The Thai economy in 2019 grew 2.4 percent, down from 4.2 percent in the previous year. This was mainly due to the contraction in the export sector as a result of the economic slowdown in Thailand’s major trading partners and drastic trade-control measures. As well, the growth of government investment, private investment, and private consumption slowed down. Hence, the BOT’s Monetary Policy Committee voted to cut the policy interest rate by 25 basis points two times during the year. In effect, the benchmark rate was reduced to 1.25 percent per annum. On the other hand, commercial banking industry’s lending grew at a slower rate while non-performing loans rose in line with the economic slowdown.
In 2019, the Board of Directors of the Company as the parent company of Thanachart Financial Conglomerate revised the core operational strategy by restructuring Thanachart Group’s structure. In particular, the Company purchased the ordinary shares of TBANK’s subsidiaries and certain companies so that the Company directly held their shares. As well, it sold its ordinary shares of TBANK to TMB to facilitate the merger between TBANK and TMB. As a result, total assets of the merged bank doubled. In addition, the Company bought the newly issued shares of TMB and the Company had a 20.12 equity stake in TMB. The Company believed that revision of the strategy would have a positive impact in the future as the Company would be a major shareholder of a commercial bank whose total assets increased. Importantly, apart from being stronger, the merged bank would have higher competitiveness potential. In addition, with the purchases of the ordinary shares of TBANK’s subsidiaries and investments, the Company would have more diversified sources of income. After successfully implementing the revised strategy, the Company had excess cash of about 14,000 million baht. In this connection, the Board of Directors adopted guidelines for managing the excess cash. In particular, it set aside a fund of not exceeding 6,000 million baht for a share repurchase program and also a special interim dividend payment of 4.00 baht per share. The Company also planned to invest in the businesses in which it had expertise. These included, among others, financial businesses and non-performing asset management businesses. The goal was to get appropriate returns for shareholders.
As regards the operating performance in 2019, net profit of the Company and its subsidiaries amounted to 16,760 million baht, representing an increase of 954 million baht or 6.04 percent from the prior year. This was mainly attributable to the performance of TBANK and its subsidiaries as well as gains from selling the ordinary shares of TBANK to TMB (placed under the item named “profit for the year from discontinued operations”). The transaction was executed on 3 December 2019. The profit attributable to the Company was 10,807 million baht, up 2,968 million baht or 37.86 percent from the prior year. The earnings per share were 9.43 baht, an increase from 6.74 baht in the previous year.
In addition, in 2019 member companies of Thanachart Group continued to be widely recognized by external organizations, as reflected by numerous awards, such as the following:
- TBANK received the Best Automobile Lending Product of the Year in 2019. Noteworthy was the fact that it had won the award for three consecutive years since 2017. In addition, it received awards in the Best Bond Category and also in the Best Corporate Bond Category at the Asset Triple A Country Awards 2018. Moreover, TBANK won the award for the Credit Card Product of the Year in Thailand 2019.
- TNS won three awards at the IAA Best Analyst Awards 2018. It was also the Second Runner-Up Winner at the Best Local Brokerage Ranking. As well, it was a recipient of the 2018 Forecast Accuracy Award (FAA) granted by Consensus Economics, the world’s leading economic survey organization
- TFUND won the award for the Best Fixed Income Retirement Mutual Fund. Earlier, it won the same award in 2013 and also in 2015-2018. Noteworthy was the fact that the Fund continuously got a five-star rating.
- TNI won the Best Non-Life Insurance Company with Outstanding Management Award from the OIC. Noteworthy was the fact that the company received the award for three consecutive years. In addition, this year was the 8th year in which the company received this prestigious award. The company also won “the Year’s Outstanding Company Award” at 2nd Anniversary Thailand’s Smart Awards 2019 in the category of organization. Moreover, it received an honorable mention at the Best Surveyor Award 2018.
- Thanachart Group’s calendar entitled “Ta Song Sek Sang Sook Siam” won the runner-up award for the Wall Calendar in the monarchy institution honoring category. The Group had been receiving the Suriya Sasidhorn Award for sixteen consecutive years.
