables of subsidiaries separate by aging

As at 31 December 2009 and 2008, loans in consolidated financial statements which included hire purchase and financial lease receivables of three subsidiary companies engaged in hire purchase and financial lease businesses are classified by the due date of the contracts (after elimination) as follows:

(Unit: Million Baht) 2009 2008 Current or overdue less than 90 days 3,586 5,187 Overdue 91 - 365 days 141 207 Overdue more than 1 year 58 45 Debtors under legal actions 93 136 Total 3,878 5,575 Allowance for doubtful accounts provided in the accounts 344 433



28

11. Allowance for doubtful accounts (Unit: Million Baht)

For the year ended 31 December 2009 Separate financial statements

Normal Special mention

Sub-standard Doubtful

Doubtful of loss

General provision Total

Subsidiary companies Eliminations Consolidated

Balance - beginning of the year 752 178 1,163 1,156 3,019 97 6,365 731 (29) 7,067

Increase (decrease) during the year 157 10 (195) 25 2,690 117 2,804 279 15 3,098

Bad debts recovery - - - - 52 - 52 12 - 64 Bad debts written-off - - - - (1,503) - (1,503) (363) - (1,866) Balance - end of the year 909 188 968 1,181 4,258 214 7,718 659 (14) 8,363

(Unit: Million Baht) For the year ended 31 December 2008 Separate financial statements

Normal Special mention

Sub-standard Doubtful

Doubtful of loss

General provision Total

Subsidiary companies Eliminations Consolidated

Balance - beginning of the year 626 123 964 901 1,558 350 4,522 543 (28) 5,037

Increase (decrease) during the year 126 55 199 255 3,158 (253) 3,540 393 (1) 3,932

Bad debts recovery - - - - 43 - 43 1 - 44 Bad debts written-off - - - - (1,526) - (1,526) (206) - (1,732) Reversal from disposal of loans - - - - (214) - (214) - - (214)

Balance - end of the year 752 178 1,163 1,156 3,019 97 6,365 731 (29) 7,067 12. Revaluation allowance for debt restructuring

(Unit: Million Baht) Consolidated financial statements Separate financial statements 2009 2008 2009 2008 Balance - beginning of the year 20 10 20 10 Increase during the year 31 8 31 8 Add (less): Amortised during the year (18) 2 (18) 2 Balance - end of the year 33 20 33 20

13. Classification of assets

As at 31 December 2009 and 2008, the quality of assets classified in accordance with the announcements of the Bank of Thailand are as follows:

(Unit: Million Baht) Separate financial statements Loans and accrued Property interest receivables Investments foreclosed Other assets Total

2009 2008 2009 2008 2009 2008 2009 2008 2009 2008 Normal 308,928 280,590 - - - - 129 57 309,057 280,647 Special mention 17,830 24,186 - - - - 52 68 17,882 24,254 Substandard 1,336 1,547 - - - - 3 4 1,339 1,551 Doubtful 2,005 1,629 - - - - 2 6 2,007 1,635 Doubtful of loss 5,046 4,029 126 484 43 155 69 84 5,284 4,752 Total 335,145 311,981 126 484 43 155 255 219 335,569 312,839

12. Revaluation allowance for debt restructuring

11. Allowance for doubtful accounts

13. Classification of assets



29

14. Property foreclosed

(Unit: Million Baht) Consolidated financial statements Separate financial statements For the year ended 31 December 2009 For the year ended 31 December 2009

Balance -

beginning of Balance -

end of Balance -

beginning of Balance -

end of the year Additions Disposals the year the year Additions Disposals the year Assets transferred in settlement of debts

Immovable assets 420 92 (49) 463 420 92 (49) 463 Movable assets 1,282 6,295 (7,149) 428 1,217 5,932 (6,739) 410

Assets foreclosed from purchase by bid on the open market Immovable assets 59 14 (8) 65 59 14 (8) 65

Total property foreclosed 1,761 6,401 (7,206) 956 1,696 6,038 (6,796) 938 Less: Allowance for impairment (161) (420) 537 (44) (155) (400) 512 (43) Property foreclosed - net 1,600 5,981 (6,669) 912 1,541 5,638 (6,284) 895

15. Land, premises and equipment

(Unit: Million Baht) Consolidated financial statements

Land

Buildings and buildings

improvement

Furniture, fixtures and equipments Vehicles

Assets under installation Total

Cost 31 December 2008 398 241 2,740 162 95 3,636 Additions 28 85 238 22 119 492 Transfers/Disposals - 64 79 (16) (196) (69) 31 December 2009 426 390 3,057 168 18 4,059 Accumulated depreciation 31 December 2008 - 23 1,222 80 - 1,325 Transfer/Disposals - - (37) (13) - (50) Depreciation for the year - 19 525 28 - 572 31 December 2009 - 42 1,710 95 - 1,847 Allowance for impairment 31 December 2008 - - - - - - Increase during the year 1 - - - - 1 31 December 2009 1 - - - - 1 Net book value 31 December 2008 398 218 1,518 82 95 2,311 31 December 2009 425 348 1,347 73 18 2,211 Depreciation charge included in the income statements for the years ended 31 December 2008 476 2009 572

15. Land, premises and equipment

14. Property foreclosed



30


Land

Buildings and building

improvement

Furniture, fixtures and equipments Vehicles

Assets under installation Total

Cost 31 December 2008 398 181 2,173 99 92 2,943 Additions 28 86 212 14 86 426 Transfers/Disposals - 64 71 (12) (161) (38) 31 December 2009 426 331 2,456 101 17 3,331 Accumulated depreciation 31 December 2008 - 16 867 45 - 928 Transfers/Disposals - - (17) (9) - (26) Depreciation for the year - 15 445 18 - 478 31 December 2009 - 31 1,295 54 - 1,380 Allowance for impairment 31 December 2008 - - - - - - Increase during the year 1 - - - - 1 31 December 2009 1 - - - - 1 Net book value 31 December 2008 398 165 1,306 54 92 2,015 31 December 2009 425 300 1,161 47 17 1,950 Depreciation charge included in the income statements for the years ended 31 December 2008 387 2009 478

As at 31 December 2009, the Bank and its subsidiaries have vehicles acquired under financial leases with net book values amounting to approximately Baht 71 million. In addition, the Bank and its subsidiaries have office equipment and vehicles which have been fully depreciated but are still in use with original costs, before deducting accumulated depreciation, amounting to approximately Baht 376 million (separate financial statements: Baht 45 million and Baht 164 million, respectively).

16. Intangible assets - software

(Unit: Million Baht) Consolidated financial statements For the year ended 31 December 2009

Remaining useful life

Balance - beginning of

the year Additions Disposals

Balance - end of

the year Computer software 0 - 10 years 505 116 (13) 608 Less: Amortisation (88) (46) - (134) Intangible assets - net 417 70 (13) 474 Amortisation included in the income statement for

the year 46

16. Intangible assets – software



31

(Unit: Million Baht) Separate financial statements For the year ended 31 December 2009

Remaining useful life

Balance - beginning of

the year Additions Disposals

Balance - end of

the year Computer software 0 - 9 years 413 102 (12) 503 Less: Amortisation (36) (36) - (72) Intangible assets - net 377 66 (12) 431 Amortisation included in the income statement for the year 36

As at 31 December 2009, the Bank and its subsidiaries have computer software which have been fully amortised but are still in use with original costs, before deducting accumulated amortisation, amounting to approximately Baht 31 million (separate financial statement: Baht 7 million).

17. Other assets (Unit: Million Baht) Consolidated Separate financial statements financial statements 2009 2008 2009 2008 Accrued premium insurance income 757 518 - - Other receivables 721 578 718 447 Accrued interest and dividend income receivables 533 232 394 176 VAT refundable 401 353 390 330 Prepaid leasehold rights 264 305 258 299 Other receivables - VAT paid in advance for customers 164 176 164 176 Withholding tax refundable 77 106 - 80 Others 765 619 352 364 Total 3,682 2,887 2,276 1,872 Less: Allowance for impairment (104) (108) (76) (97) Total other assets - Net 3,578 2,779 2,200 1,775

18. Deposits

18.1 Classified by type of deposits (Unit: Million Baht)

Consolidated Separate financial statements financial statements

2009 2008 2009 2008 Current 657 616 672 657 Saving 81,614 72,870 81,990 73,153 Promissory notes 66 68 66 68 Fixed deposits - Less than 6 months 66,764 64,914 66,794 65,209 - 6 months and up to 1 year 17,759 82,947 17,759 82,967 - Over 1 year 99,436 48,748 99,446 48,778 Total deposits 266,296 270,163 266,727 270,832

17. Other assets

18. Deposits



32

18.2 Classified by the remaining period of contracts (Unit: Million Baht)


Not over 1 year * 221,005 268,749 221,436 269,418 Over 1 year 45,291 1,414 45,291 1,414 Total deposits 266,296 270,163 266,727 270,832

* Included expired contracts

18.3 Classified by currency and countries

(Unit: Million Baht) Consolidated financial statements 2009 2008 Domestic Foreign Total Domestic Foreign Total

Baht 266,206 - 266,206 270,093 - 270,093 US Dollar 44 6 50 64 1 65 Other currencies 39 1 40 5 - 5 Total 266,289 7 266,296 270,162 1 270,163

(Unit: Million Baht) Separate financial statements 2009 2008 Domestic Foreign Total Domestic Foreign Total

Baht 266,637 - 266,637 270,762 - 270,762 US Dollar 44 6 50 64 1 65 Other currencies 39 1 40 5 - 5 Total 266,720 7 266,727 270,831 1 270,832

.

19. Interbank and money market items (liabilities) (Unit: Million Baht) Consolidated financial statements 2009 2008 At call Term Total At call Term Total

Domestic Commercial banks 6 1,150 1,156 61 - 61 Other banks - 534 534 - - - Finance companies and securities

companies 4,773 3,545 8,318 3,921 493 4,414 Other financial institutions 4,298 1,430 5,728 2,005 804 2,809 Total domestic items 9,077 6,659 15,736 5,987 1,297 7,284 Foreign US Dollar - 5,038 5,038 - - - Baht currency 35 130 165 7 - 7 Total foreign items 35 5,168 5,203 7 - 7 Total 9,112 11,827 20,939 5,994 1,297 7,291

19. Interbank and money market items (liabilities)



33

(Unit: Million Baht) Separate financial statements 2009 2008 At call Term Total At call Term Total

Domestic Commercial banks 6 1,150 1,156 11 - 11 Other banks - 534 534 - - - Finance companies and securities

companies 5,046 3,745 8,791 3,946 493 4,439 Other financial institutions 4,800 1,681 6,481 2,106 1,106 3,212 Total domestic items 9,852 7,110 16,962 6,063 1,599 7,662 Foreign US Dollar - 5,038 5,038 - - - Baht currency 35 130 165 7 - 7 Total foreign items 35 5,168 5,203 7 - 7 Total 9,887 12,278 22,165 6,070 1,599 7,669

As at 31 December 2009, interbank and money market items (liabilities) included deposits and borrowing from BNS (the other major shareholder) of Baht 5,014 million. (2008: Deposits of Baht 8 million).

20. Borrowings

As at 31 December 2009 and 2008, domestic borrowings are as follows: (Unit: Million Baht)

Interest rate per annum Consolidated financial statements Separate financial statements Type of borrowings (as at 31 December 2009) Maturity date 2009 2008 2009 2008

Short-term borrowings Promissory notes Call - 122 - - Bills of exchange Call - 2 - 2 Bills of exchange Fixed rate of

0.91 - 4.80 percent 2009 -2010 75,200 46,956 75,936 47,926

75,200 47,080 75,936 47,928 Long-term borrowings Subordinated debentures

issued under Tier II 6.18 percent 2013 3,000 3,000 3,000 3,000

Subordinated debentures issued under Tier II

5.10 percent 2015 5,000 5,000 5,000 5,000

Subordinated debentures issued under Tier II

5.25 percent 2019 and 2024 7,000 - 7,000 -

Bills of exchange 2010 - 6,070 - 6,360 15,000 14,070 15,000 14,360

Total borrowings 90,200 61,150 90,936 62,288 On 8 December 2006, the Bank issued 3,000,000 units of subordinated, unsecured and unconvertible debentures, with a face value of Baht 1,000 each. The debenture mature in 2013 and bear interest at a fixed interest rate of 6.18 percent per annum, payable semi-annually. On 9 May 2008, the Bank issued 5,000,000 units of subordinated, unsecured, unconvertible debentures with no debenture holders’ representative, with a face value of Baht 1,000 each. The debenture mature in 2015 and bear interest at a fixed interest rate of 5.1 percent per annum for the first three years and 6 percent per annum for the fourth to seventh years, payable quarterly.

20. Borrowings



34

On 3 April 2009, the Bank issued 2,000,000 units of subordinated, in name certificate, unsecured, unconvertible debenture with debenture holders’ representative, with a face value of Baht 1,000 each. The debenture mature in 2019 and bear interest at a fixed interest rate of 5.25 percent per annum for the first three years, 5.75 percent per annum for the fourth to seventh years and 6.5 percent per annum for the eighth to tenth years, payable quarterly. After 5 years, the Bank has call option to early redemption these debentures if the conditions as specified are met. On 24 July 2009, the Bank issued 5,000,000 units of name registered subordinated, unsecured, unconvertible debenture with debenture holders’ representative, with a face value of Baht 1,000 each. Of these, 3.5 million units mature in 2019 and bear interest at a fixed interest rate of 5.25 percent per annum for the first five years and 5.5 percent per annum for the sixth to tenth years, while 1.5 million units mature in 2024 and bear interest at a fixed interest rate of 5.25 percent per annum for the first five years, 6.0 percent per annum for the sixth to tenth years and 6.5 percent per annum for the eleventh to fifteenth years, payable quarterly. After 5 years, the Bank has call option to early redemption these debentures if the conditions as specified are met. As at 31 December 2009, borrowings amounting to Baht 9,628 million are borrowed from Thanachart Capital Plc., the parent company (2008: Baht 6,372 million).

21. Other liabilities (Unit: Million Baht)


Other payables 383 284 282 216 Loss reserves and outstanding claims from

insurance/life assurance 872 786 - - Suspense cash received from account

receivables 736 750 736 750 Insurance premium payable 86 264 147 172 Unearned income from hire purchase 193 212 193 212 Provision for corporate income tax 586 421 586 421 Others 970 687 647 442 Total other liabilities 3,826 3,404 2,591 2,213

22. Share capital

On 8 January 2009, the Extraordinary Meeting of Shareholders of the Bank approved a decrease and an increase in the Bank’s registered share capital as follows: - Approved a decrease in the share capital from Baht 21,346,192,920 (2,134,619,292 shares with a par

value of Baht 10) to Baht 17,346,192,920 (1,734,619,292 shares with a par value of Baht 10) by reduction 400,000,000 unissued ordinary shares with a par value of Baht 10. The Bank registered such decrease with the Ministry of Commerce on 15 January 2009.

- Approved an increase in the share capital from Baht 17,346,192,920 (1,734,619,292 shares with a par value of Baht 10) to Baht 19,346,192,920 (1,934,619,292 shares with a par value of Baht 10) by issuance of additional 200,000,000 shares with a par value of Baht 10. The Bank registered such increase with the Ministry of Commerce on 20 January 2009. The Bank called up and registered paid-up share capital of Baht 1,999,999,800 on 29 May 2009.

22. Share capital

21. Other liabilities



35

On 6 October 2009, the Extraordinary Meeting of Shareholders of the Bank approved a decrease and an increase in the Bank’s registered share capital as follows: - Approved a decrease in the share capital from Baht 19,346,192,920 (1,934,619,292 shares with a par

value of Baht 10) to Baht 19,346,192,720 (1,934,619,272 shares with a par value of Baht 10) by reduction 20 unissued ordinary shares with a par value of Baht 10. The Bank registered such decrease with the Ministry of Commerce on 16 October 2009.

- Approved an increase in the share capital from Baht 19,346,192,720 (1,934,619,272 shares with a par value of Baht 10) to Baht 59,346,192,720 (5,934,619,272 shares with a par value of Baht 10) by issuance of additional 4,000,000,000 shares with a par value of Baht 10. The Bank registered such increase with the Ministry of Commerce on 20 October 2009.

23. Revaluation surplus (deficit) on investments (Unit: Million Baht) Consolidated financial statements Separate financial statements 2009 2008 2009 2008

Revaluation surplus on investments Available-for-sale investments Debt instruments 450 284 405 231 Equity instruments 196 37 1 11 Held-to-maturity investments (transfer from

available-for-sale investments) - 1 - 1 Surplus recognised for an associated

company - under equity method - net 119 - - - Total 765 322 406 243 Revaluation deficit on investments Available-for-sale investments Debt instruments (5) 1 (1) - Equity instruments (213) (1,036) (14) (275) Held-to-maturity investments (transfer from

available-for-sale investments) (164) (259) (177) (263) Deficit recognised for an associated

company - under equity method - net - (93) - - Total (382) (1,387) (192) (538) Revaluation surplus (deficit) on investments 383 (1,065) 214 (295)

24. Statutory reserve

Pursuant to Section 116 of the Public Limited Companies Act B.E. 2535, the Bank is required to set aside a statutory reserve at least 5 percent of its net income after deducting accumulated deficit brought forward (if any) until the reserve reaches 10 percent of the registered capital. The statutory reserve is not available for dividend distribution. As at 31 December 2009, the Bank allocated Baht 177,369,669 of net income for the year 2009 to the statutory reserve.

25. Capital funds

The primary objectives of the Bank’s capital management are to maintain the Bank’s ability to continue as a going concern and to maintain a capital adequacy ratio in accordance with the Act on Undertaking of Banking business B.E. 2551.

23. Revaluation surplus (deficit) on investments

25. Capital funds

24. Statutory reserve



36

(Unit: Million Baht) 2009 2008

Tier I Issued and fully paid up share capital 19,346 17,346 Share premium 2,101 2,101 Statutory reserve 245 127 Retained earnings - unappropriated 1,953 687 Total 23,645 20,261 Tier II Subordinated debentures 13,800 7,400 Reserve for loans classified as normal 1,125 850 Total 14,925 8,250 Total Tier I and Tier II 38,570 28,511 Less: Net revaluation deficit on equity instruments (13) (264) Total capital funds 38,557 28,247 As at 31 December 2009 and 2008, the Bank’s capital ratios, calculated based on the BOT’s regulation relating to the calculation of capital funds announced by the BOT, are as follows: 2009 2008 Minimum Minimum Capital ratio requirement Capital ratio requirement of the Bank by BOT of the Bank by BOT Total capital to risk assets (percent) 14.10 8.50 11.18 8.50 Total Tier I to risk assets (percent) 8.65 4.25 8.02 4.25 The Bank will disclose capital maintenance information as at 31 December 2009 in accordance with the Notification of the Bank of Thailand Re: Public Disclosure of Capital Maintenance Information for Commercial Banks on its web site at www.thanachartbank.co.th, within April 2010. In addition, the Bank had disclosed the latest capital maintenance information as at 30 June 2009 on its web site since 28 September 2009.

