The COVID-19 pandemic has wreaked havoc globally since early 2020. Every country has implemented COVID-19 suppression measures. These include reduction of activities which encourage spread of the coronavirus, population mobility reductions as well as national lockdown and lockdown of some cities, which brought international travels to a standstill. As a result, the pandemic has had wide-ranging impacts on social and economic sectors of almost all countries in the world, including Thailand inevitably. In this connection, the Thai economy contracted by 6.1 percent in 2020. Numerous businesses related to tourism, hotels, shopping centers, restaurants, as well as real estate suffer losses or have to shut down permanently. A large number of employees and workers have been subject to pay cuts or layoffs. All of these have set off a chain reaction which severely affects borrower’s ability to repay loans and the performance of financial institutions. It is necessary for the Thai government to launch several types of measures making use of special budgets which are huge in order to stimulate economy and support individuals who are hard hit by the situation.
As regards Thanachart Group in 2020, the Company which previously was a bank holding company, went through a major restructuring, turning itself into a diversified investment holding company. However, its shareholding in TMB still represented the majority of its investments. In this connection, the Company’s various investments as at 2020 year end could be classified as follows:
- Having a 20.11 percent equity stake in TMB with an investment value amounting to 42,076 million baht,
- Having a 58.85 percent equity stake in THANI with an investment value amounting to 13,397 million baht,
- Having a 50.96 percent equity stake in TNI with an investment value amounting to 2,697 million baht,
- Having a 50.96 percent equity stake in TNS with an investment value amounting to 1,771 million baht,
- Having a 51.00 percent equity stake in MBK LIFE with an investment value amounting to 613 million baht,
- Having equity stakes in MAX AMC, NFS AMC, and TS AMC with a combined investment value amounting to 1,042 million baht,
- Having a 22.42 percent equity stake in MBK with an investment value amounting to 4,900 million baht,
- Real estate projects for sale and development with a net book value amounting to 1,598 million baht, and
- High liquid assets worth about 10 billion baht.
As a result of the aforementioned restructuring of the Company, its income structure in 2020 changed significantly from the one in 2019. Based on the consolidated financial statements 2020 of the Company and its subsidiaries, total profit attributable to the Company amounted to 6,669 million baht. This was partly due to the gain from selling the Company’s equity stake in Ajinomoto. If the gain which was a one-time item was not taken into account, it could be seen that normal net profit of the Company and its subsidiaries in 2020 decreased significantly as the share of profit from investments in TMB and MBK decreased. These companies were in the commercial banking industry, the shopping center industry and the hotel industry which were directly and adversely impacted by the COVID-19 pandemic crisis. Moreover, the Company was not yet in a position to make use of its excess liquidity from the restructuring, for making investments which would generate high rates of return as originally planned. This was mainly because the Board of Directors recognized the economic conditions were still highly volatile. It was considered appropriate for the Company to continue maintaining the high liquidity until it felt confident the COVID-19 pandemic crisis could be definitely and clearly lessened.
With regard to 2021, although there occurs a new upsurge of local COVID-19 transmission during the period from late 2019 to early 2020, the suppression measures are quite effective. Moreover, the government is making arrangements for having half of the country’s population vaccinated against COVID-19 within 2021. As a result, the Thai economy will gradually recover. It is also expected that the Company’s performance will be better than 2020. In relation to its business direction, the Company will not only continue keeping existing equity stakes in the various companies but will also support the business operations of all the companies, ensuring their strong financial positions. Moreover, the Company will consider making additional investments and operating businesses in which it has expertise, in a more aggressive manner. It will also broaden business networks of Thanachart Group’s member companies, aiming to generate appropriate returns for shareholders in the long term. Early this year, the Board of Directors already adopted a resolution approving asset-based financing.
Sustainable business operation is always high on the Board of Directors’s of priorities. In relation to the good corporate governance, the Board of Directors announced and put in place the Corporate Governance Policy and the Handbook of the Code of Ethics, the Anti-corruption Policy, the Risk Management Policy as well as other related policies. Moreover, it requested its subsidiaries to consider announcing and putting in place the policies similar to the ones adopted by the Company. In this connection, it closely monitored the implementation of the various policies. With regard to corporate social responsibility, the Company organized various activities related to business operations, which were of benefit to the society. In addition, it improved its business operations and its conduct of business affairs, aiming to reduce emissions of pollutants, conserve energy, and reduce the use of natural resources. The improvements augured well for the environment, the details of which were given under the topic titled Responsibility for Sustainable Operations of Thanachart Group in this Annual Report. In 2020, the member companies of Thanachart Group continued to be well received by external organizations, as witnessed by the various awards as follows:
- The Company and TNS were granted the Deal of the Year Awards at “the SET Awards 2020”, for the merger between TMB and TBANK.
- TNS was the Second Runner-Up on “the Best Local Brokerage” Ranking.
- TNI was granted “the Product of the Year Awards 2020”. It was also a winner of Insurance Awards under the category of “Best Claims Management Insurance Company”.
- The Company and THANI were selected as companies with outstanding performance in Environment, Society and Governance (ESG). Also noteworthy was the fact that they received an “Excellent” rating in the assessment of corporate governance, according to the Corporate Governance Report of Thai Listed Companies 2020 (CGR 2020).
- Thailand’s Private Sector Collective Action Coalition against Corruption (CAC) renewed the memberships of the Company and all member companies of Thanachart Group which marked the 9th consecutive year of their memberships.
The Board of Directors would like to take this opportunity to express thankfulness to all shareholders as well as all groups of stakeholders for their continued good support and trust in its performance of duties. The Board of Directors stands ready to dedicate itself to steering, to the best of its abilities, Thanachart Group through this pandemic. In addition, the Board of Directors hopes that all parties will continue to give their support so that Thanachart Group will be able to grow strongly and achieve successes continuously in the future.
On behalf of the Board of Directors,