As for 2020, the commercial banking industry is still facing with a number of challenges. Against the backdrop of the economic conditions, there are internal and external risk factors, including the global outbreak of COVID-19 virus which have a wide-ranging impact on the economic growth. The business operations of the Company and its subsidiaries will be inevitably affected. However, the Board of Directors will closely monitor and assess the situation, not only to adjust the operational policies and strategies to exigencies of the situation but also minimize the negative impacts. In addition, as 2020 is the year in which TMB and TBANK implement the merger, the Board of Directors places emphasis on closely monitoring the progress of the merger, in order to ensure smooth implementation and minimum impacts on the two banks’ business operations. In relation to investments in other subsidiaries, the Board of Directors will give its support in all areas. These include the following: (1) securities brokerage business via TNS, (2) non-life and life insurance business via TNI and MBK Life (3) hire purchase business via THANI, and (4) non-performing asset management business via NFS AMC, MAX AMC, and TS AMC. In particular, the Board of Directors will participate in establishing their business policies and directions. The objective is to ensure that the business operations of all the companies are in line with the established targets and that all the stakeholders concerned jointly reap the maximum benefits possible.
Taking into consideration the normal operating performance as well as the gain from the sale of TBANK’s shares to facilitate the merger between TBANK and TMB, the Board of Directors has adopted a resolution proposing to shareholders for approval of the total dividend payment of 7.00 baht per share, which includes the dividend payment of 3.00 baht for normal operating performance in 2019 and the special dividend payment of 4.00 baht. Earlier in October 2018, the interim dividend payment of 1.20 baht per share was made to shareholders. Also, in January 2020, the special dividend payment of 4.00 baht was paid. As a result, in case the 2020 Annual General Meeting of Shareholders approves additional dividend payment of 1.80 baht per share, the total dividend payment made for the normal operating performance would amount to 3.00 baht per share, representing an increase when compared to 2.60 baht per share in the prior year.
In 2019, there were changes in the Board of Directors. Mr. Teeranun Srihong and Mr. Prinya Hom-anek were invited to sit on TMB’s Board of Directors as independent directors. As a result, they resigned as members of the Company’s Board of Directors, effective on 16 December 2019. To replace them, the Board of Directors adopted a resolution appointing Mrs. Salinee Wangtal and Dr. Thanachart Numnonda as members of the Board of Directors, effective on 1 January 2020. The Nomination, Remuneration, and Corporate Governance Committee proposed them to the Board of Directors for appointment as they had extensive knowledge and expertise in information technology related to financial business and corporate governance. In addition, the Board of Directors pays attention to the good corporate governance as well as the corporate social responsibility with respect to all groups of stakeholders. The objective is for Thanachart Group to achieve sustainable growth. In this connection, in 2019 the Company earned an excellent level of recognition (five-star rating) as it received a score of 97 for its organization of the annual general meeting of shareholders. The recognition was based on the corporate governance assessment survey of listed companies, which was conducted by the Thai Institute of Directors Association. The Company also played a partial role in fighting corruption. In this connection, all member companies of Thanachart Group had been certified members of Thailand’s Private Sector Collective Action Coalition against Corruption (CAC) since 2014. As regards social responsibility and environmental protection, the Company continued to support the activities related to energy conservation and wise use of resources. Importantly, it produced media materials for sharing knowledge about the basics of personal financial management and the correct methods to save money. The objective was to promote personal financial stability in the long term. Also noteworthy was the fact that the Company continued implementing corporate social responsibility activities in various areas, the details of which are given in this Annual Report.
The Board of Directors would like to thank not only all shareholders but also all groups of stakeholders for the trust in the Board and the continuous support to its performance of duties. It does hope that it will continue receiving support from all the parties concerned so that, after the revision of the business strategy, Thanachart Group will grow, become stronger, and achieve continuous success in the future.
On behalf of the Board of Directors,