26. Dividends

Dividends Approved by Total dividends Dividend per share

Million Baht Baht Dividends on earning for

the year 2008 Annual General Meeting of the Shareholders on 28 April 2009 971 0.56

Dividends on earning for the year 2007

Annual General Meeting of the Shareholders on 23 April 2008 746 0.43

27. Bad debts and doubtful accounts

Bad debts and doubtful accounts in the statements of income for the years ended 31 December 2009 and 2008 consisted of the following:

26. Dividends

27. Bad debts and doubtful accounts



37

(Unit: Million Baht) Consolidated financial statements Separate financial statements 2009 2008 2009 2008 Bad debts and doubtful accounts of loans 3,098 3,932 2,804 3,540 Increase (reversal) bad debts and doubtful accounts of

interbank and money market items (26) 21 - (3) Amortisation of revaluation allowance for debts

restructured during the year (additional setup) (18) 2 (18) 2 Total bad debts and doubtful accounts 3,054 3,955 2,786 3,539

28. Loss on investments

Loss on investments for the years ended 31 December 2009 and 2008 consisted of the following: (Unit: Million Baht)

Consolidated financial statements Separate financial statements 2009 2008 2009 2008 Reversal (increase) of impairment of investments 228 (242) 98 (98) Realised gain (loss) on disposals

Trading securities 14 (9) 4 - Available-for-sale securities (473) (169) (164) (108) Investments in an associated company 3 - - -

Gain on return of ordinary share capital 1 - - - Unrealised gain on change in value 5 - 5 - Total loss on investments (222) (420) (57) (206)

29. Gain (loss) on property foreclosed and other assets

Gain (loss) on property foreclosed and other assets for the years ended 31 December 2009 and 2008 consisted of the following:

(Unit: Million Baht) Consolidated financial statements Separate financial statements 2009 2008 2009 2008 Realised gain (loss) on disposal of property foreclosed

and other assets 14 (16) 15 (20) Reversal of allowance for impairment (increase in

allowance for impairment) 117 (69) 112 (64) Total gain (loss) on property foreclosed and other assets 131 (85) 127 (84)

28. Loss on investments

29. Gain (loss) on property foreclosed and other assets



38

30. Directors’ remuneration

Directors’ remuneration represents the benefits paid to the directors of the Bank and a public subsidiary company in accordance with Section 90 of the Public Limited Companies Act, including the payment of remuneration amounting to approximately Baht 8 million to the Bank’s directors, which was approved by the Annual General Meeting of Shareholders held on 28 April 2009, exclusive of salaries and related benefits payable to directors who hold executive positions.

31. Corporate income tax

Corporate income tax was calculated on net income for the year, after adding back expenses and provisions which are disallowable for tax computation purposes and deducting income which is exempted for tax computation purposes. From 1 January 2007, the Bank changed the method of recording property foreclosed – movable assets from recording the cost of such assets at the book value of the receivables on the transfer date, to recording them at the fair value (with reference to appraisal value less estimated selling expenses), providing this does not exceed the legal claim over such receivables. In this regard, the Bank restated the 2006 financial statements to reflect the change, of which the effect was to decrease corporate income tax of the year 2006 by Baht 102 million. In May 2008, the Bank received such tax refund from the Revenue Department and presented such amount under “Corporate income tax refundable” in the income statement.

32. Earnings per share

Basic earnings per share is calculated by dividing net income of the Bank’s portion for the year by the weighted average number of ordinary shares in issue during the year.

33. Provident fund

The Bank, its subsidiaries and its employees have jointly established a provident fund in accordance with the Provident Fund Act B.E. 2530. Employees, the Bank and the subsidiaries contributed to the fund monthly at the rate of 5 percent of their basic salary. The fund will be paid to the employees upon termination of employment in accordance with the fund rules. During the year 2009, approximately Baht 108 million has been contributed to the fund by the Bank and its subsidiaries (separate financial statement: Baht 82 million).

34. Related party transactions During the years, the Bank and its subsidiaries had significant business transactions with its related parties. These transactions have been concluded on commercial terms and based agreed upon in the ordinary course of businesses between the Bank and those companies. Below is a summary of those transactions.

30. Directors’ remuneration

34. Related party transactions

33. Provident fund

32. Earnings per share

31. Corporate income tax



39

(Unit: Million Baht) Consolidated financial statements Separate financial statements Transfer pricing policy 2009 2008 2009 2008 (For the year 2009) Transactions occurred during the years Parent company Purchase of debt securities 50 - 50 - At market price Sales of debt securities 22,266 28,443 10,789 - At market price (Related gain) 2 - 1 - Sales of subordinated debentures 81 - 81 - At par value Interest income 28 294 15 287 At interest rate of 2.74 – 5.25 percent per

annum Income on supporting service 70 134 70 134 At the rate agreed under the contract,

determined with reference to cost Other income 47 46 5 - Interest expenses 254 275 253 256 At interest rate 0.75 – 6.18 percent per

annum Rental expenses 163 151 141 128 At the rate agreed under the rental contracts Other expenses 24 20 24 20 Dividend payment 495 559 495 559 As declared Subsidiary companies Purchase of debt securities - - 4,433 2,878 At market price Sales of debt securities - - 8,791 512 At market price (Related gain) - - 17 5 Sales of subordinated debentures - - 4 - At par value Purchase of investment in

subsidiary company - - - 431

Interest and dividend income - - 569 408 At interest rate of 2.16 – 3.55 percent per annum and dividend as declared

Income on supporting services - - 156 146 At the rate agreed under the contract, determined with reference to cost

Other income - - 389 285 Interest expenses - - 57 53 At interest rate of 0.5 – 4.70 percent per

annum Rental expenses - - 6 2 At the rate agreed under the rental contracts Other expenses - - 192 221 Purchase of fixed assets - - - 4 Associated company Sales of subordinated debentures 1,200 - 1,200 - At par value Interest income 1 3 1 3 At interest rate of 1.75 – 6.88 percent per

annum Other income 1 3 - - Interest expenses 30 2 30 2 At interest rate of 0.65 – 5.25 percent per

annum Rental expenses 22 21 22 21 At the rate agreed under the rental contracts Other expenses 2 1 - -




40

(Unit: Million Baht) Consolidated financial statements Separate financial statements Transfer pricing policy

2009 2008 2009 2008 (For the year 2009) Transactions occurred during the years (continued) Related companies Purchase of debt securities 648 21,047 598 1,226 At market price Sales of debt securities 7,579 21,580 2,588 607 At market price (Related gain) - 13 - 12 Sales of subordinated debentures 300 - 300 - At par value Purchase/sales of forward

exchange contracts 158,016 131,553 158,016 131,553 At market price

(Related gain (loss)) 2 (36) 2 (36) Sale of loans - 8 - 8 (Related gain) - 2 - 2 Purchase of fixed assets 68 - 68 - At the rate agreed under the contract,

determined with reference to appraisal value and market price

Interest and dividend income 136 361 102 333 At interest rate of 0.05 - 8.50 percent per annum and dividend as declared

Income on supporting services 7 9 7 9 At the rate agreed under the contract, determined with reference to cost

Other income 27 37 - - Interest expenses 34 71 34 69 At interest rate of 0.15 - 5.25 percent per

annum Rental expenses 52 38 27 15 At the rate agreed under the rental contracts Insurance/Life insurance expenses 185 7 - - At the rate agreed under the contracts Fees and services expenses 385 3 - - At the rate agreed under the contracts Other expenses 36 37 30 30 Dividend payment 476 186 476 186 As declared

39

(Unit: Million Baht) Consolidated financial statements Separate financial statements Transfer pricing policy 2009 2008 2009 2008 (For the year 2009) Transactions occurred during the years Parent company Purchase of debt securities 50 - 50 - At market price Sales of debt securities 22,266 28,443 10,789 - At market price (Related gain) 2 - 1 - Sales of subordinated debentures 81 - 81 - At par value Interest income 28 294 15 287 At interest rate of 2.74 – 5.25 percent per

annum Income on supporting service 70 134 70 134 At the rate agreed under the contract,

determined with reference to cost Other income 47 46 5 - Interest expenses 254 275 253 256 At interest rate 0.75 – 6.18 percent per

annum Rental expenses 163 151 141 128 At the rate agreed under the rental contracts Other expenses 24 20 24 20 Dividend payment 495 559 495 559 As declared Subsidiary companies Purchase of debt securities - - 4,433 2,878 At market price Sales of debt securities - - 8,791 512 At market price (Related gain) - - 17 5 Sales of subordinated debentures - - 4 - At par value Purchase of investment in

subsidiary company - - - 431

Interest and dividend income - - 569 408 At interest rate of 2.16 – 3.55 percent per annum and dividend as declared

Income on supporting services - - 156 146 At the rate agreed under the contract, determined with reference to cost

Other income - - 389 285 Interest expenses - - 57 53 At interest rate of 0.5 – 4.70 percent per

annum Rental expenses - - 6 2 At the rate agreed under the rental contracts Other expenses - - 192 221 Purchase of fixed assets - - - 4 Associated company Sales of subordinated debentures 1,200 - 1,200 - At par value Interest income 1 3 1 3 At interest rate of 1.75 – 6.88 percent per

annum Other income 1 3 - - Interest expenses 30 2 30 2 At interest rate of 0.65 – 5.25 percent per

annum Rental expenses 22 21 22 21 At the rate agreed under the rental contracts Other expenses 2 1 - -




41

The outstanding balances of the above transactions during the years ended 31 December 2009 and 2008 have been shown at the average balance at the end of each month as follows:

(Unit: Million Baht) Consolidated financial statements Separate financial statements 2009 2008 2009 2008 Parent company Loans 708 7,589 4,000 7,385 Deposits 462 700 462 700 Borrowings 7,387 4,651 7,360 4,277 Subsidiary companies Loans - - 3,877 4,525 Deposits - - 620 565 Interbank and money market items (liabilities) - - 784 185 Borrowings - - 906 714 Associated company Loans 383 87 277 48 Deposits 207 56 207 56 Borrowings 1,200 - 1,200 - Related companies Interbank and money market items (assets) 3,477 4,398 3,452 4,287 Loans 1,435 4,962 1,385 4,695 Deposits 1,567 1,403 1,567 1,403 Interbank and money market items (liabilities) 2,379 447 2,379 402 Borrowings 447 410 447 400

The significant outstanding balances of the above transactions are as follows:

(Unit: Million Baht) Consolidated financial statements 31 December 2009 Assets Liabilities Commitments

Interbank and money

market items

Investments - debt

securities

Loans and interest

receivables Other assets Deposits

Interbank and money

market items Borrowings

Interest payable

Other liabilities

Parent company Thanachart Capital Plc. - 217 22 29 129 - 9,628 26 17 - Associated company MBK Plc. - - - 8 19 - 1,200 5 - 67 Related companies Advanced Info Service Plc. - 319 44 7 2,123 - 300 2 2 17 The Stock Exchange of

Thailand - - - - 568 - - 1 1 - Dhipaya Insurance Plc. - - - 500 - - - - 15 - The Bank of Nova Scotia 189 - - 15 - 5,013 - 1 1 1,407 Other related companies 190 - 407 17 748 55 450 4 296 77

379 536 473 576 3,587 5,068 11,578 39 332 1,568



42

(Unit: Million Baht) Consolidated financial statements 31 December 2008 Assets Liabilities Commitments

Interbank and money

market items

Investments- debt

securities

Loans and interest


Interbank and money


Interest payable

Other liabilities

Parent company Thanachart Capital Plc. - 257 4,512 31 166 - 6,372 13 14 30 Associated company MBK Plc. - - - 7 65 - - - - 64 Related companies NFS Asset Management

Co., Ltd. - - 3,859 2 23 - - - - - Advanced Info Service Plc. - 714 43 22 32 - - - 6 - The Bank of Nova Scotia 7,754 - - 3 - 8 - - 4 1,228 Other related companies - - 149 19 814 94 212 11 1 58

7,754 971 8,563 84 1,100 102 6,584 24 25 1,380



43

(Unit: Million Baht) Separate financial statements 31 December 2009 Assets Liabilities Commitments

Interbank

and money market items

Investments - debt

securities

Loans and interest


Interbank and money


Interest payable

Other liabilities

Parent company Thanachart Capital Plc. - - - 24 129 - 9,628 26 11 - Subsidiary companies Thanachart Group Leasing

Co., Ltd. - - 2,173 - 27 - - - - - T Leasing Co., Ltd. - - 634 - 16 - - - - - Thanachart Securities Plc. - - - 1 - 458 - 1 1 30 Thanachart Insurance Co., Ltd. - - - 25 144 - 246 1 70 10 Thanachart Life Assurance

Co., Ltd. - - - 15 - 769 490 8 40 - National Leasing Co., Ltd. - - 77 - 2 - - - 59 - Thanachart Broker Co., Ltd. - - - - 228 - - - - - Thanachart Legal and

Appraisal Co., Ltd. - - 10 - 17 - - - - - Thanachart Training and

Development Co., Ltd. - - - - 23 - - - - - Thanachart Management

and Services Co., Ltd. - - - - 16 - - - - - Thanachart Fund

Management Co., Ltd. - - - 2 - 15 - - - - Associated company MBK Plc. - - - 7 19 - 1,200 5 - 67 Related companies Advanced Info Service Plc. - 99 43 2 2,123 - 300 2 2 17 The Stock Exchange of

Thailand - - - - 568 - - 1 - - The Bank of Nova Scotia 189 - - 15 - 5,013 - 1 1 1,407 Other related companies 133 - 400 8 748 55 450 4 1 77 322 99 3,337 99 4,060 6,310 12,314 49 185 1,608



44

(Unit: Million Baht) Separate financial statements 31 December 2008 Assets Liabilities Commitments

Interbank and money

market items

Investments - debt

securities

Loans and interest


Interbank and money


Interest payable

Other liabilities

Parent company Thanachart Capital Plc. - - 4,500 22 166 - 6,250 13 11 30 Subsidiary companies Thanachart Group

Leasing Co., Ltd. - - 3,657 1 19 - - - - - T Leasing Co., Ltd. - - 827 1 24 - - - - - Thanachart Securities Plc. - - - 2 - 19 - - - 30 Thanachart Insurance Co., Ltd. - - - 12 285 - 170 3 2 10 Thanachart Life Assurance

Co., Ltd. - - - 11 - 403 1,090 11 31 - National Leasing Co., Ltd. - - - - 5 - - - 61 - Thanachart Broker Co., Ltd. - - - - 327 - - - - - Thanachart Legal and

Appraisal Co., Ltd. - - - - 10 - - - - - Thanachart Training and

Development Co., Ltd. - - - - 41 - - - 1 - Thanachart Management and Services Co., Ltd. - - - - 10 - - - - - Thanachart Fund

Management Co., Ltd. - - - 2 - 8 - - - - Associated company MBK Plc. - - - 7 65 - - - - 64 Related companies NFS Asset Management

Co., Ltd. - - 3,650 - 23 - - - - - Advanced Info Service Plc. - 451 40 8 32 - - - 4 - The Bank of Nova Scotia 7,754 - - 3 - 8 - - 4 1,228 Other related companies - - 141 11 814 93 212 11 - 58 7,754 451 12,815 80 1,821 531 7,722 38 114 1,420



45

As at 31 December 2009 and 2008, the Bank has loans to parent, subsidiary and related companies within Thanachart Group as mentioned in Note 10.9 to the financial statements. As at 31 December 2009, the Bank and its subsidiaries have investments amounting to approximately Baht 365 million (Baht 62 million in the separate financial statement) in related companies to which they are related by means of members of their management being shareholders and/or directors of those companies (2008: Baht 220 million in the consolidated financial statement and Baht 62 million in the separate financial statement). As at 31 December 2009 and 2008, the Bank and its subsidiaries have the following related parties transactions with executive employees of the Bank and companies within Thanachart Group from department manager level up, including related persons who together with these employees:

(Unit: Million Baht) Consolidated and separate financial statements 2009 2008 Loans 48 67 Deposits 554 496 Directors and management’s remuneration During the year 2009, the Bank and its subsidiaries paid Baht 242 million for salary, bonus, meeting allowance and gratuities to their key management personnel, including directors, totalled 78 persons (separate financial statement: 24 persons totaling Baht 70 million).

35. Financial information by segment

The Bank and its subsidiaries’ business operations involve 4 principal segments: (1) Banking business; (2) Securities business; (3) Life insurance business; and (4) Non-life insurance business. These operations are carried on in Thailand. Below is the consolidated financial information of the Bank and its subsidiaries by segment.

(Unit: Million Baht) For the year ended 31 December 2009

Banking business

Securities business

Life insurance business

Non-life insurance business

Other business Eliminations Total

Net interest and dividend income after bad debts and doubtful accounts and loss on debt restructuring 11,313 114 419 76 286 (581) 11,627

Share of income from investments accounted for under equity method - - - - - 129 129

Non-interest income 2,814 1,479 11,646 2,695 494 (855) 18,273 Non-interest expenses (9,125) (1,074) (11,935) (2,453) (415) 825 (24,177) Corporate income tax (1,455) (134) (10) (90) (79) - (1,768) Net income 3,547 385 120 228 286 (482) 4,084

35. Financial information by segment



46

(Unit: Million Baht) For the year ended 31 December 2008

Banking business

Securities business




Net interest and dividend income after bad debts and doubtful accounts and loss on debt restructuring 6,920 112 348 96 170 (324) 7,322

Share of income from investments accounted for under equity method - - - - - 153 153

Non-interest income 2,202 1,239 4,684 2,544 592 (799) 10,462 Non-interest expenses (7,704) (1,036) (4,514) (2,551) (440) 794 (15,451) Corporate income tax (216) (95) (168) (72) (137) - (688) Corporate income tax refundable 102 - - - - - 102 Net income 1,304 220 350 17 185 (176) 1,900


At as 31 December 2009

Banking business

Securities business




Interbank and money market items 64,028 768 1,602 410 340 (2,403) 64,745 Investments - Net 64,643 835 14,827 2,730 64 (4,497) 78,602 Loans and accrued interest receivable - Net 275,108 1,629 5 - 3,624 (2,970) 277,396

Land, premises and equipment - Net 1,950 68 150 28 15 - 2,211 Other assets 8,149 563 957 492 76 (221) 10,016 Total assets 413,878 3,863 17,541 3,660 4,119 (10,091) 432,970


At as 31 December 2008

Banking business

Securities business




Interbank and money market items 63,691 626 2,838 477 442 (2,371) 65,703 Investments - Net 26,586 701 5,788 2,037 65 (4,465) 30,712 Loans and accrued interest receivable - Net 266,843 1,810 2 - 5,233 (4,545) 269,343

Land, premises and equipment - Net 2,014 107 139 34 16 - 2,310 Other assets 9,080 175 284 663 254 (223) 10,233 Total assets 368,214 3,419 9,051 3,211 6,010 (11,604) 378,301



47

36. Commitments and contingent liabilities As at 31 December 2009 and 2008, significant commitments and contingent liabilities consisted of:

36.1 (Unit: Million Baht)

Consolidated financial statements 2009 2008 Foreign Foreign Baht currency Total Baht currency Total Aval to bills 294 2 296 118 - 118 Liability under unmatured import bills - 87 87 69 374 443 Letter of credits 9 1,001 1,010 1 663 664 Other obligations Foreign exchange contracts - Bought - 9,086 9,086 - 8,519 8,519 - Sold - 20,524 20,524 - 36,161 36,161 Cross currency and interest rate swap contracts - Bought - 4,937 4,937 - 5,169 5,169 - Sold - 7,785 7,785 - 4,846 4,846 Interest rate swap contracts - Bought 19,870 334 20,204 12,270 - 12,270 - Sold 19,870 334 20,204 12,270 - 12,270 Committed (but not draw) overdraft 4,861 - 4,861 4,164 - 4,164 Others 4,223 57 4,280 3,083 34 3,117 Total 49,127 44,147 93,274 31,975 55,766 87,741


Separate financial statements 2009 2008 Foreign Foreign Baht currency Total Baht currency Total Aval to bills 294 2 296 118 - 118 Liability under unmatured import bills - 87 87 69 374 443 Letter of credits 9 1,001 1,010 1 663 664 Other obligations Foreign exchange contracts - Bought - 9,086 9,086 - 8,519 8,519 - Sold - 20,524 20,524 - 36,161 36,161 Cross currency and interest rate swap contracts - Bought - 4,937 4,937 - 5,169 5,169 - Sold - 7,785 7,785 - 4,846 4,846 Interest rate swap contracts - Bought 19,570 334 19,904 11,970 - 11,970 - Sold 19,570 334 19,904 11,970 - 11,970 Committed (but not draw) overdraft 4,861 - 4,861 4,164 - 4,164 Others 4,158 57 4,215 3,037 34 3,071 Total 48,462 44,147 92,609 31,329 55,766 87,095

36. Commitments and contingent liabilities



48

36.2 During the years 2001 and 2002, the Bank entered into agreements to transfer non-performing loans and receivables of approximately Baht 296 million to TAMC. The Bank is still jointly liable for a share of the gains and losses arising from TAMC’s management of these non-performing assets to be calculated at the end of the fifth year and tenth year, counting from 1 July 2001. If there are losses, the Bank is liable for all initial losses up to 20 percent of the transfer price, while further losses of up to another 20 percent of the transfer price are to be shared equally between the Bank and TAMC, and TAMC is liable for all remaining losses. Such gains and losses will be determined based on the accumulated value of collections made on the assets at the date of determination, minus transfer costs and all operating expenses of TAMC, including interest on the debt instruments issued to purchase the loans and receivables. The gain or loss cannot be estimated at this stage, but as at 31 December 2009, the Bank has estimated its share of losses which may arise from the management of the non-performing assets at approximately Baht 89 million. This amount has been presented as a part of allowance for impairment of long-term investments in debt securities (2008: estimated share of losses at Baht 89 million).

36.3 The Bank has entered into agreements to sell housing loans/transfer rights to the Secondary Mortgage Corporation, under which it is committed to compensate the Corporation for losses from uncollected housing loans up to a maximum of 20 percent of the valuation of the said receivables. As at 31 December 2009, its maximum obligation is Baht 2 million.

36.4 As at 31 December 2009, the Bank and its subsidiaries have commitments to pay the service fees in relation to property foreclosed, computer system services and other services, including commitments in respect of office rental and related service fees under long-term rental contracts, as follow:

(Unit: Million Baht) Consolidated financial statements Separate financial statements Other Parent Other Parent Subsidiary

Year parties company parties company companies 2010 535 147 480 127 12 2011 266 106 235 88 -

2012 onward 380 46 321 35 -

In addition, the Bank has obligations to pay an administrative fee to a subsidiary company, determined at actual cost plus a margin, for the period stipulated in the agreement.

36.5 As at 31 December 2009, a subsidiary company has commitment under a research support and distribution services agreement made with an overseas company, whereby it must pay service charges on a quarterly basis at the rate specified in the agreement. The agreement will expire on 30 September 2010.

36.6 Under the agreements among the Parent company, the Bank and the Bank of Nova Scotia Asia Limited (“BNSAL”) (BNSAL had transferred all rights and obligations under these agreements to the Bank of Nova Scotia (“BNS”) on 11 January 2008), the Parent company and the Bank have to disclose information relating to the business, business performance, operations, and legal compliance of the Bank and the Bank’s subsidiaries, and certify the correctness of the disclosed information, to assist BNS in deciding whether to purchase shares in the Bank. In the event that the Bank or its subsidiaries have to pay any damages, compensation or penalties to any other parties as a result of events or information that the Parent company and the Bank did not disclose to BNS before BNS purchased the shares of the Bank, the Parent company and the Bank will jointly compensate BNS for its losses in accordance with the principles stipulated in the agreements, but not beyond the prescription period stipulated by Thai laws for each claim for damage.



49

In addition, under the Shareholders’ Agreement between the Parent company and BNS, there are mutual agreements whereby the Parent company, the Bank and the Bank’s subsidiaries, and BNS have certain stipulated rights and obligations per the conditions therein with no expiry date. However, the management of the Bank and the Parent company believe that the Bank and the Bank’s subsidiaries, and the Parent company operate their businesses under adequate supervision and therefore no material losses will result that would significantly affect the Parent company, the Bank and its subsidiaries’ financial positions.

37. Litigation

As at 31 December 2009, the Bank and its subsidiaries have contingent liabilities amounting to approximately Baht 546 million (separate financial statements: Baht 492 million) as a result of litigation. However, the Bank and its subsidiaries’ management expect that no losses will result and therefore no liabilities are currently recorded.

38. Financial instruments

Financial instruments are any contracts which give rise to both a financial assets of one enterprise and a financial liability or equity instruments of another enterprise.

38.1 Credit risk

Credit risk is the risk that the party to a financial instrument will fail to fulfill the obligation, causing the Bank and its subsidiaries to incur a financial loss. The amount of maximum credit risk exposure is the carrying amount of the financial assets less provision for losses as stated in the balance sheet and the off-balance sheet transactions of avals, guarantees of loans, other guarantees and derivative contracts. In addition, the Bank and its subsidiaries manage credit risk by the following means, in through careful consideration of credit approval process, analysis of risk factors, the ability to service debt of customers and credit review process, which examines and reviews the quality of the loan portfolio so as to prevent and provide a remedy for problem loans in the future.

38.2 Market risk

Market risk is the risk that changes in interest rates, foreign exchange rates and securities prices may have an effect on the Bank and its subsidiaries’ foreign currency position and investment status. As such, market risk consists of interest rate risk, foreign exchange risk and equity position risk. a) Interest rate risk Interest rate risk is the risk that the value of financial instrument will fluctuate as a result of changes in market interest rates. The Bank and its subsidiaries manage the changes in interest rate risk by means of an appropriate structuring of holdings in assets and liabilities with different repricing dates, taking into account the direction of market interest rates, in order to generate a suitable yield while maintaining risk at acceptable levels. Such management is under the supervision of the Asset and Liability Management Committee.

38. Financial instruments

37. Litigation



50

As at 31 December 2009 and 2008, financial assets and liabilities classified by types of interest rate are as follows:

(Unit: Million Baht) Consolidated financial statements 2009 2008 Floating Fixed Non- Floating Fixed Non-

interest interest interest interest interest interest Transactions rate rate bearing Total rate rate bearing Total

Financial assets Cash - - 3,665 3,665 - - 4,018 4,018 Interbank and money market items 526 60,143 4,039 64,708 305 60,876 4,371 65,552 Investments - 74,526 3,736 78,262 - 27,547 4,208 31,755 Receivable from clearing house - - 429 429 - - 50 50 Loans(1) 43,278 240,401 1,836 285,515 38,353 235,650 2,139 276,142 Financial liabilities Deposits 86,386 179,298 612 266,296 76,259 193,288 616 270,163 Interbank and money market items 8,672 11,827 440 20,939 5,330 1,347 614 7,291 Payment to clearing house - - 96 96 - - 295 295 Securities business payable - - 1,036 1,036 - - 855 855 Liabilities payable on demand - - 2,112 2,112 - - 1,317 1,317 Borrowings - 90,200 - 90,200 - 61,150 - 61,150 (1) The outstanding balances of loans which have floating interest rates or fixed interest rates include loans on which interest recognition is

discontinued.


(1) The outstanding balances of loans which have floating interest rates or fixed interest rates include loans on which interest recognition is discontinued.

Separate financial statements 2009 2008 Floating Fixed Non- Floating Fixed Non-

interest interest interest interest interest interest Transactions rate rate bearing Total rate rate bearing Total

Financial assets Cash - - 3,665 3,665 - - 4,017 4,017 Interbank and money market items 350 59,736 3,909 63,995 18 59,236 4,272 63,526 Investments - 59,323 5,035 64,358 - 21,216 5,612 26,828 Loans(1) 42,025 239,500 1,052 282,577 37,340 234,675 910 272,925 Financial liabilities Deposits 86,761 179,339 627 266,727 76,543 193,632 657 270,832 Interbank and money market items 9,400 12,278 487 22,165 5,432 1,599 638 7,669 Liabilities payable on demand - - 2,112 2,112 - - 1,317 1,317 Borrowings - 90,936 - 90,936 - 62,288 - 62,288



51

With respect to financial instruments that carry fixed interest rates, the periods from the balance sheet date to the repricing or maturity date (whichever is the earlier) are presented below: (Unit: Million Baht)

Consolidated financial statement as at 31 December 2009 Repricing or maturity date Weighted 0 - 3 3 - 12 1 - 5 Over 5 average

Transactions At call months months years years Total interest rates Percent Financial assets Interbank and money market items 107 58,561 1,475 - - 60,143 1.19 - 1.70 Investments - 7,504 20,555 37,177 9,290 74,526 2.81 - 4.08 Loans 1,521 6,608 14,764 182,996 34,512 240,401 7.98 - 9.44 Financial liabilities Deposits - 60,860 74,006 44,432 - 179,298 1.76 Interbank and money market items - 10,654 867 306 - 11,827 0.92 Borrowings - 58,327 16,873 15,000 - 90,200 2.35

(Unit: Million Baht) Consolidated financial statement as at 31 December 2008 Repricing or maturity date Weighted 0 - 3 3 - 12 1 - 5 Over 5 average

Transactions At call Months months years Years Total interest rates Percent Financial assets Interbank and money market items 129 60,547 200 - - 60,876 2.59 - 3.89 Investments - 3,525 8,438 13,986 1,598 27,547 4.18 - 4.59 Loans 9,012 6,330 12,239 166,172 41,897 235,650 7.97 - 9.99 Financial liabilities Deposits 4 107,810 85,432 42 - 193,288 3.49 Interbank and money market items 50 1,060 237 - - 1,347 3.56 Borrowings 124 38,280 8,676 14,070 - 61,150 3.71


Separate financial statement as at 31 December 2009 Repricing or maturity date Weighted 0 - 3 3 - 12 1 - 5 Over 5 average

Transactions At call months months years Years Total interest rates Percent Financial assets Interbank and money market items 107 58,361 1,268 - - 59,736 1.19 Investments - 4,755 19,517 32,068 2,983 59,323 2.81 Loans 4,390 6,569 14,352 180,604 33,585 239,500 7.98 Financial liabilities Deposits - 60,860 74,047 44,432 - 179,339 1.76 Interbank and money market items - 10,255 1,717 306 - 12,278 0.92 Borrowings - 58,673 17,263 15,000 - 90,936 2.35



52


Separate financial statement as at 31 December 2008 Repricing or maturity date Weighted 0 - 3 3 - 12 1 - 5 Over 5 average

Transactions At call months months years years Total interest rates Percent Financial assets Interbank and money market items 129 59,107 - - - 59,236 2.59 Investments - 1,877 7,448 11,316 575 21,216 4.59 Loans 13,463 6,276 11,880 162,548 40,508 234,675 7.97 Financial liabilities Deposits 4 108,104 85,482 42 - 193,632 3.49 Interbank and money market items - 1,211 388 - - 1,599 3.56 Borrowings 2 38,750 9,176 14,360 - 62,288 3.71 In addition, the average balances of the financial assets and liabilities of the Bank and its subsidiaries generating revenues and expenses, calculated based on the average balances outstanding during the year, and the average interest and dividend rate for the year ended 31 December 2009 and 2008 can be summarised as follows:

(Unit: Million Baht) Consolidated financial statements For the years ended 31 December

2009 2008

Average Interest and Average Average Interest and Average balances dividend rate (%) balances dividend rate (%)

Interest bearings financial assets Interbank and money market items 58,662 1,046 1.78 40,042 1,529 3.82 Securities purchased under resale agreements - - - 962 31 3.24 Investments 40,432 1,545 3.82 23,659 1,243 5.25 Loans/hire purchase and finance leases 264,639 18,879 7.13 266,284 17,884 6.72 Interest bearings financial liabilities Deposits 263,191 4,873 1.85 229,311 7,031 3.07 Interbank and money market items 14,601 120 0.82 6,843 184 2.69 Borrowings 58,042 1,743 3.00 55,855 2,182 3.91


Separate financial statements For the years ended 31 December

2009 2008 Average Interest and Average Average Interest and Average balances dividend rate (%) balances dividend rate (%)

Interest bearings financial assets Interbank and money market items 56,683 1,022 1.80 39,608 1,480 3.74 Securities purchased under resale agreements - - - 962 31 3.24 Investments 33,417 1,607 4.81 23,845 1,094 4.59 Loans/hire purchase and finance leases 263,003 18,305 6.96 264,135 17,291 6.55 Interest bearings financial liabilities Deposits 263,769 4,880 1.85 229,837 7,046 3.07 Interbank and money market items 15,112 141 0.93 6,835 191 2.79 Borrowings 58,868 1,770 3.01 56,194 2,191 3.90



53

b) Foreign exchange risk Foreign exchange risk is the risk that changes in foreign exchange rates may result in changes in the value of financial instruments, and fluctuations in revenues or the values of financial assets and liabilities. Since the Bank has foreign exchange transactions, it may be exposed to foreign exchange risk. However, the Bank has a policy to hedge this foreign exchange exposure through management of its net exchange position and operating in accordance with a risk management policy which has been approved by its Board of Directors and is in strict accordance with BOT guidelines. The status of the Bank foreign currency balances as at 31 December 2009 and 2008 can be summarised as follows:

(Unit: Million Baht) Consolidated and separate financial statements 2009 2008 Outstanding balance of financial instruments Outstanding balance of financial instruments

US Dollar Euro Yen Others US Dollar Euro Yen Others In balance foreign currency Cash 109 41 4 48 50 98 88 36 Interbank and money market items 7,772 55 15 61 20,658 98 65 47 Investments 5,740 - 170 4,282 699 - - 4,148 Loans 2,317 4 - - 955 68 - - Other assets 53 - - 14 8 - - 12 Total assets 15,991 100 189 4,405 22,370 264 153 4,243 Deposits 50 2 - 38 65 - - 5 Interbank and money market items 6,071 - - - - - - - Total liabilities 6,121 2 - 38 65 - - 5 Net 9,870 98 189 4,367 22,305 264 153 4,238 Off balance foreign currency Aval to bills - 2 - - - - - - Liability under unmatured import bills 9 - 78 - 291 - 83 - Letter of credits 807 188 - 6 472 165 - 26 Foreign exchange contracts

- Bought 8,356 604 - 126 8,393 10 27 89 - Sold 19,185 732 252 355 35,239 398 281 243

Cross currency and interest rate swap contracts - Bought 4,937 - - - 5,169 - - - - Sold 3,503 - - 4,282 699 - - 4,147

Interest rate swap contracts - Bought 334 - - - - - - - - Sold 334 - - - - - - -

Others 57 - - - 34 - - - c) Equity position risk Equity position risk is the risk that changes in the market prices of equity securities which will result in fluctuations in revenue and the value of financial assets.



54

38.3 Liquidity risk

Liquidity risk is the risk that the Bank and its subsidiaries will be unable to liquidate their financial assets and/or procure sufficient funds to discharge their obligations in a timely manner, resulting in the Bank and its subsidiaries incurring a financial loss. The Bank and its subsidiaries manage liquidity risk by means of appropriate structuring of short-term and long-term sources of capital. In addition, the Bank has a policy to maintain liquidity to ensure that it has sufficient liquidity to meet both present and future requirements. Counting from the balance sheet date, the periods to maturity of financial instruments held as at 31 December 2009 and 2008 are as follows:

(Unit: Million Baht) Consolidated financial statements 2009 2008 Less than Over Less than Over

Transactions At call 1 year 1 year Unspecified Total At call 1 year 1 year Unspecified Total Financial assets Cash 3,665 - - - 3,665 4,018 - - - 4,018 Interbank and money market

items (1) 4,672 60,036 - - 64,708 5,105 60,447 - - 65,552 Investments - 22,990 51,691 3,581 78,262 - 6,886 20,701 4,168 31,755 Receivable from clearing

house - 429 - - 429 - 50 - - 50 Loans (2) 11,748 90,677 183,090 - 285,515 19,640 77,571 178,931 - 276,142 Financial liabilities Deposits 82,407 138,598 45,291 - 266,296 73,686 195,063 1,414 - 270,163 Interbank and money market

items 9,112 11,521 306 - 20,939 5,994 1,297 - - 7,291 Payable to clearing house - 96 - - 96 - 295 - - 295 Securities business payable - 1,036 - - 1,036 - 855 - - 855 Liability payable on demand 2,112 - - - 2,112 1,317 - - - 1,317 Borrowings - 75,200 15,000 - 90,200 124 46,956 14,070 - 61,150 Off-balance sheet items Aval to bill 8 133 155 - 296 - 106 12 - 118 Liability under unmatured

import bills - 87 - - 87 - 360 83 - 443 Letter of credits 54 887 69 - 1,010 48 616 - - 664 Other commitments 5,013 54,884 29,898 2,086 91,881 4,310 51,611 29,534 1,061 86,516 (1) The outstanding balances of interbank and money market items at call included the item for which revenue recognition has been discontinued. (2) The outstanding balances of loans at call included loans for which revenue recognition has been discontinued.



55

(Unit: Million Baht) Separate financial statements 2009 2008 Less than Over Less than Over

Transactions At call 1 year 1 year Unspecified Total At call 1 year 1 year Unspecified Total Financial assets Cash 3,665 - - - 3,665 4,017 - - - 4,017 Interbank and money market

items 4,366 59,629 - - 63,995 4,419 59,107 - - 63,526 Investments - 18,973 40,386 4,999 64,358 - 4,248 17,008 5,572 26,828 Loans (1) 13,056 88,474 181,047 - 282,577 22,573 74,668 175,684 - 272,925 Financial liabilities Deposits 82,798 138,638 45,291 - 266,727 74,010 195,408 1,414 - 270,832 Interbank and money market

items 9,887 11,972 306 - 22,165 6,070 1,599 - - 7,669 Liability payable on demand 2,112 - - - 2,112 1,317 - - - 1,317 Borrowings - 75,936 15,000 - 90,936 2 47,926 14,360 - 62,288 Off-balance sheet items Aval to bill 8 133 155 - 296 - 106 12 - 118 Liability under unmatured

import bills - 87 - - 87 - 360 83 - 443 Letter of credits 54 887 69 - 1,010 48 616 - - 664 Other commitments 5,013 54,884 29,233 2,086 91,216 4,310 51,611 28,888 1,061 85,870 (1) The outstanding balances of loans at call included loans for which revenue recognition has been discontinued.

38.4 Fair value

Fair value represents the amount for which an asset could be exchanged or a liability settled between knowledgeable, willing parties in an arm’s length transaction. The Bank and its subsidiaries have estimated the fair value of financial instruments as follows: a) Financial assets The method used for determining the fair value depends upon the characteristics of the financial instruments. The fair values of most financial assets are presented at the amount stated in the balance sheet, including cash, interbank and money market items, receivables from clearing house and loans. These financial assets have their fair value approximate to their respective carrying value since the values of these financial instruments are predominantly subject to market interest rates. Financial instruments with standard terms and conditions which are traded on an active and liquid market, such as investments, have their fair values determined by the quoted market price. b) Financial liabilities The fair values of financial liabilities, including deposits, interbank and money market items, payable to clearing house, securities business payable, liabilities payable on demand, and borrowings, are considered to approximate their respective carrying values for the same reasons as described above. As at 31 December 2009 and 2008, there are no material differences between the book value of financial instruments of the Bank and its subsidiaries and their fair value.



56

38.5 Financial derivatives

The Bank and its subsidiaries engage in financial derivatives activities as required in the normal course of their business to manage risk and to meet their clients’ needs. These financial derivatives include forward foreign currency contracts, cross currency and interest rate swap contracts, and interest rate swap contracts. The Bank and its subsidiaries have a policy to hedge the risk limits by which it requires risk reporting for the various types of risk, as a control over financial derivative activities. The Bank and its subsidiaries manage the credit risk associated with financial derivatives on the basis of the credit limits granted to customers in general. The same credit approval process that is used when granting loans to a customer is adopted for financial derivative customers, so that the Bank and its subsidiaries are able to maintain risk at acceptable levels. As at 31 December 2009 and 2008, the Bank and its subsidiaries have financial derivatives as classified by their maturities as follows: (Unit: Million Baht) Consolidated financial statements 2009 2008 Less than Over Less than Over 1 year 1 year Total 1 year 1 year Total Foreign exchange contracts - Bought 9,086 - 9,086 8,519 - 8,519 - Sold 20,524 - 20,524 36,161 - 36,161 Cross currency and interest rate swap

contracts - Bought 4,937 - 4,937 - 5,169 5,169 - Sold 4,449 3,336 7,785 524 4,322 4,846 Interest rate swap contracts - Paid fixed interest rate 7,070 12,334 19,404 950 9,070 10,020 - Paid floating interest rate - 800 800 1,450 800 2,250 - Received fixed interest rate - 800 800 1,450 800 2,250 - Received floating interest rate 7,070 12,334 19,404 950 9,070 10,020

(Unit: Million Baht) Separate financial statements 2009 2008 Less than Over Less than Over 1 year 1 year Total 1 year 1 year Total Foreign exchange contracts - Bought 9,086 - 9,086 8,519 - 8,519 - Sold 20,524 - 20,524 36,161 - 36,161 Cross currency and interest rate swap

contracts

- Bought 4,937 - 4,937 - 5,169 5,169 - Sold 4,449 3,336 7,785 524 4,322 4,846 Interest rate swap contracts - Paid fixed interest rate 7,070 12,334 19,404 950 9,070 10,020 - Paid floating interest rate - 500 500 1,450 500 1,950 - Received fixed interest rate - 500 500 1,450 500 1,950 - Received floating interest rate 7,070 12,334 19,404 950 9,070 10,020



57

39. Reclassification

The Bank has reclassified certain amounts in the financial statements for the year ended 31 December 2008 to conform to the current year’s classifications in order to comply with the same classification of the group, with no effect on previously reported net income and shareholders’ equity. Reclassifications are as follows: (Unit: Million Baht) Consolidated financial statement Separate financial statement

As reclassified As previously

reported As reclassified As previously

reported Other assets 2,779 2,426 1,775 1,445 Other liabilities 3,404 3,450 2,213 2,271 Non-interest expenses

- Premises and equipment expenses 1,566 1,362 1,256 1,052 - Fees and charges 260 258 55 53 - Other expenses 3,189 3,395 2,722 2,928

40. Subsequent events

On 24 February 2010, the Board of Directors of the Bank passed a resolution to propose the payment of a dividend of Baht 0.56 per share to the ordinary shareholders in respect of the operating results for the year 2009, a total of Baht 1,083 million, to the Annual General Meeting of Shareholders.

Such dividend will be paid and recorded after it is approved by the Annual General Meeting of the Bank’s shareholders.

41. Approval of financial statements

These financial statements were authorised for issue by the Bank’s Board of Directors on 24 February 2010.

40. Subsequent events

41. Approval of financial statements

39. Reclassification



THANACHART HUB CSR

REMUNERATION FOR THE AUDITOR

Every year the Audit Committee evaluates the

qualificationandperformanceoftheauditorandproposes

to TBANK’s Board of Directors for an approval of the

appointment and fee of the auditor, in order to further

obtain an approval in the shareholders meeting. The

proposed candidates shall be the auditors approved by

theBankofThailand“BOT”.Inaccordance,theBOThas

officially issued a letter No. ForKorKor. (02) 181/2009

dated24March2009onthesubjectmatteroftheconsent

granting for the auditor of the accounting year 2009.

Theconsentwasgrantedforthreeauditorsasfollows:

1. Ms.Ratana Jala

CertifiedPublicAccountantNo.3734;and/or

2. Ms.RungnaphaLertsuwankul

CertifiedPublicAccountantNo.3516;and/or

3. Mr.Narong Pantawongs

CertifiedPublicAccountantNo.3315

ofErnst&YoungOfficeLimited,

thecurrentauditorteamofTBANK.

• THE RELATIONSHIP OF THE AUDITORS

ANDTHEBANK

The proposed auditors have no relationship

inanyformwiththeBank.

• THE AUDITORS OF SUBSIDIARIES AND

ASSOCIATEDCOMPANIESINTHANACHARTGROUP

ThanachartBank,asacompanyinthegroup

of Thanachart Capital, thus proposed Ernst & Young

OfficeLimitedtobeanauditorofThanachartGroup.

In 2009, TBANK paid Ernst & Young Office

Limited for the audit services and other services. The

detailsoftheauditors’feeareasfollows:

1. AUDITFEE

1.1 AuditfeeworthTHB7,250,000waspaid

forauditing the financial statementsof thepreviousyear,

signedbyMs.RatanaJala,CertifiedPublicAccountant.

1.2 OtherpaymentworthTHB102,549which

related to the auditing of the financial statements for the

pastyear,wasmadetotheaudit firmtheCertifiedPublic

Accountantauditoraffiliatedwith.

2. NON-AUDITFEE

TBANK made payments for other services

includingspecialaudits, for therequirementsof theBOT,

intheamountofTHB350,000andtherewasnofeetobe

paid in the future for the contracted services not yet

renderedinthepastfiscalyear.

Apart from the fees mentioned in 1 and 2

above, there was no other fee for the past year that

TBANKhad topay to theauditorsof theBank, theaudit

firmtheCertifiedPublicAccountantauditorsaffiliatedwith,

persons or businesses related to Certified Public

AccountantorrelatedtotheauditfirmtheCertifiedPublic

Accountantauditorsaffiliatedwith.

Saving Festival

Thanachart Bank acted as an intermediary to communicate and encourage the public to participate in social contribution and share their social responsibility through activities that were well-targeted to serve the needs of the society and underprivileged communities.



RELATED PARTY TRANSACTIONS

RELATED COMPANIES/RELATIONSHIP WITH TBANK

TYPE OF TRANSACTION/

CONTRACT TERMS INTEREST RATE

TRANSACTION VALUE (OUTSTANDING

BALANCE) (MILLION BAHT)

RELATIONALE OF THE TRANSACTION AND

PRICING POLICY

This was loans provided to member companies of Thanachart Group for their normal day-to-day business operations. TBANK’s Board of Directors was responsible for approving the transactions with the consent of the Credit Committee and the Executive Committee. Those having a conflict of interest in the transactions were not allowed to involve in any part

All related party transactions of Thanachart Bank

Public Company Limited “TBANK” are normal business

transactions in accordance with the Bank’s business plan

and subject to the same price and terms as applied to

general customers. The transactions have been approved

under transparent procedure and in line with relevant

regulations imposed by the authority.

The related party of TBANK refers to a person or

business entity with a control over the Bank or being

controlled directly or indirectly by the Bank or under the

same control as the Bank. Moreover, a related person or

business entity includes the person who has significant

influence on TBANK, Executives, Directors or staff who

has authority in planning and controlling the Bank’s

business operations.

In 2009, TBANK had the related party

transactions with its parent company, subsidiaries and

related companies whereby these transactions can be

summarized as follows:

TRANSACT IONS BETWEEN TBANK AND

SUBSIDIARIES IN THANACHART GROUP

TBANK lends to Thanachart Group Leasing

Co., Ltd., T Leasing Co., Ltd., National Leasing Co., Ltd.,

and Thanachart Legal and Appraisal Co., Ltd.

Subsidiaries Thanachart Group Leasing Company Limited Shareholding - TBANK held 100 percent shares Related Directors Mr. Seth Cechetto Mr. Anuchart Deeprasert Mr. Pompetch Rasanon Mr. Songwuth Chaowalit Mr. Somkuan Chaicharoen Relationship - Executives of TBANK - Control or influence over Thanachart Group Leasing Co., Ltd. - No shares holding in Thanachart

Group Leasing Co., Ltd.

Promissory notes at call

2008

THB 3,645 million

2009

THB 2,168 million

In l ine wi th TBANK’s cost of fund plus a fixed percentage per annum



of the consideration and approval process of the transactions. Applicable interest rate and terms were the same as those applied to general customers with prices comparable to general customers with the same level of risk. The approval of credit was within the limit imposed by the Bank of Thailand (BOT).

T Leasing Company Limited Shareholding - TBANK held 99.99 percent shares Related Directors Mr. Nophadon Ruengchinda Mr. Anuchart Deeprasert Mr. Thanes Ratanakorn Mr. Wichak Praditavanij Mr. Chatchai Kaivalkul Mr. Kriangkrai Phurivitvattana Mr. Sanong Khumnuch Mr. Seth Cechetto Relationship - Executives of TBANK - Control or influence over T Leasing Co., Ltd. - No shares holding in T Leasing Co., Ltd. National Leasing Company Limited Shareholding - TBANK held 100 percent shares Related Directors Mr. Thanes Ratanakorn Mr. Naris Saifuk Mr. Anuchart Deeprasert Relationship - Executives of TBANK - Control or influence over National Leasing Co., Ltd. - No shares holding in National Leasing Co., Ltd. Thanachart Legal and Appraisal Company Limited Shareholding - TBANK held 100 percent shares Related Directors Mr. Sanong Khumnuch Relationship - Executives of TBANK - Control or influence over Thanachart Legal and Appraisal Co., Ltd. - No shares holding in Thanachart Legal and Appraisal Co., Ltd.

2008

THB 824 million

2009

THB 634 million

2008

- None -

2009

THB 77 million

2008 - None - 2009

THB 10 million


Promissory notes

at call



RELATED COMPANIES/RELATIONSHIP WITH TBANK

TYPE OF TRANSACTION/

CONTRACT TERMS INTEREST RATE

TRANSACTION VALUE

(OUTSTANDING BALANCE)

(MILLION BAHT)

RELATIONALE OF THE TRANSACTION AND

PRICING POLICY





TRANSACTION BETWEEN TBANK AND ITS SUBSIDIARIES AND PARENT COMPANY, SUBSIDIARIES,

ASSOCIATE COMPANIES, AND RELATED PARTIES

THANACHART CAPITAL PUBLIC COMPANY LIMITED “TCAP”

1. Office space rental agreement between Thanachart Bank Plc. (TBANK) (tenant) and parent company, that is,

Thanachart Capital Plc. (TCAP) (landlord)

1.1 Details of contracting party

COMPANY TYPE OF RELATIONSHIP

1. Thanachart Capital Plc. (TCAP) Parent company holds 1. Mr. Banterng Tantivit

50.92 percent shares 2. Mr. Suphadej Poonpipat

in TBANK* 3. Ms. Suvarnapha Suvarnaprathip

4. Mr. Somjate Moosirilert

DIRECTORS WITH STAKEHOLDING

1.2 Details of office space rental agreement

and key terms in the contract

Office space rental agreement between

TBANK (tenant) and TCAP (landlord) to be used as

headquarters, branches, currency exchange booths,

parking space, and space for advertisement board.

1.3 As of 2009, the transaction is valued at

THB 49.58 million.

1.4 Necessity and rationale of the transaction

The rental fee has been calculated by

1. MBK Plc. (MBK) Member companies in Thanachart 1. Mr. Banterng Tantivit

Group all together hold 19.90 percent 2. Mr. Suphadej Poonpipat

shares in MBK

2. Glas Haus Building Co., Ltd. (GHB) An indirect subsidiary of MBK in which MBK

holds 99.99 percent shares in GHB via

a subsidiary

3. Siam Piwat Co., Ltd. (SPW) A subsidiary of MBK in which MBK

holds 30.72 percent shares in SPW

1.2 Details of office space rental agreement

and key terms in the contract

Office space rental agreement between

TBANK (tenant) and MBK and member companies

(landlord) to be used as headquarters, branches,

currency exchange booths, and ATM location.

1.3 The transactions in 2008 and 2009 were

THB 35.77 million and THB14.47 million respectively.

1.4 Necessity and rationale of transaction

The rental fee has been calculated by

using market price which is comparable to the fee of the

properties located in the area nearby. Therefore, the

transaction was considered appropriate.

Note: * On 3 February 2009, TCAP sold TBANK’s shares to Scotiabank. As a result, at present, TCAP holds 50.92 percent shares in TBANK.

using market price that is comparable to the fee of

properties located in the area nearby. Therefore, the

transaction was considered appropriate.

MBK PUBLIC COMPANY LIMITED

1. Office space rental agreement between TBANK

(tenant) and companies in the MBK Group (Property-Owner),

including MBK Plc. (MBK), Glas Haus Building Co., Ltd.

(GHB), and Siam Piwat Co., Ltd. (SPW).

1.1 Details of contracting parties

COMPANY TYPE OF RELATIONSHIP DIRECTORS WITH STAKEHOLDING



2. Credit Line between TBANK (Lender) and

member companies in MBK Group, including MBK

Plc.(MBK), MBK Resort Plc. (MBK-R), Sapsin Thani

Co., Ltd. (SSTN), MBK Hotel and Resort Co., Ltd. (MBK-HR),

Plan Estate Co., Ltd. (PST), Glas Haus Building Co., Ltd.

(GHB), Patum Rice Mi l l and Granary Plc. (PRG),

Seree Center Management Co., Ltd. (SCM), Royal Orchid

Hotel (Thailand) Plc. (ROH), Lan Bangna Co., Ltd.

(LBN), and Apple Auto Action (Thailand) Co., Ltd. (AAA)

(Borrower).


1. MBK Plc. (MBK)

2. MBK Resort Plc. (MBK-R)

3. Sapsin Thani Co., Ltd. (SSTN)

4. MBK Hotel and Resort Co., Ltd.

(MBK-HR)

5. Plan Estate Co., Ltd. (PST)

6. Glas Haus Building Co., Ltd. (GHB)

7. Patum Rice Mill and Granary Plc.

(PRG)

8. Seree Center Management Co., Ltd.

(SCM)*

9. Royal Orchid Hotel (Thailand) Plc.

(ROH)

10. Lan Bangna Co., Ltd. (LBN)

11. Apple Auto Action (Thailand) Co., Ltd.

(AAA)

Member companies in Thanachart Group all together hold 19.90 percent shares in MBK

An indirect subsidiary of MBK in which MBK

holds 69.88 percent shares in MBK-R via

a subsidiary

A subsidiary of MBK in which MBK holds

100 percent shares in SSTN


100 percent shares in MBK-HR

An indirect subsidiary of MBK with MBK

holding 69.88 percent shares in PST via

a subsidiary


holds 99.99 percent shares in GHB via

a subsidiary


holds 74.52 percent shares in PRG via

a subsidiary

A subsidiary of MBK in which MBK directly

and indirectly holds 65.36 percent shares in

SCM.


29.77 percent shares in ROH


holds 69.88 percent shares in LBN via

a subsidiary

A joint venture between MBK and Apple

Auto Auction Group with MBK holding 49.99

percent shares in AAA.

Note: * SCM has registered to change name to Paradise Park Co., Ltd. on 1 October 2009.

1. Mr. Banterng Tantivit

2. Mr. Suphadej Poonpipat




2.2 Type and value of transaction In 2008, TBANK provided credit and guarantee to MBK Group and its member companies, including MBK Plc. (MBK), MBK Resort Plc. (MBK-R), Sapsin Thani Co., Ltd. (SSTN), MBK Hotel and Resort Co., Ltd. (MBK-HR), Plan Estate Co., Ltd. (PST), Glas Haus Building Co., Ltd. (GHB), Patum Rice Mill and Granary Plc. (PRG), Royal Orchid Hotel (Thailand) Plc. (ROH), Lan Bangna Co., Ltd. (LBN). The loan outstanding was THB 136.38 million and the guarantee liability was valued at THB 53.94 million. In 2009, TBANK provided credit and guarantee to MBK Group and its member companies, including, MBK Plc. (MBK), Glas Haus Building Co., Ltd. (GHB), Sapsin Thani Co., Ltd. (SSTN), Patum Rice Mill and Granary Plc. (PRG), Plan Estate Co., Ltd. (PST), Royal Orchid Hotel (Thailand) Plc. (ROH), MBK Resort Plc. (MBK-R), MBK Hotel and Resort Co., Ltd. (MBK-HR), Lan Bangna Co., Ltd. (LBN), Apple Auto Action (Thailand) Co., Ltd. (AAA), and Seree Center Management Co., Ltd. (SCM), The loan outstanding was THB 111.49 million, the guarantee liability was THB 51.50 million, and FX line was valued at THB 0.18 million.

2.3 Necessity and rationale of transaction Loans and guarantees from TBANK to MBK and its member companies were transactions relating to normal business operations of TBANK. Terms and conditions as well as fees and interest rates were in line with those applicable to general customers. Such transactions were therefore, justified. 3. Insurance contract between Thanachart Insurance Co., Ltd. (TNI) (insurer) to MBK Plc. (MBK) and its member companies, including MBK Entertainment Co., Ltd. (MBK-E), MBK Resort Plc. (MBK-R), Sapsin Thani Co., Ltd. (SSTN), MBK Hotel and Resort Co., Ltd. (MBK-HR), Prommin Co., Ltd. (PPM), Apple Auto Action (Thailand) Co., Ltd. (AAA), Glas Haus Building Co., Ltd. (GHB), Plan Estate Co., Ltd. (PST), Lan Bangna Co., Ltd. (LBN), Plan Properties Co., Ltd. (PPC), MBK Leisure Co., Ltd. (MBK-LS), Absolute Travel Co., Ltd. (ALT), Crystal Lake Properties Co., Ltd. (CLP), Plan Appraisal Co., Ltd. (PAS), and Seree Center Management Co., Ltd. (SCM) (insured).



1. Thanachart Insurance Co., Ltd. (TNI) 2. MBK Plc. (MBK) 3. MBK Entertainment Co., Ltd. (MBK-E) 4. MBK Resort Plc. (MBK-R) 5. Sapsin Thani Co., Ltd. (SSTN) 6. MBK Hotel and Resort Co., Ltd. (MBK-HR) 7. Prommin Co., Ltd. (PPM) 8. Apple Auto Auction (Thailand) Co., Ltd. (AAA)

A subsidiary of TBANK with the Bank holding 100 percent shares in TNI Member companies in Thanachart Group all together hold 19.90 percent shares in MBK An indirect subsidiary of MBK with MBK holding 81.23 percent shares in MBK-E via a subsidiary An indirect subsidiary of MBK with MBK holding 69.88 percent shares in MBK-R via a subsidiary A subsidiary of MBK with MBK holding 100 percent shares in SSTN A subsidiary of MBK with MBK holding 100 percent shares in MBK-HR An indirect subsidiary of MBK with MBK holding 99.98 percent shares in PPM via a subsidiary A joint venture between MBK and Apple Auto Auction Group with MBK holding 49.99 percent shares in AAA

1. Mr. Banterng Tantivit 2. Mr. Suphadej Poonpipat



9. Glas Haus Building Co., Ltd. (GHB) 10. Plan Estate Co., Ltd. (PST) 11. Lan Bangna Co., Ltd. (LBN) 12. Plan Properties Co., Ltd. (PPC) 13. MBK Leisure Co., Ltd. (MBK-LS) 14. Absolute Travel Co., Ltd. (ALT) 15. Crystal Lake Properties Co., Ltd. (CLP) 16. Plan Appraisal Co., Ltd. (PAS) 17. Seree Center Management Co., Ltd. (SCM)*

An indirect subsidiary of MBK with MBK holding 99.99 percent shares in GHB via a subsidiary An indirect subsidiary of MBK with MBK holding 69.88 percent shares in PST via a subsidiary An indirect subsidiary of MBK with MBK holding 69.88 percent shares in LBN via a subsidiary A subsidiary of MBK with MBK holding 99.99 percent shares in PPC via a subsidiary An indirect associate company of MBK with MBK holding 49 percent shares in MBK-LS via a subsidiary An indirect subsidiary of MBK with MBK holding 99.99 percent shares in ALT via a subsidiary An indirect subsidiary of MBK with MBK holding 69.88 percent shares in CLP via a subsidiary An indirect subsidiary of MBK with MBK holding 69.88 percent shares in PAS via a subsidiary A subsidiary of MBK with MBK directly and indirectly holding 65.36 percent shares in SCM


3.2 Type and value of transaction These transactions related to insurance policies business issued by Thanachart Insurance Co., Ltd. for MBK Plc. and its member companies for physical assets, vehicles, terrorism and liabilities of directors and executives. The contracting parties included MBK Plc. and its aforementioned member companies. Total insurance premium for 2008 and 2009 were THB 15.30 million and THB 22.24 million, respectively. 3.3 Necessity and rationale of transaction These transactions related to normal business operations of TNI. Terms and conditions as well as premium were in line with those applicable to general customers. Such transactions were, therefore, justified.

4. Group health insurance, life insurance, accident insurance, handicap insurance, heath insurance by Thanachart Life Assurance Company Limited (TLIFE) (insurer) to employees of MBK Plc. and its member companies including Thep Thai Business Co., Ltd. (TTB), MBK Entertainment Co., Ltd. (MBK-E), MBK Leisure Co., Ltd. (MBK-LS), Absolute Travel Co., Ltd. (ALT), MBK Center Co., Ltd. (MBK-C), and Apple Auto Auction (Thailand) Co., Ltd. (AAA) (insured). 4.1 Details of contracting parties

Note: * SCM has registered to change name to Paradise Park Co., Ltd. on 1 October 2009.



4.2 Value of transaction

The value of transactions for 2008 and

2009 were THB 2.54 million and THB 2.55 million,

respectively.


Insurance policies issued by TLIFE for

life, health, and accident to employees of the MBK group

were justified based on the fact that the premiums

charged for policies on physical assets, health, accident

and life for these employees were in line with those

applicable to general customers of TLIFE.

5. Management fee paid by TBANK to Plan

Estate Co., Ltd. (PST) for management and sale of

non-performing assets.


5.2 Value of transaction

In 2008 and 2009, total value of

transactions amounted to THB 4.14 million and THB 2.09

million.


These transactions were justified given

that TBANK contracted PST to manage and sell their

non-performing assets whereby fees were calculated


1. MBK Plc. (MBK)


Member companies in Thanachart Group all

together held 19.90 percent shares in MBK



a subsidiary




1. Thanachart Life Assurance Co., Ltd. (TLIFE) 2. MBK Plc. (MBK) 3. MBK Entertainment Co., Ltd. (MBK-E) 4. Thep Thai Business Co., Ltd. (TTB) 5. Absolute Travel Co., Ltd. (ALT) 6. MBK Leisure Co., Ltd. (MBK-LS) 7. MBK Center Co., Ltd. (MBK-C) 8. Apple Auto Auction (Thailand) Co., Ltd. (AAA)

A subsidiary of TBANK and TBANK holding 100 percent shares in TLIFE Member companies in Thanachart Group all together held 19.90 percent shares in MBK An indirect subsidiary of MBK with MBK holding 81.23 percent shares in MBK-E via a subsidiary A subsidiary of MBK with MBK holding 99.93 percent shares in TTB An indirect subsidiary of MBK with MBK holding 99.99 percent shares in ALT via a subsidiary An indirect associate company of MBK with MBK holding 49 percent shares in MBK-LS via a subsidiary A subsidiary of MBK with MBK holding 99.93 percent shares in MBK-C A joint venture between MBK and Apple Auto Auction Group with MBK holding 49.99 percent shares in AAA

1. Mr. Banterng Tantivit 2. Mr. Suphadej Poonpipat




1. MBK Plc. (MBK)


Member companies in Thanachart Group all

together held 19.90 percent shares in MBK



a subsidiary



6.2 Value of transaction There were no transactions in 2008, while the value of transactions was THB 10.50 million in 2009. 6.3 Necessity and rationale of transaction These transactions related to awards for sale of non-performing assets, calculated based on publicly announced rates and conditions in finding buyers for the Bank’s non-performing assets. Such rates were computed as percentage of sale prices.

THANACHART INSURANCE COMPANY LIMITED (TNI) 1. Vehicle insurance of Thanachart Capital Plc. (TCAP), Thanachart Bank Plc. (TBANK), Thanachart Legal and Appraisal Co., Ltd. (TLA), Thanachart Securities Plc. (TNS), Thanachart Life Assurance Co., Ltd. (TLIFE), Thanachart Insurance Co., Ltd. (TNI), NFS Asset Management Co., Ltd. (NFS AMC) and Max Asset Management Co., Ltd. (MAX AMC) with Thanachart Insurance Co., Ltd. (TNI). 1.1 Details of contracting parties


1. Thanachart Insurance Co., Ltd. (TNI)

2. Thanachart Bank Plc. (TBANK)

3. Thanachart Legal and Appraisal

Co., Ltd. (TLA)

4. Thanachart Securities Plc. (TNS)

5. Thanachart Life Assurance Co., Ltd.

(TLIFE)

6. NFS Asset Management Co., Ltd.

(NFS AMC)

7. Max Asset Management Co., Ltd.

(MAX AMC)

An indirect subsidiary of TCAP with TCAP

holding 50.92 percent shares in TBANK and

TBANK holding 100 percent shares in TNI

A subsidiary of TCAP (TCAP held 50.92

percent shares in TBANK)*



TBANK holding 100 percent shares in TLA



TBANK holding 100 percent shares in TNS



TBANK holding 100 percent shares in TLIFE

A subsidiary of TCAP with TCAP holding

100 percent shares in NFS AMC


83.44 percent shares in MAX AMC




based on cost of fund plus profit, which were considered

normal rates applicable to general customers in

management of similar projects.

6. Other expenses that TBANK paid to PST to

award sale of non-performing assets




2.2 Type and value of transaction

These transactions related to directors

and officers liability insurance policies issued by TNI for all

directors and officers of member companies in Thanachart

Group. In 2008 and 2009, the premiums charged for these

policies were THB 5.21 million and THB 4.70 million

respectively.


Member companies of Thanachart

Group insured their directors and officers with TNI to

protect those directors and officers who performed their

duties to the level of capacity and responsibility required

for their respective roles, from possible liabilities. Such

practice was common in the industry. Premiums paid to

TNI were normal rates applicable to general customers.

THANACHART LIFE ASSURANCE COMPANY LIMITED

(TLIFE)

Group health insurance, life insurance, and group

accident insurance by Thanachart Life Assurance Co., Ltd.

(TLIFE) (insurer) to employees of Thanachart Capital Plc.

(TCAP), NFS Asset Management Co., Ltd. (NFS AMC) and

Max Asset Management Co., Ltd. (MAX AMC) (insured).

1. Details of contracting parties


1. Thanachart Insurance Co., Ltd.

(TNI)


A subsidiary of TBANK with TBANK holding

100 percent shares in TNI

A subsidiary of TCAP (TCAP held 50.92






1. Thanachart Life Assurance Co., Ltd.

(TLIFE)

2. Thanachart Insurance Co., Ltd. (TNI)

3. Thanachart Capital Plc. (TCAP)


holding 50.92 percent shares in TBANK

and TBANK holds 100 percent shares in

TLIFE



and TBANK holds 100 percent shares in TNI

Parent company holds 50.92 percent

shares in TBANK*



3. Ms. Suvarnapha Suvarnaprathip

1.2 Type and value of transaction

These transactions related to vehicle

insurance policies whereby in 2008 and 2009 their

premiums amounted to THB 0.29 million and THB 3.18

million, respectively.


Member companies of Thanachart

Group insured their vehicles with TNI to alleviate impact

arising from risk of accidents to Thanachart Group’s

vehicles. Insurance premiums paid by member companies

of Thanachart Group to TNI were normal rates applicable

to general customers.

2. Directors and Officers Liability Insurance of

member companies in Thanachart Group with (TNI).




2. Type and value of transaction

These transactions are related to group

health insurance, life insurance and group accident

insurance for employees. In 2008 and 2009, their

premiums amounted to THB 0.17 million and THB 8.58

million, respectively.

3. Necessity and rationale of transaction

TCAP and its subsidiaries purchased group

health insurance and life insurance from TLIFE and group

accident insurance from TNI under similar terms and

conditions as other insurers. Thus, these transactions were

considered appropriate market transactions. The rationale

for such transactions was to offer health, life and accident

insurance coverage for employees of TCAP and its

subsidiaries. This type of benefit for the employees was

considered beneficial for all employees.


Loans 48 67 Deposits 554 496


These transactions are related to financial

services offered by TBANK under its normal business

operations and were conducted under the same terms and

conditions as well as interest rates applicable to general

customers.


EXECUTIVES OF MEMBER COMPANIES IN THANACHART GROUP


1. Related transactions between TBANK and the executives in Thanachart Group

4. Thanachart Legal and Appraisal

Co., Ltd. (TLA)

5. Thanachart Securities Plc. (TNS)

6. NFS Asset Management Co., Ltd.

(NFS AMC)

7. Max Asset Management Co., Ltd.

(MAX AMC)



and TBANK holds 100 percent shares in TLA



and TBANK holds 100 percent shares in TNS


100 percent shares in NFS AMC


83.44 percent shares in MAX AMC




2. Type and value of transaction

Loans and guarantees between TBANK and

Advance Info Service Plc. (AIS) were considered normal

business operations of TBANK.

• In 2008, TBANK extended loans and

guarantees to AIS with a total outstanding balance of

THB 43 million for loans and none for guarantees.

• In 2009, TBANK extended loans and

guarantees to AIS with total outstanding balances of

THB 59.24 million and THB 36.29 million for loans and

guarantees, respectively.


Loans and guarantees extended by TBANK

to AIS were considered normal business operations of the

Bank under the same terms and conditions, fees and

interest rates applicable to general customers. Such

transactions were, therefore, justified.

SUPPORTIVE SERVICES AMONG MEMBER

COMPANIES IN THANACHART GROUP

Thanachart Group has put in place a policy on

integrating supportive units into a single company for the

purpose of Economies of Scale and Economies of Scope

in providing supportive services to member companies in

the group. Under such policy, the use of available

resources will be at maximum benefit. The charging fee for

obtaining such service will be calculated mainly from cost

of business operations (Cost Plus). Services provided are

as follows:

THANACHART BANK PLC.

The Bank provides supportive service in

operation, business control, debt collection and payment

agent, accounting, e-commerce business, system and

regulation development, internal audit, compliance,

human resource, IT system, hire purchase credit review,

building and premises management, procurement and

asset management.

THANACHART MANAGEMENT AND SERVICE CO., LTD.

This company provides services for service-

support employees

THANACHART LEGAL AND APPRAISAL CO., LTD.

This company provides supportive services in

legal counseling, legal contracts, lawsuit prosecution and

execution, and collateral appraisal.

THANACHART TRAINING AND DEVELOPMENT CO., LTD.

This company provides training services to

personnel of member companies in Thanachart Group.

TRANSACTION OF THE RELATED COMPANIES AND MEMBER COMPANIES OF THANACHART GROUP

ADVANCE INFO SERVICE PLC. (AIS)

1. Details of contracting parties


1. Advance Info Service Plc. (AIS)


Vice Chairman of the Board of Directors

and Chairman of the Executive Committee

of TBANK was also a Non-signatory

Director of AIS

A subsidiary of TCAP (TCAP holding 50.92


Mr. Suphadej Poonpipat




CREDIT LENDING AND CONTINGENT LIABILITIES

AT MANAGER LEVEL OR ABOVE OF TBANK

AND MEMBER COMPANIES IN THANACHART

GROUP INCLUDING OTHER TRANSACTIONS AS

AFOREMENTIONED

The transactions are resulted from normal

business operations.

MEASURES OR PROCEDURES FOR APPROVING

RELATED PARTY TRANSACTION

TBANK has put in place a policy and regulations

aimed at protecting conflicts of interest as well as related

party transactions and related transactions in line with the

requirements imposed by the Stock Exchange of Thailand

(SET). It has also announced regulations, to which both its

staff and executives are required to adhere to in relation to

the Bank’s transactions with individuals who may have

a conflict of interest in line with the criteria of the Securities

and Exchange Commission (SEC).

In considering the execution of related party

transactions, the Bank uses the same procedure as

applied to general customers or trading partners and

appropriately follows the normal process that has been

established. The service of the related party will be used

only as necessary for the purpose of supporting the Bank’s

business operations. In determining the price of the

related party transactions, to prevent a conflict of interest,

the Bank uses a fair value that is appropriate and in

line with the authority’s requirements, taking into

consideration mainly the maximum benefit to be received

by the Bank and its shareholders.

In approving related party transactions, directors

or employees having a conflict of interest in the transaction

are prohibited from participating in decision making.

The transactions are also subjected to unanimous

approval by the Bank’s Board of Directors. The Bank’s

directors or senior executives having any conflict of

interest are prohibited from participating in the approval

process. The approval of the transaction has to be within

the authority and the limit determined by the Bank and

also in compliance with the requirements of the related

authorities.

In conducting their duties relating to the approval

of loans or investment, payments, renting or renting out of

movable or immovable property, securities trading,

related party transactions, transactions relating to

acquisition or disposal of assets, the Bank is required to

act prudently, aiming to prevent conflicts of interest and to

strictly adhere to rules and regulations imposed by the

related authorities. Disclosure of information relating to

such transactions shall be in line with the requirements

imposed by the authorities, accounting standards as well

as the Bank’s regulations.

POLICY AND TRENDS ON RELATED PARTY

TRANSACTOIN

Related party transactions between TBANK and

member companies in Thanachart Group or related

persons will be normal business transactions, including

those resulting from implementation of the Bank’s financial

business restructuring plan in compliance with the

Financial Sector Master Plan Phase I’s One Presence

policy and Consolidated Supervision regulation. Related

party transactions also cover supporting services given

between member companies of Thanachart Group in

line with the Group’s policy. TBANK has no policy

encouraging parties who have a conflict of interest to

execute related party transactions.

The Kidney Foundation of Thailand

Donated funds to alleviate burdens and difficulties of the patients with kidney disease countrywide, together with regular visits to support the patients as well as the Foundation.



GENERAL INFORMATION

INVESTMENT OF THANACHART BANK PUBLIC COMPANY LIMITED IN OTHER COMPANIES

The following is a list of companies in which Thanachart Bank made investments during 2009, in the form of shareholding of 10 percent or more of the total paid-up capital.

COMPANY/LOCATION TYPE OF BUSINESS

TYPE OF SHARES

REGISTERED CAPITAL (BAHT)

PAID-UP CAPITAL (BAHT)

TOTAL NUMBER OF

SHARES HELD

PROPORTION OF TBANK’S

SHAREHOLDING

(%)1

TOTAL NUMBER OF PAID-UP

SHARES

Subsidiaries ThanachartSecurities Securities Ordinary 1,700,000,000 1,500,000,000 1,500,000,000 1,499,999,930 100.00 PublicCompanyLimited Share 444 MBK Tower, 14th, 18th, and 19th Floor, Phayathai Road, Wangmai, Pathumwan, Bangkok 10330 Tel. +66 (0) 2217 8888, 2217 9595 Fax +66 (0) 2217 9642

ThanachartInsuranceCompanyLimited Non-Life Ordinary 740,000,000 740,000,000 74,000,000 73,999,434 100.00 1 Glas Haus Building, 10th Floor, Insurance Share Soi Sukhumvit 25, North Klongtoey, Wattana, Bangkok 10110 Tel. +66 (0) 2661 7999 Fax +66 (0) 2665 7304

ThanachartLifeAssurance Life Ordinary 500,000,000 500,000,000 50,000,000 49,999,400 100.00 CompanyLimited Assurance Share 231 Thanachart Life Assurance Building, Rachadamri Road, Lumpini, Pathumwan, Bangkok 10330 Tel. +66 (0) 2207 4200 Fax +66 (0) 2253 8484

ThanachartFundManagement Mutual Fund Ordinary 100,000,000 100,000,000 10,000,000 7,499,993 75.00 CompanyLimited Management Share 898 Ploenchit Tower, 15th and 18th Floor Ploenchit Road, Lumpini, Pathumwan, Bangkok 10330 Tel. +66 (0) 2126 8200, 2126 8300 Fax +66 (0) 2126 8398

ThanachartBrokerCompanyLimited Insurance Ordinary 100,000,000 100,000,000 10,000,000 9,999,000 99.99 1 Glas Haus Building, 4th Floor, Broker Share Soi Sukhumvit 25, North Klongtoey, Wattana, Bangkok 10110 Tel. +66 (0) 2685 0200, 2685 0300 Fax +66 (0) 2685 0322, 2685 0333



COMPANY/LOCATION TYPE OF BUSINESS

TYPE OF SHARES

REGISTERED CAPITAL (BAHT)

PAID-UP CAPITAL (BAHT)

TOTAL NUMBER OF

SHARES HELD

PROPORTION OF TBANK’S

SHAREHOLDING

(%)1

TOTAL NUMBER OF PAID-UP

SHARES

ThanachartGroupLeasing Leasing Ordinary 360,000,000 360,000,000 36,000,000 35,999,994 100.00 CompanyLimited Share 444 MBK Tower, 11th Floor, Phayathai Road, Wangmai, Pathumwan, Bangkok 10330 Tel. +66 (0) 2217 8000, 2217 8333 Fax +66 (0) 2611 9488

ThanachartManagementandService Services Ordinary 6,000,000 6,000,000 600,000 599,993 100.00 CompanyLimited Share 128/23 , 3rd Floor, Phayathai Plaza Office, Phayathai Road, Thung Phayathai, Ratchathewi, Bangkok 10400 Tel. +66 (0) 2612 1500 Fax +66 (0) 2612 1400

ThanachartLegalandappraisal Legal Advisory Ordinary 10,000,000 10,000,000 1,000,000 999,993 100.00 CompanyLimited Services and Share 128/20-21 3rd Floor, Appraisal Phayathai Plaza Office, Phayathai Road, Thung Phayathai, Ratchathewi, Bangkok 10400 Tel. +66 (0) 2216 6677 Fax +66 (0) 2216 9022

ThanachartTrainingandDevelopment Training Ordinary 5,000,000 5,000,000 500,000 499,993 100.00 CompanyLimited Share 207/6 Thanachart Building, 5th Floor, Ratchadaphisek Road, Dindaeng, Bangkok10400 Tel. +66 (0) 2290 3410 Fax +66 (0) 2290 3419

TLeasingCompanyLimited Leasing Ordinary 180,000,000 180,000,000 18,000,000 17,998,200 99.99 2 Thanachart Buidling, Rama 7, Share 5th Floor, Soi Charansanitwong 98, Bangorr, Bang phlat, Bangkok 10700 Tel. +66 (0) 2832 2555 Fax +66 (0) 2832 2556

NationalLeasingCompanyLimited2 Leasing Ordinary 60,000,000 60,000,000 600,000 599,994 100.00 444 MBK Tower, 12th Floor, Share Phayathai Road, Wangmai, Phayathai, Pathumwan, Bangkok 10330 Tel. +66 (0) 2217 8000

AssociatedCompany SiamMediaandCommunication Communication Ordinary 700,000,000 700,000,000 7,000,000 1,633,800 23.34 CompanyLimited3 Share 18 SCB Park Plaza Tower 2 West, 17th-22nd Floor, Ratchadaphisek Road, Ladyao, Chatuchak, Bangkok 10900

Notes: 1 Shareholding percentage shown above included the shareholding held by related companies 2 Thanachart Bank indirectly held 100 percent through Thanachart Group Leasing Company Limited which was in line with the definition of subsidiaries announced by the Stock Exchange of Thailand 3 Bankrup



THANACHART BANK’S REFERENCES

LocationofHeadoffice : 900 Tonson Tower, Ploenchit Road, Lumpini, Pathumwan, Bangkok 10330, Thailand RegistrationNo. : 0107536001401 (Former No. BOR.MOR.JOR. 214) RegisteredCapital : THB 59,346,192,720 Paid-upCapital : THB 19,346,192,720 Website : www.thanachartbank.co.th E-mail : [email protected] Telephone : +66 (0) 2655 9000 Fax : +66 (0) 2655 9001

NAME, LOCATION, TELEPHONE AND FAX OF OTHER REFERENCES

Securities : Ordinaryshares

SecuritiesRepresentative/Registrar : ThailandSecuritiesDepositoryCompanyLimited 62 The Stock Exchange of Thailand Building, Ratchadaphisek Road, Klongtoey, Bangkok 10110, Thailand Tel. +66 (0) 2229 2800 Fax +66 (0) 2359 1259 Call Center +66 (0) 2229 2888 Website: www.tsd.co.th

Securities : UnsecuredsubordinateddebenturesofThanachartBankPublicCompanyLimited No.1/2006

DebentureRepresentative/Registrar : ThanachartBankPublicCompanyLimited“TBANK” 900 Tonson Tower, Ploenchit Road, Lumpini, Pathumwan, Bangkok 10330, Thailand Tel. +66 (0) 2655 9000 Fax +66 (0) 2655 9001 Website: www.thanachartbank.co.th

Securities : DebenturesTBANK155A,TBANK194A,TBANK197A,andTBANK247A

DebentureRepresentative/Registrar : TMBPublicCompanyLimited 393 Silom Branch, Soi. 7, Silom Road, Bangrak, Bangkok 10500, Thailand Tel. +66 (0) 2230 6301, +66 (0) 2230 5883 Fax +66 (0) 2230 6200 Website: www.tmbbank.com

Auditor : Ernst&YoungOfficeLimited 193/136-137 Lake Rajada Office Complex, 33rd Floor, Rachadaphisek Road, Klongtoey, Bangkok 10110, Thailand Tel. +66 (0) 2264 0777 Fax +66 (0) 2264 0789-90

NameofAuditor : MissRatanaJala,CertifiedPublicAccountantNo.3734

LegalAdvisor : ThanachartLegalandAppraisalCompanyLimited 128/20-21 Payathai Plaza Office, 3rd Floor, Phayathai Road, Thung Phayathai, Ratchathewi, Bangkok 10400, Thailand Tel. +66 (0) 2216 6677 Fax +66 (0) 2216 6558

FinancialAdvisor : None

AdvisororManagementunder : None ManagementContract



LIST OF SHAREHOLDERS NO. OF SHARES PERCENTAGE OF SHAREHOLDING

1. Thanachart Capital Public Company Limited 985,170,229 50.923

2. The Bank of Nova Scotia 947,916,657 48.998

3. Ms. Kittima Tolieng 157,525 0.008

4. Ms. Piengjai Hanphanit 96,665 0.005

5. Thai Finance and Securities Public Company Limited* 90,000 0.005

6. Mr. Wanchai Chirathivat 84,809 0.004

7. Mr. Thanawat Chareonthassanont 70,000 0.004

8. Mr. Thung-ngern Pum-ngern 45,376 0.002

9. Mrs. Soranee Deephanphong 43,285 0.002

10. Mr. Wayne Huang 40,000 0.002

11. Other Shareholders 904,726 0.047

TotalPaid-upCapital 1,934,619,272 100.00

ThaiShareholders 986,659,315 51.00

ForeignShareholders 947,959,957 49.00

Note: * Thai Finance and Securities Public Company Limited’s assets were put on restraint by receivership of Legal Execution Department. Source: Report of the Bank’s Major shareholders as at 30 December 2009 prepared by Thailand Securities Depository Company Limited.

STRUCTURE OF MAJOR SHAREHOLDERS

NO.

Earth Hour 2009 “Let the world rest; reduce unnecessary electricity usage”Thanachart Bank in corporation with World Wildlife Fund (WWF), authorities and various businesses in Bangkok joined the campaign in turning off light switch for one hour in order to promote energy saving and alleviate the global warming condition.



DIVIDEND POLICY

DIVIDEND POLICY OF THANACHART BANK

Thanachart Bank has dividend payment policy by

paying dividend when the Bank has profit. In order to

make a dividend payment, the Bank has to take the capital

adequacy for supporting the Bank’s businesses and legal

reserve into account. The Bank’s Board of Directors may

pay an interim dividend to shareholders occasionally when

it considers that the Bank has adequate profit to do so.

The Board of Directors is required to report the interim

dividend payment to the shareholders at their next

meeting.

At the Annual General Meeting of Shareholders

for the year 2009 held on 28 April 2009, the shareholders

adopted a resolution approving the dividend payment

for the year 2008 performance to the Bank shareholders

at a rate of THB 0.56 per share. The dividend was made

on 12 May 2009, and paid to 1,734,619,292 shares in the

total amount of THB 971,386,803.52.

DIVIDEND POLICY OF THE SUBSIDIARY COMPANIES

The subsidiary companies of TBANK have

dividend payment policy by paying dividend when they

have profits. In order to make payments, they have to take

the excessive cash from business operation and legal

reserve into consideration. Their Boards of Directors may

pay interim dividend to shareholders occasionally when

they consider that they have adequate profits to make the

payment. The Boards of Directors are required to report

the interim dividend payment to the shareholders at their

next meeting.

GROUP OF MAJOR SHAREHOLDERS WHICH HAS A

SIGNIFICANT IMPACT ON THE FORMULATION OF

MANAGEMENT POLICIES

TBANK has 2 major shareholders that, by

behavior, have significant influence on the establishment

of its management policies. The 2 major shareholders are

Thanachart Capital Public Company Limited “TCAP”,

which holds 50.92 percent of the total paid-up shares, and

the Bank of Nova Scotia “Scotiabank”, which holds 48.99

percent of the total paid-up shares.

Thanachart Capital Public Company Limited does

not have any major shareholder that has significant

influence on the establishment of its management policies

or its operation.



COMPANIES IN THANACHART GROUP

THANACHART CAPITAL PUBLIC COMPANY

LIMITED

444 MBK Tower, 10th-11th and 15th-20th Floor,

Phayathai Road, Wangmai, Pathumwan,

Bangkok 10330, THAILAND

Tel. +66 (0) 2217 8444, 2217 8000, 2611 9111

Fax. +66 (0) 2613 6099

Registration No. 0107536000510

www.thanachart.co.th


900 Tonson Tower, Ploenchit Road, Lumpini,

Pathumwan, Bangkok 10330, THAILAND

Tel: +66 (0) 2655 9000

Fax: +66 (0) 2655 9001


www.thanachartbank.co.th

THANACHART SECURITIES PUBLIC COMPANY

LIMITED

444 MBK Tower, 14th 18th and 19th Floor,

Phayathai Road, Wangmai, Pathumwan,


Tel: +66 (0) 2217 8888, 2611 9222, 2217 9595

Fax: +66 (0) 2217 9642


www.tnsitrade.com

THANACHART FUND MANAGEMENT COMPANY

LIMITED

898 Ploenchit Tower, 15th and 18th Floor,

Ploenchit Road, Lumpini, Pathumwan,


Tel: +66 (0) 2126 8300

Fax: +66 (0) 2263 0811


www.thanachartfund.com

THANACHART INSURANCE COMPANY LIMITED

1 Glas Haus Building, 10th Floor, Sukhumvit 25 Road,

North Klongtoey, Wattana, Bangkok 10110, THAILAND

Tel: +66 (0) 2661 7999

Fax: +66 (0) 2204 6904


www.thanachartinsurance.co.th

THANACHART LIFE ASSURANCE COMPANY

LIMITED

231 Thanachart Life Assurance Building,

Ratchadamri Road, Lumpini, Pathumwan,


Tel: +66 (0) 2207 4200

Fax: +66 (0) 2253 8484


www.thanachartlife.co.th

Thanachart Contact Center 1770



BRANCHES OF THANACHART BANK

PUBLIC COMPANY LIMITED

Information as of 31 December 2009

HEAD OFFICE TonsonBranch Tel. +66 (0) 2655 9000 Fax. +66 (0) 2655 9585 BANGKOK AND VICINITIES

BANGKOK DepartmentofLandTransportBranchTel. +66 (0) 2272 6073-5 Fax. +66 (0) 2272 6077

KhlongTanBranch Tel. +66 (0) 2314 2642-4 Fax. +66 (0) 2719 8031

SeaconSquare2Branch Tel. +66 (0) 2322 9724-6 Fax. +66 (0) 2721 9252

SeaconSquareSrinakarinBranch Tel. +66 (0) 2721 9955 Fax. +66 (0) 2721 8321

CentralPinKlaoBranch Tel. +66 (0) 2884 9680-3 Fax. +66 (0) 2884 9684

CentralRama2Branch Tel. +66 (0) 2872 4770 Fax. +66 (0) 2872 4769

CentralRama3Branch Tel. +66 (0) 2211 8260 Fax. +66 (0) 2211 8190

TheAvenueChaengwattanaBranch Tel. +66 (0) 2573 0673-5 Fax. +66 (0) 2573 0677

TheMallBangKapiBranch Tel. +66 (0) 2375 1575Fax. +66 (0) 2375 1686

TheMallBangKhaeBranch Tel. +66 (0) 2803 8310 Fax. +66 (0) 2803 8305

TalatPhatthanakanBranch Tel. +66 (0) 2320 2922-4 Fax. +66 (0) 2722 1045

TOYOTABUZZKaset-NawaminBranchTel. +66 (0) 2561 0069-71 Fax. +66 (0) 2561 0073

ThanonCharoenNakhonBranch Tel. +66 (0) 2438 6953-5 Fax. +66 (0) 2860 4355

ThanonNangLinchiBranch Tel. +66 (0) 2286 1971, +66 (0) 2286 1898Fax. +66 (0) 2286 1939

ThanonPhatthanakanBranch Tel. +66 (0) 2369 2814-7 Fax. +66 (0) 2369 2818

ThanonRamkhamhaeng2Branch Tel. +66 (0) 2397 6173-5 Fax. +66 (0) 2728 4061

ThanonSathonNueaBranch Tel. +66 (0) 2267 7512-4 Fax. +66 (0) 2637 8975

ThongLoBranchTel. +66 (0) 2381 8421-2, +66 (0) 2381 8364-5Fax. +66 (0) 2381 8423

ThongLoSoi3Branch Tel. +66 (0) 2392 5802-4Fax. +66 (0) 2712 8168

TopsRCABranch Tel. +66 (0) 2203 0267-9 Fax. +66 (0) 2641 5121

TescoLotusBangKapiBranchTel. +66 (0) 2377 8029, +66 (0) 2377 8092, +66 (0) 2377 8147Fax. +66 (0) 2377 8508

TescoLotusRama4Branch Tel. +66 (0) 2249 7533-5 Fax. +66 (0) 2249 7537

TescoLotusPhetKasem81Branch Tel. +66 (0) 2489 2087-9Fax. +66 (0) 2812 4073

TescoLotusLatPhraoBranch Tel. +66 (0) 2512 1955, +66 (0) 2512 1963, +66 (0) 2512 1977Fax. +66 (0) 2939 3043

BangKhunNonBranch Tel. +66 (0) 2434 6067-8, +66 (0) 2434 6078, +66 (0) 2882 4595Fax. +66 (0) 2882 4581

BangNaBranch Tel. +66 (0) 2397 3757 Fax. +66 (0) 2398 0185

BangNa-Tratkm.4Branch Tel. +66 (0) 2399 2841-3 Fax. +66 (0) 2399 2845

BoBaeBranch Tel. +66 (0) 2356 0755-8 Fax. +66 (0) 2356 0759

PTTThanonSeriThaiBranch Tel. +66 (0) 2187 2009-11 Fax. +66 (0) 2187 2013

PratuNumBranch Tel. +66 (0) 2208 0072-5 Fax. +66 (0) 2208 0076

Rama4Branch Tel. +66 (0) 2661 5534-7Fax. +66 (0) 2661 5539

PhlapphlachaiBranchTel. +66 (0) 2224 6922-3, +66 (0) 2224 6930Fax. +66 (0) 2224 6947

PhahonYothinSoi9BranchTel. +66 (0) 2270 1371-3, +66 (0) 2619 6399Fax. +66 (0) 2619 6339

PhetKasemBranch Tel. +66 (0) 2456 0337-42 Fax. +66 (0) 2454 4116

PlatinumPratuNamBranch Tel. +66 (0) 2121 9683-5Fax. +66 (0) 2121 9687

MahBoonKrongBranch Tel. +66 (0) 2611 5710-4Fax. +66 (0) 2611 5717

MajorRatchayothinBranch Tel. +66 (0) 2512 1082, +66 (0) 2512 1102, +66 (0) 2512 1248Fax. +66 (0) 2939 5372

UnionMallLatPhraoBranch Tel. +66 (0) 2511 0236, +66 (0) 2511 0246, +66 (0) 2511 0256Fax. +66 (0) 2511 0268

YaowaratBranch Tel. +66 (0) 2221 1868, +66 (0) 2221 1845-7Fax. +66 (0) 2221 1869

RatchadaPhisek(GlasHausBuilding)Branch Tel. +66 (0) 2693 9811 Fax. +66 (0) 2693 9820

RamkhamhaengSoi122Branch Tel. +66 (0) 2372 2377-9, +66 (0) 2728 2947Fax. +66 (0) 2728 2950

RamkhamhaengSoi129Branch Tel. +66 (0) 2372 3318-20 Fax. +66 (0) 2729-5832

RamkhamhaengSoi24BranchTel. +66 (0) 2300 4956-8 Fax. +66 (0) 2719 1258

Navaminthra9HospitalBranch Tel. +66 (0) 2518 1100, +66 (0) 2518 2360-1Fax. +66 (0) 2518 2363

LatPhraoHospitalBranch Tel. +66 (0) 2932 2473-5 Fax. +66 (0) 2932 2530

SamitivejHospitalSukhumvit49Branch Tel. +66 (0) 2712 7013-5 Fax. +66 (0) 2712 7016

WongSawangBranch Tel. +66 (0) 2834 9999 Fax. +66 (0) 2834 9905

TheGovernmentComplexCommemoratingChaengwattana(BuildingB)Branch Tel. +66 (0) 2143 9393-5 Fax. +66 (0) 2143 9397

SanamPaoBranch Tel. +66 (0) 2271 0026-8 Fax. +66 (0) 2271 0030

Rama7Bridge(BangPhlat)Branch Tel. +66 (0) 2423 9011-3 Fax. +66 (0) 2423 9015

SilomBranch Tel. +66 (0) 2266 7414-7 Fax. +66 (0) 2266 7416

SukhumvitSoi47Branch Tel. +66 (0) 2204 0307-9 Fax. +66 (0) 2662 5632

SurawongBranch Tel. +66 (0) 2234 5964-6 Fax. +66 (0) 2631 7031

AllSeasonsPlaceBranch Tel. +66 (0) 2250 7611-3 Fax. +66 (0) 2250 7615

UdomSukBranch Tel. +66 (0) 2398 4024-7 Fax. +66 (0) 2398 4028

EsplanadeRatchadaBranch Tel. +66 (0) 2354 2052-4 Fax. +66 (0) 2660 9250

SUB BRANCH

GreenPlace(SoiWatPhaiNgoen)SubBranch Tel. +66 (0) 2211 3515, +66 (0) 2211 3519-20Fax. +66 (0) 2674 9704

KhlongThomSubBranchTel. +66 (0) 2221 1677, +66 (0) 2221 1671Fax. +66 (0) 2221 1679

CarrefourBangBonSubBranch Tel. +66 (0) 2416 9969-71 Fax. +66 (0) 2416 9974

CenturyTheMoviePlazaSubBranch Tel. +66 (0) 2245 8500-2 Fax. +66 (0) 2245 8504

CentralWorldSubBranch Tel. +66 (0) 2646 1346-9 Fax. +66 (0) 2646 1350

TheParkPlaceSubBranchTel. +66 (0) 2252 2677-8, +66 (0) 2651 9037, +66 (0) 2651 9038Fax. +66 (0) 2252 2679

TheMall2RamKhamhaengSubBranch Tel. +66 (0) 2369 2480, +66 (0) 2369 2486, +66 (0) 2369 2482Fax. +66 (0) 2369 2484

TheMallThaPhraSubBranch Tel. +66 (0) 2477 7321-3 Fax. +66 (0) 2477 7324



TaoPunSubBranch Tel. +66 (0) 2587 7292, +66 (0) 2587 7284-5Fax. +66 (0) 2587 7379

TalatYingCharoenSubBranch Tel. +66 (0) 2552 8043, +66 (0) 2552 8045, +66 (0) 2552 8047, +66 (0) 2972 3159Fax. +66 (0) 2972 3161

ThanonChanSubBranch Tel. +66 (0) 2285 5360 Fax. +66 (0) 2285 5361

ThanonPetchaburiTatMaiSubBranchTel. +66 (0) 2254 0252-4 Fax. +66 (0) 2254 0255

ThanonMangkonSubBranch Tel. +66 (0) 2225 3331, +66 (0) 2225 3863, +66 (0) 2225 4727Fax. +66 (0) 2225 8364

ThanonSirindhornSubBranchTel. +66 (0) 2434 5028-9, +66 (0) 2434 5947-8Fax. +66 (0) 2434 5661

TescoLotusWangHinSubBranch Tel. +66 (0) 2578 6194-6 Fax. +66 (0) 2578 6197

BangRakSubBranch Tel. +66 (0) 2234 4227-9 Fax. +66 (0) 2630 9027

BangLamphuSubBranch Tel. +66 (0) 2356 0782-6 Fax. +66 (0) 2356 0787

BigCDonMueangSubBranch Tel. +66 (0) 2551 0639-40 Fax. +66 (0) 2551 0642

BigCBangNaSubBranchTel. +66 (0) 2396 0482, +66 (0) 2396 0484-5Fax. +66 (0) 2396 0500

BigCPhetKasemSubBranch Tel. +66 (0) 2444 2927, +66 (0) 2444 2904, +66 (0) 2444 2906Fax. +66 (0) 2444 2909

BigCEkkamaiSubBranch Tel. +66 (0) 2714 8274-7 Fax. +66 (0) 2714 8268

PhahonYothinSoi6SubBranch Tel. +66 (0) 2279 9874-6 Fax. +66 (0) 2279 9895

FashionIslandSubBranchTel. +66 (0) 2519 5784, +66 (0) 2519 5753, +66 (0) 2519 5742Fax. +66 (0) 2519 5718

MoneyParkSubBranch Tel. +66 (0) 2686 3959-62 Fax. +66 (0) 2686 3963

RatchadamnoenKlangSubBranch Tel. +66 (0) 2226 3083-5, +66 (0) 2621 2185Fax. +66 (0) 2621 2186

RatchawongSubBranch Tel. +66 (0) 2622 9050 Fax. +66 (0) 2622 9029

VichaiyutHospitalSubBranch Tel. +66 (0) 2278 2194-6 Fax. +66 (0) 2278 2606

LatKrabangSubBranch Tel. +66 (0) 2327 2754-7 Fax. +66 (0) 2327 2706

WongwianYaiSubBranchTel. +66 (0) 2438 2486, +66 (0) 2438 2562, +66 (0) 2438 2567, +66 (0) 2861 6027Fax. +66 (0) 2438 2568

WatcharaphonSubBranch Tel. +66 (0) 2508 2185-7 Fax. +66 (0) 2508 2207

SiWorachakSubBranchTel. +66 (0) 2222 1912, +66 (0) 2222 1917, +66 (0) 2222 1965Fax. +66 (0) 2622 9338

SiwaraSubBranch Tel. +66 (0) 2538 8466, +66 (0) 2538 8986, +66 (0) 2538 8670, +66 (0) 2538 7039Fax. +66 (0) 2538 9378

SiamDiscoverySubBranch Tel. +66 (0) 2658 0491-3 Fax. +66 (0) 2658 0494

SiamParagonSubBranch Tel. +66 (0) 2129 4374-7 Fax. +66 (0) 2129 4372

SiamSquareSubBranch Tel. +66 (0) 2252 7363-5 Fax. +66 (0) 2252 7367

SilomSoi15SubBranch Tel. +66 (0) 2237 4192-4, +66 (0) 2635 0272Fax. +66 (0) 2635 0270

SilomComplexSubBranch Tel. +66 (0) 2235 8832 Fax. +66 (0) 2235 8833

SukhumvitSoi101/1(PiyaromPlace)SubBranch Tel. +66 (0) 2393 2033-5, +66 (0) 2741 8016Fax. +66 (0) 2741 8017

SukhumvitSoi25SubBranch Tel. +66 (0) 2259 4727-9 Fax. +66 (0) 2259 4730

SeriCenterSubBranch Tel. +66 (0) 2325 9072-4 Fax. +66 (0) 2325 9075

MBKCenterSubBranch Tel. +66 (0) 2611 4752-4 Fax. +66 (0) 2611 4751

MBKTowerSubBranch Tel. +66 (0) 2611 9480 Fax. +66 (0) 2611 9557

CarrefourRama2SubBranch Tel. +66 (0) 2451 4402, +66 (0) 2451 4409, +66 (0) 2451 4460Fax. +66 (0) 2451 4882

ChamchuriSquareSubBranch Tel. +66 (0) 2160 5254-6 Fax. +66 (0) 2160 5258

CentralRamInthraSubBranch Tel. +66 (0) 2552 7462, +66 (0) 2552 7467-8 Fax. +66 (0) 2970 5518

ThePaseo(LatKrabang)SubBranch Tel. +66 (0) 2346 4103-4, +66 (0) 2346 4109Fax. +66 (0) 2346 4111

ThanonPrachaUthit(ThungKhru)SubBranch Tel. +66 (0) 2426 7017-9 Fax. +66 (0) 2873 4030

ThanonSueaPaSubBranch Tel. +66 (0) 2221 4327-9 Fax. +66 (0) 2623 0579

NawaminTownCenterSubBranch Tel. +66 (0) 2519 1142, +66 (0) 2519 1154, +66 (0) 2519 1194Fax. +66 (0) 2946 7432

BigCSukhaphiban3(Ramkhamhaeng)SubBranchTel. +66 (0) 2916 3584-5, +66 (0) 2916 3603 Fax. +66 (0) 2916 3607

PakKhlongTalatSubBranch Tel. +66 (0) 2225 1555, +66 (0) 2225 1628, +66 (0) 2225 1629Fax. +66 (0) 2623 6527

PhahuratSubBranch Tel. +66 (0) 2221 4409, +66 (0) 2221 4419-20 Fax. +66 (0) 2623 8098

PaoloMemorialHospitalChokChai4SubBranch Tel. +66 (0) 2514 3277, +66 (0) 2514 3293-4Fax. +66 (0) 2933 2292

PaoloMemorialHospitalPhahonYothinSubBranchTel. +66 (0) 2357 1774-6 Fax. +66 (0) 2616 6028

LatPhraoSoi101SubBranch Tel. +66 (0) 2187 0162-4Fax. +66 (0) 2187 0161

SiriratSubBranch Tel. +66 (0) 2412 4515, +66 (0) 2412 4583-4 Fax. +66 (0) 2866 3218

VichaiyutMedicalCenterSubBranch Tel. +66 (0) 2357 1916-8 Fax. +66 (0) 2619 7043

SuanPhluSubBranch Tel. +66 (0) 2287 3084-5, +66 (0) 2287 3074Fax. +66 (0) 2679 3028

AsokSubBranch Tel. +66 (0) 2204 1695-7 Fax. +66 (0) 2204 1699

IndiaEmporiumSubBranch Tel. +66 (0) 2224 0133, +66 (0) 2224 0135-6Fax. +66 (0) 2623 9434

VICINITIES

CarrefourSamrongBranch Tel. +66 (0) 2380 1100-2 Fax. +66 (0) 2755 0240

ChaengWattanaBranch(SoftwarePark)Tel. +66 (0) 2962 0066, +66 (0) 2962 0415-6Fax. +66 (0) 2962 0376

CentralChaengwattanaBranch Tel. +66 (0) 2193 8114-6 Fax. +66 (0) 2101 0710

CentralRattanathibetBranch Tel. +66 (0) 2525 4736-8 Fax. +66 (0) 2969 7537

TheMallNgamwongwanBranch Tel. +66 (0) 2550 1231-4 Fax. +66 (0) 2550 1235

TescoLotusNavanakhonBranch Tel. +66 (0) 2529 6187-9 Fax. +66 (0) 2909 7097

TescoLotusLamLukKaKhlong6Branch Tel. +66 (0) 2569 1694-5, +66 (0) 2569 1655Fax. +66 (0) 2998 8164

TescoLotusSrinagarindraBranch Tel. +66 (0) 2175 7844-6 Fax. +66 (0) 2759 9054

NonthaburiBranch Tel. +66 (0) 2526 3453-6 Fax. +66 (0) 2526 3457

BangYaiBranch Tel. +66 (0) 2594 1143, +66 (0) 2594 1152, +66 (0) 2594 1154Fax. +66 (0) 2594 1161

BigCSamutPrakanBranch Tel. +66 (0) 2702 1792-3, +66 (0) 2702 1859-60Fax. +66 (0) 2702 1982

BigCSukSawatBranch Tel. +66 (0) 2463 7700, +66 (0) 2463 1894-6Fax. +66 (0) 2463 7144

RangsitBranch Tel. +66 (0) 2567 1117, +66 (0) 2567 5586Fax. +66 (0) 2567 6694

ImperialWorldSamrongBranch Tel. +66 (0) 2380 2943-5, +66 (0) 2756 9023Fax. +66 (0) 2756 9024



SUB BRANCH

TaladThaiSubBranch Tel. +66 (0) 2529 6171-3 Fax. +66 (0) 2529 6175

ThanonSamakkhiSubBranch Tel. +66 (0) 2582 8146-8 Fax. +66 (0) 2997 6042

SuvarnabhumiAirportSubBranch Tel. +66 (0) 2134 4085-6 Fax. +66 (0) 2134 4089

TescoLotusRattanaThibetSubBranchTel. +66 (0) 2950 1160, +66 (0) 2950 1297Fax. +66 (0) 2950 1157

BangBuaThongSubBranch Tel. +66 (0) 2571 7124, +66 (0) 2571 7142-3Fax. +66 (0) 2920 9603

BigCBangPhliSubBranch Tel. +66 (0) 2312 2284, +66 (0) 2312 2380 Fax. +66 (0) 2312 2321

PakNamSubBranch Tel. +66 (0) 2173 7882-4 Fax. +66 (0) 2702 8037

FutureParkRangsitSubBranch Tel. +66 (0) 2958 5116-9 Fax. +66 (0) 2958 5121

PaoloMemorialHospitalSamutPrakanSubBranchTel. +66 (0) 2182 7239-41 Fax. +66 (0) 2182 7243

CENTRAL REGION

KanchanaburiBranch Tel. +66 (0) 3451 8763, +66 (0) 3462 1565-6, +66 (0) 3462 1567Fax. +66 (0) 3451 4961

KamphaengPhetBranch Tel. +66 (0) 5572 0575, +66 (0) 5571 3325 -6Fax. +66 (0) 5571 3368

TescoLotusPranBuriBranch Tel. +66 (0) 3254 2436-7, +66 (0) 3254 2445Fax. +66 (0) 3282 5777

TescoLotusMahachaiBranch Tel. +66 (0) 3482 6231, +66 (0) 3482 6060, +66 (0) 3482 6107Fax. +66 (0) 3442 1356

NakhonPathomBranch Tel. +66 (0) 3421 9131 Fax. +66 (0) 3421 9160

PhraNakhonSiAyutthayaBranch Tel. +66 (0) 3523 5611 Fax. +66 (0) 3523 5630

PhutthamonthonSai4Branch Tel. +66 (0) 2420 0444, +66 (0) 2420 5964, +66 (0) 2420 5976Fax. +66 (0) 2813 1116

PhetchaburiBranch Tel. +66 (0) 3241 0505, +66 (0) 3241 0506, +66 (0) 3241 0514Fax. +66 (0) 3240 0618

RatchaburiBranch Tel. +66 (0) 3231 1203-5 Fax. +66 (0) 3231 1207

LopBuriBranch Tel. +66 (0) 3661 8023, +66 (0) 3661 8083-4Fax. +66 (0) 3642 4846

SamutSongkhramBranch Tel. +66 (0) 3472 0744, +66 (0) 3472 0148-9 Fax. +66 (0) 3471 6267

SamutSakhonBranchTel. +66 (0) 3482 0359-60, +66 (0) 3482 0365-6Fax. +66 (0) 3482 0445

SaraburiBranch Tel. +66 (0) 3631 7722 Fax. +66 (0) 3631 6601

SingBuriBranch Tel. +66 (0) 3653 0410, +66 (0) 3653 0413, +66 (0) 3653 0432Fax. +66 (0) 3651 2021

SuphanBuriBranchTel. +66 (0) 3552 5742, +66 (0) 3550 1237, +66 (0) 3550 1302, +66 (0) 3550 1361Fax. +66 (0) 3552 5743

HuaHinBranch Tel. +66 (0) 3251 6663-6Fax. +66 (0) 3253 2919

OmYaiBranchTel. +66 (0) 2420 4920, +66 (0) 2420 4930, +66 (0) 2420 4955Fax. +66 (0) 2811 6538

SUB BRANCH

ThanonSutBanthat(Saraburi)SubBranch Tel. +66 (0) 3631 4256-7, +66 (0) 3631 4512Fax. +66 (0) 3631 5404

PhraPathomChediSubBranch Tel. +66 (0) 3425 4203-5, +66 (0) 3421 3541Fax. +66 (0) 3425 9131

RojanaIndustrialParkAyutthayaSubBranch Tel. +66 (0) 3571 9710-2 Fax. +66 (0) 3533 1651

AyutthayaParkSubBranch Tel. +66 (0) 3522 9560-2 Fax. +66 (0) 3522 9554

NORTHERN REGION

ChiangRaiBranch Tel. +66 (0) 5374 5244-6 Fax. +66 (0) 5374 5247

ThanonChangChlan(ChiangMai)Branch Tel. +66 (0) 5382 0538-41Fax. +66 (0) 5382 0543

NakhonSawanBranch Tel. +66 (0) 5631 3848, +66 (0) 5622 5444Fax. +66 (0) 5631 3850

PhitsanulokBranch Tel. +66 (0) 5530 4313 Fax. +66 (0) 5530 4279

LampangBranch Tel. +66 (0) 5431 8927-30Fax. +66 (0) 5431 6960

SukhothaiBranch Tel. +66 (0) 5561 6022, +66 (0) 5562 2465-6Fax. +66 (0) 5562 2469

TalatVarorotBranch Tel. +66 (0) 5387 4018-9, +66 (0) 5387 4002 Fax. +66 (0) 5387 4006

TakBranchTel. +66 (0) 5554 0219, +66 (0) 5554 0889, +66 (0) 5554 0988Fax. +66 (0) 5551 3988

ThaPhaeBranch Tel. +66 (0) 5323 5755 Fax. +66 (0) 5323 5757

TescoLotusChiangMaiHangDongBranch Tel. +66 (0) 5380 6266-8 Fax. +66 (0) 5328 1460

TescoLotusPhitsanulokBranch Tel. +66 (0) 5537 7254, +66 (0) 5537 7256, +66 (0) 5537 7287Fax. +66 (0) 5537 7356

PhichitBranch Tel. +66 (0) 5665 1214-6 Fax. +66 (0) 5661 5858

PhetchabunBranch Tel. +66 (0) 5674 4076-8 Fax. +66 (0) 5672 2415

PhraeBranchTel. +66 (0) 5462 6811, +66 (0) 5462 6931, +66 (0) 5462 6962Fax. +66 (0) 5453 2837

UttaraditBranch Tel. +66 (0) 5544 1777, +66 (0) 5544 2240, +66 (0) 5544 2294Fax. +66 (0) 5541 4096

SUB BRANCH

CentralAirportChiangMaiSubBranch Tel. +66 (0) 5320 1234Fax. +66 (0) 5320 1900

ThanonKosi(NakhonSawan)SubBranch Tel. +66 (0) 5631 3929-31 Fax. +66 (0) 5631 3932

ThanonChangPhueak(ChiangMai)SubBranch Tel. +66 (0) 5323 1060, +66 (0) 5341 2116-7, +66 (0) 5341 2033Fax. +66 (0) 5323 1061

ThanonNimmanheminSubBranchTel. +66 (0) 5322 5463, +66 (0) 5340 0672-4Fax. +66 (0) 5340 0675

ThanonBaromTraiLokanart2(Phitsanulok)SubBranch Tel. +66 (0) 5521 7864-7 Fax. +66 (0) 5521 8648

ThanonPhahonYothin(ChiangRai)SubBranchTel. +66 (0) 5371 6433, +66 (0) 5371 6979, +66 (0) 5371 8394Fax. +66 (0) 5371 9088

McCormickHospital(ChiangMai)SubBranch Tel. +66 (0) 5326 1218-9, +66 (0) 5330 0421Fax. +66 (0) 5326 1123

NORTH EASTERN REGION

KalasinBranchTel. +66 (0) 4382 1080-1, +66 (0) 4382 1420Fax. +66 (0) 4381 6584

KhonKaenBranchTel. +66 (0) 4332 4321, +66 (0) 4322 6888Fax. +66 (0) 4332 5919

TescoLotusChaiyaphumBranch Tel. +66 (0) 4483 8324-6 Fax. +66 (0) 4481 3352

NakhonPhanomBranch Tel. +66 (0) 4251 4500 Fax. +66 (0) 4251 4501

NakhonRatchasimaBranchTel. +66 (0) 4426 9797Fax. +66 (0) 4426 9790

BigCYasothonBranch Tel. +66 (0) 4572 4361, +66 (0) 4572 4376, +66 (0) 4572 4423 Fax. +66 (0) 4572 5067

BuriRamBranch Tel. +66 (0) 4460 2573, +66 (0) 4462 5471, +66 (0) 4462 5476Fax. +66 (0) 4460 2575

MahaSarakhamBranch Tel. +66 (0) 4374 0681-3 Fax. +66 (0) 4372 2958

RoiEtBranch Tel. +66 (0) 4352 3335-8Fax. +66 (0) 4352 3339

LoeiBranch Tel. +66 (0) 4283 0851-3 Fax. +66 (0) 4281 4472



SiSaKetBranch Tel. +66 (0) 4562 0500-2 Fax. +66 (0) 4564 4197

SakonNakhonBranchTel. +66 (0) 4271 5767, +66 (0) 4273 6146-8 Fax. +66 (0) 4271 5686

SurinBranch Tel. +66 (0) 4453 8517-20 Fax. +66 (0) 4453 8521

NongKhaiBranch Tel. +66 (0) 42460 119-22Fax. +66 (0) 4246 0199

UdonThaniBranch Tel. +66 (0) 4234 2550 Fax. +66 (0) 4234 2398

UbonRatchathaniBranchTel. +66 (0) 4528 4272 Fax. +66 (0) 4528 4273

SUB BRANCH

ThanonKlangMueang(KhonKaen)SubBranchTel. +66 (0) 4322 8266, +66 (0) 4332 2630, +66 (0) 4332 2632Fax. +66 (0) 4332 2386

ThanonPhoSi(UdonThani)SubBranch Tel. +66 (0) 4234 3817-8Fax. +66 (0) 4234 3727

TescoLotusKhoratSubBranch Tel. +66 (0) 4426 3564-7Fax. +66 (0) 4426 3565

PakChongSubBranch Tel. +66 (0) 4431 6866-9 Fax. +66 (0) 4431 6859

WarinChamrapSubBranch Tel. +66 (0) 4532 5075, +66 (0) 4528 6171-3 Fax. +66 (0) 4532 5076

SurinPlazaSubBranch Tel. +66 (0) 4453 8517-20 Fax. +66 (0) 4453 8521

ThaoSuranariMonumentSubBranch Tel. +66 (0) 4424 1774, +66 (0) 4424 1775Fax. +66 (0) 4424 1776

EASTERN REGION

CarrefourChonBuriBranch Tel. +66 (0) 3878 3032-4 Fax. +66 (0) 3838 7923

ChanthaburiBranch Tel. +66 (0) 3934 4323-6 Fax. +66 (0) 3934 4327

ChachoengsaoBranchTel. +66 (0) 3881 2856-7, +66 (0) 3853 5336, +66 (0) 3581 2869Fax. +66 (0) 3881 2874

CentralChonBuriBranch Tel. +66 (0) 3805 3531-3 Fax. +66 (0) 3805 3535

CentralFestivalPattayaBeachBranch Tel. +66 (0) 3300 3571-3 Fax. +66 (0) 3804 3194

TheAvenuePattayaBranch Tel. +66 (0) 3872 3933-5 Fax. +66 (0) 3805 2002

TratBranchTel. +66 (0) 3953 1641-3 Fax. +66 (0) 3952 2662

ThanonChetchamnong(ChonBuri)Branch Tel. +66 (0) 3879 2203-5 Fax. +66 (0) 3879 2178

ThanonSukhumvit(ChonBuri)Branch Tel. +66 (0) 3879 6066, +66 (0) 3879 5639Fax. +66 (0) 3827 7841

NaKluea(Pattaya)Branch Tel. +66 (0) 3822 6060-61Fax. +66 (0) 3822 6117

BigCPattayaTaiBranchTel. +66 (0) 3837 4270, +66 (0) 3837 4273Fax. +66 (0) 3837 4463

BigCRayongBranchTel. +66 (0) 3887 3094, +66 (0) 3887 3301, +66 (0) 3887 3302Fax. +66 (0) 3862 2659

BigCSaKaeoBranch Tel. +66 (0) 3742 1761-3 Fax. +66 (0) 3742 1765

PattayaNueaBranch Tel. +66 (0) 3842 8901-2, +66 (0) 3842 8905Fax. +66 (0) 3842 8963

RayongBranchTel. +66 (0) 3886 4123 , +66 (0) 3886 4114Fax. +66 (0) 3886 4115

SriRachaBranch Tel. +66 (0) 3877 1686, +66 (0) 3877 1711 Ext. 103-115Fax. +66 (0) 3877 1690

NongMon(ChonBuri)Branch Tel. +66 (0) 3874 5233, +66 (0) 3874 5239, +66 (0) 3874 6329-30Fax. +66 (0) 3874 6349

SUB BRANCH

KlaengSubBranch Tel. +66 (0) 3888 4503-5 Fax. +66 (0) 3888 4506

ThanonPhrayaSatcha(ChonBuri)SubBranch Tel. +66 (0) 3879 2214-5, +66 (0) 3879 2217Fax. +66 (0) 3879 2216

TescoLotusPattayaNueaSubBranchTel. +66 (0) 3841 1410, +66 (0) 3841 1316Fax. +66 (0) 3841 1423

LaemChabangSubBranchTel. +66 (0) 3849 0230, +66 (0) 3849 1921-2 Fax. +66 (0) 3849 1924

SOUTHERN REGION

KrabiBranch Tel. +66 (0) 7563 2838-41Fax. +66 (0) 7563 2835

CarrefourHatYaiBranch Tel. +66 (0) 7446 9235-7 Fax. +66 (0) 7455 5609

ChumphonBranch Tel. +66 (0) 7750 5051-2 Fax. +66 (0) 7750 5054

TrangBranch Tel. +66 (0) 7522 3240-3 Fax. +66 (0) 7522 3244

ThanonRatsada(Phuket)BranchTel. +66 (0) 7621 9664, +66 (0) 7625 6873-5Fax. +66 (0) 7621 9731

TescoLotusChaoFa(Phuket)Branch Tel. +66 (0) 7626 8059-61 Fax. +66 (0) 7621 9248

TescoLotusPhuketBranch Tel. +66 (0) 7625 5472-4 Fax. +66 (0) 7652 3400

TescoLotusRanongBranch Tel. +66 (0) 7782 6636-8 Fax. +66 (0) 7782 6640

TescoLotusLamai(KoSamui)Branch Tel. +66 (0) 7741 8464, +66 (0) 7741 8565-6Fax. +66 (0) 7741 8720

NakhonSiThammaratBranch Tel. +66 (0) 7532 2689-90 Fax. +66 (0) 7532 2144

BigCPattaniBranch Tel. +66 (0) 7333 8004, +66 (0) 7331 3982-3Fax. +66 (0) 7333 8005

PhatthalungBranch Tel. +66 (0) 7462 6952-4 Fax. +66 (0) 7461 5451

PhuketBranch Tel. +66 (0) 7626 1570-5 Fax. +66 (0) 7626 1576

SiYaekThaRuea(Phuket)Branch Tel. +66 (0) 7661 7097-8, +66 (0) 7627 2274 Fax. +66 (0) 7661 7095

SuratThaniBranch Tel. +66 (0) 7721 3551-7 Fax. +66 (0) 7721 3560

HatYaiBranch Tel. +66 (0) 7435 4690 Fax. +66 (0) 7435 4696

HatYaiNaiBranch Tel. +66 (0) 7436 1313-5 Fax. +66 (0) 7425 9704

SUB BRANCH

KhokKloi(PhangNga)SubBranch Tel. +66 (0) 7643 4821-4 Fax. +66 (0) 7643 4827

CentralFestivalPhuketSubBranch Tel. +66 (0) 7620 9290 Fax. +66 (0) 7620 9291

DianaSiPhuwanartSubBranch Tel. +66 (0) 7446 5316-8 Fax. +66 (0) 7446 5319

ThanonChutiUthit(HatYai)SubBranch Tel. +66 (0) 7434 6396-8 Fax. +66 (0) 7434 6393

ThanonRatthakan(HatYai)SubBranch Tel. +66 (0) 7434 9070-2, +66 (0) 7426 1751Fax. +66 (0) 7426 1752

ThanonSiWichai(SuratThani)SubBranch Tel. +66 (0) 7720 6488, +66 (0) 7726 4170-1Fax. +66 (0) 7720 6671

ThaWang(NakhonSiThammarat)SubBranch Tel. +66 (0) 7531 3144-6 Fax. +66 (0) 7535 7067

ThungSongSubBranch Tel. +66 (0) 7541 3003-6Fax. +66 (0) 7541 3007

TescoLotusKrabiSubBranch Tel. +66 (0) 7565 0833, +66 (0) 7565 0836-7 Fax. +66 (0) 7565 0834

PatongSubBranch Tel. +66 (0) 7629 0585-7 Fax. +66 (0) 7629 0587

SongkhlaSubBranchTel. +66 (0) 7444 1198-9, +66 (0) 7444 1232Fax. +66 (0) 7444 1233

NaThon(KoSamui)SubBranchTel. +66 (0) 7723 6613, +66 (0) 7723 6616Fax. +66 (0) 7723 6611

HaYaekChalong(Phuket)SubBranch Tel. +66 (0) 7638 3222, +66 (0) 7638 3431Fax. +66 (0) 7638 3348



Throughout its 30 years of business operations,ThanachartGrouphas takena responsibleattitude towardssociety. The Group believes that conducting its businessaffairs which are underpinned by a sense of socialresponsibility, will lead to the long-term sustainability of thebusiness. Although there is no compulsory requirement forsuch activities, the Group has taken on the responsibilityvoluntarily.ThetopmanagementoftheGrouphasplayedanimportant role in promoting the principles of socialresponsibility.TheseprinciplesfallundertheumbrellaoftheGroup’s Corporate Social Responsibility (CSR) that placesemphasison“sustainablegrowthwithmoral righteousness”.Supportedbyitsstaff,businessalliances,localcommunitiesandsociety,theGroupispreparedtoconsistentlyparticipatein activities that support or help local communities andsocietyinalongtermmannerwithunderstandingandsincerity. In this regard, Thanachart Group’s sociallyresponsible activities can be divided into two maincategoriesasfollows: 1. SociallyResponsibleBusiness The conduct of its business affairs with socialresponsibilityisbasedontheprinciplesofCSRthatfocuson“sustainable growth with moral righteousness”. Throughoutits 30 years of business operations, the Group has strictlyadhered to the principle of rejecting any business that isethically questionable or socially harmful. Its mainstreambusinesspracticesthatreflectasenseofsocialresponsibilityincludethefollowing: 1.1 Theconductofbusinessaffairsofallmembercompanies of Thanachart Group does not support anybusinessororganizationthatisillegalorimmoral.Nordothecompanies involve themselves in such businesses ororganizations.StaffatalllevelsoftheGroupshallalsostrictlyadheretoethicalandmoralprinciples. 1.2 Insellingorofferinganyproductorservice, fullinformationabout its limitationsor termsandconditionshastobeclearlyandcompletelydisclosedtocustomersfromtheoutset. 1.3 Private information of customers has to beprotectedand remainsconfidential.Aswell,all themembercompanies strictly comply with the legal requirementsrelatingtotheprivateinformationofcustomers. 1.4 Officesandworkenvironmenthasbesafeandsupportiveofthewellbeingofthestaffmembers. 1.5 The Group promotes energy conservation,environmental protection and a reduction of the excessiveuse of paper and the use of toxic materials that cause airpollutionorareharmfultohealth.

2. CSRActivities TheGroupmay initiatesociallybeneficialactivitieson itsownor inviteexperts tohelporganizesuchactivities.Toachievetheobjectivesefficiently,itmayhavetoestablishrelationships with stakeholders that can help implement theactivities. In addition, it may also invite other groups ofstakeholderstoparticipateinthesociallybeneficialactivitiesin order to achieve a broader impact. Furthermore, for thebenefits to be gained by the beneficiaries, the Group hasdesigned activities to primarily focusing around thebeneficiaries. The CSR activities can be divided into twosub-categoriesasfollows: 2.1 Activities that encourages well-doings forsociety TBANK has taken the representative role topromote organization or business units for their charitableactivities to thesocietywithoutany returningdeeds throughthe “Ri Rerm .. Term Tem” (Initiate and Fulfill) program.The program reports to general public the updates onmissions for social activities,position of the organizationorcharities that are socially responsible, for instance,Foundation for Slum Child Care, Foundation for the BetterLife of Children, Foundation for Balance Growth of RuralCommunity - Plarnkhoi, Chaiyapruk Foundation, the ThaiScoutUnit, andSatabunSaengSawangFoundation.Thesearecharitableorganizationstosupporttheunderprivilegedinvarious areas including educationally disadvantagedpersons, disable persons, as well as the elderly. Thisprogramwasbroadcastedasa1.30-minutescoopof“KhonKhon Khon” (variety/talk show) Program on Channel 9(ModernNineTV). Apart from taking a role of an intermediarybetween beneficiaries and donors, TBANK also organizedtheeventcalled“ThanachartRiRerm..TermTem:SavingMeritFestival”whereby12charitiesandsocialunitswereprovidedtheopportunity topromote their sociallycharitableactivitiesaswellas to raise funds tosupport theirorganizations.Theeventhasprovensuccessful fromgoodresponses fromthepublic to support funding on the operating capital ofparticipating organizations. Moreover, TBANK has alsoinitiated the project “Donating via ATM with TBANK” bywhich the TBANK’s ATM card holders can donate to theparticipated charities at every TBANK’s ATM and branchescountrywide without any fee as another channel toencouragethesocialresponsibleactivities. 2.2 TBANK’sin-housesocialactivities The program has been initiated from thecooperation of all entities in Thanachart Group around the

CORPORATE SOCIAL RESPONSIBILITY



2

43

country.ThescopeofTBANK’ssocialresponsibilityactivitieshas been determined by the relevance of such activities tothe business and the real need of the community. Theactivities can be categorized according to the operatingguideline into the four major groups: (1) Education or childdevelopment; (2) Opportunity for the underprivileged in thesociety; (3) Road and traffic safety; and (4) Environmentalpreservation.Theobjectiveof theprogram is toprovide theopportunity for TBANK to be an integral part of the localcommunity where TBANK has business liability. Therefore,theactivitiesundertakenbyeachhubaredifferentaccordingtotheobserveddemandorlocalculturesineachcommunity,which will be proposed to the program’s committee forapproval.Theactivitieswillbeundertakenbyeachhubwiththesupportfromheadquarters,forexample: • “TBANKcareschildrenwearsafetyhelmet”Peoject The project launched a campaignencouraging the wear safety helmets to reduce trafficaccidentsof thekindergarten toelementaryschoolstudentswho commute to school on the back of their parent’smotorcycles.3,000helmetswereprovidedtostudentsoftheschoollocatedinSongkhla,Pattani,Phitsanulok,andNakhonPathom Provinces. Moreover, the project provided thelecturetotheparentsonhowtodrivesafelybytrafficpoliceaswell. • “Bicycleforyoungchildren”Project Atotalof200bicyclesweregiventorural

schools located in Amphur Fang, Chiang Mai Province,so thatstudentswho live in thedistantareacanspend lesscommuting time as they can borrow the bicycle to travelbetween their home and school. The project also helpedschools to maintain good condition of the bicycles for thegooduse.Furthermore, thedonationofcoats,blankets,andlearning equipments to these schools were also made byThanachartGroupaswellas itscustomers,executives,andstaffmembers. • “Ride bicycles to reduce pollutions andglobalwarming”Project Thiscontinualprojectbuiltparkingspacesfor bicycles in various locations around Bang Bua ThongMunicipality inNonthaburiProvince inorder toallowgreaterconveniencestothemembersofcommunitywhousebicycleto commute and at the same time encourage people toswitch to bicycle commuting to fight the global warmingcondition. • “Blood donation forMother of theNationandBlooddonation forFatherof theNation”Projectontheauspicious occasion of Her Majesty the Queen’s and HisMajesty the King’s Birthday with the support from the ThaiRedCross.Theprojecthasbeenregularlyorganizedandiscurrently in its 7th year. In addition, TBank provided blooddonors with free physical medical checkups, bloodchecks,as well as personal finance checkups. The blood donorswere also given seedlings, from which they could growtoconservetheglobalenvironment.

1.TBANKgavebicyclestostudentsinA.Fang,ChiangMai

provincein“ThanachartRiRerm..TermTem”programunder

theBicycleforyoungchildrenproject.

2.TBANKgavesafetyhelmetstochildrenin“Thanachart

RiRerm..TermTem”programundertheTBANKcareschildren

wearsafetyhelmetproject.

3.Mr.SuphadejPoonpipat,ChiefExecutiveOfficerdonated

supportingfundtoFoundationforSlumChildcare.

4.ExecutivesofThanachartGroupinvitedcustomersofMBK

Centertojointlysavemeritin“ThanachartRiRerm..TermTem”

fairundertheSavingMeritFestival.

TBANK cares children wear safety helmetWithHatYai,PhitsanulokandNakhonPathomHubs,ThanachartBankand themunicipalaswellasprovincial schools initiatedsocial responsibilityactivities to raiseawarenessof theguardiansandtheridersonthesafetyprecautionsinridingbicyclesandtheimportanceofthesafetyhelmetsespeciallyforthechildren.

1

Printed with Soy Ink

TBANK: Annual Report 2009 ENG

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income ratio5 percent

spread4 percent

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