Presentation for Analyst Meeting: Quarter 4/2016Presentation (PDF: 357 KB)

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• Established on June 8, 1945 with registered capital of Bt5mn (USD 0.14mn)

• Listed on the Stock Exchange of Thailand (SET) since 1976

Consolidated (as of December 2016)

Share Information

SET Symbol Share Capital:

KBANK, KBANK-F

Authorized Bt30.5bn (USD0.9bn) Issued and Paid-up Bt23.9bn (USD0.7bn) Number of Shares 2.4bn shares

Market Capitalization Bt425bn (USD11.9bn) Ranked #2 in Thai banking sector 4Q16 Avg. Share Price:

KBANK Bt174.52 (USD4.87)

KBANK-F Bt174.72 (USD4.88)

EPS Bt16.79 (USD0.47)

BVPS Bt134.44 (USD3.75)

Notes:

* Loans = Loans to customers less Deferred revenue

** Assets, loans and deposits market share is based on C.B.1.1 (Monthly statement of assets and liabilities) of 14 Thai commercial banks as of November 2016

*** Capital Adequacy Ratio (CAR) has been reported in accordance with Basel III Capital Requirement from 1 January 2013 onwards.

CAR is based on KASIKORNBANK FINANCIAL CONGLOMERATE. KASIKORNBANK FINANCIAL CONGLOMERATE means the company under

the Notification of the Bank of Thailand re: Consolidated Supervision, consisted of KBank, K Companies and subsidiaries operating in supporting KBank, Phethai Asset Management Co., Ltd. and other subsidiaries within the permitted scope from the BOT's to be financial conglomerate

Exchange rate at the end of December 2016 (Mid Rate) was Bt35.83 per USD (Source: Bank of Thailand)

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Topic Slide Page

• Operating Environment 4 - 5

• 2016 Key Financial Ratios 6

• 2017 Financial Targets 7

• Composition of Growth 8 - 11

• The K-Strategy 12

• Capital and Dividend 13 - 14

• Summary 15

  3

  Operating Environment: Economic Outlook for 2017

  Key GDP Forecasts and Assumptions

  Supporting Factors:

  % YoY

  6.0

  3.0

  0.0

  2.8 3.3 3.0-3.6

  % YoY	2015	2016F*	2017F*
  Range			Base Case
  GDP	2.8	3.3	3.0-3.6	3.3
  Private Consumption	2.1	3.1	2.0-2.4	2.2
  Government Consumption	2.2	1.0	3.0-3.4	3.2
  Total Investment	4.7	3.0	3.0-5.0	4.4
  - Public investment	29.8	10.3	6.5-10.5	8.5
  - Private investment	-2.0	0.5	2.4-3.2	2.8
  Gov't Budget Deficit (% of GDP)	-2.9	-2.9	-3.0 to -2.5	-2.7
  Exports (Customs Basis)	-5.8	0.1	-0.5 to 2.5	0.8
  Imports (Customs Basis)	-11.0	-4.6	0.2-4.5	2.0
  Current Account (USD bn)	32.1	44.2	38.0 - 48.0	43.0
  Headline Inflation	-0.9	0.2	1.3-2.3	1.8
  Policy Interest Rate**	1.50	1.50	1.50

  2015 2016F 2017F

• Public spending and tourism sector remain key growth drivers of the Thai economy, although at a slower pace due to last year's high base of comparison

• Export growth will turn slightly positive, attributable to a recovery in global commodity prices

Notes: The current MPC's policy rate is at 1.50% Source: * KResearch (as of December 21, 2016)

** KBank Capital Markets Research (as of December 6, 2016)

Challenges:

• Trade protectionism of the US and other countries may negatively affect economic recovery and stability in the medium term

• Risks could be incurred from Brexit implementation and fragility in Europe

• Fed Funds rate hike will produce impacts on capital movements, asset prices and foreign exchange

• China's economy may continue to slow down, but possibility of hard landing is limited

• Purchasing power of the Thai household sector is limited by the persistent high household debt

  4

  Interest Rate Outlook

  • The Fed will likely raise its interest rate further by 0.25% in 2017

US Core PCE* Price Index

US Policy Interest Rate

% YoY

3

% Fed's Projected Appropriate

3 Policy Path

2

2

1 1

0

2012 2013 2014 2015 2016

0

2012 2013 2014 2015 2016 2017f 2018f 2019f

• The BOT may keep its benchmark rate unchanged at 1.50% this year in order to support the overall economy, if inflation rate stays within its target range

• Factors to watch: capital outflows, asset prices' correction, higher cost of funding, and a weaker Baht

  Note: *PCE = Personal Consumption Expenditure

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  2016 Key Financial Ratios

  Consolidated	2015 Actual	2016 Actual	2016 Targets	Key Message
  ROE	14.54%	13.23%	N/A	Lower than 2015 ROE and ROA, as a result of economic slowdown, which reflects in lower revenue growth and higher provisioning expenses
  ROA	1.60%	1.49%	N/A
  NIM	3.67%	3.52%	3.3 - 3.5%	Achieved high-end of 2016 target range attributed to well managed cost of fund, although yield dropped from the year 2015; in line with interest rates trend
  Loan Growth	5.42% YoY	5.45% YoY	6 - 7%	Slightly lower than 2016 target range mainly due to SME and retail business; however, loan growth was still in line with economic growth
  Non-Interest Income Growth*	12.57% YoY	1.96% YoY	Up to 10%	2016 non-interest income growth reflects large base effect; in line with the economic slowdown, especially in insurance business. However, non-interest income ratio maintained from previous year and in line with the target
  Non-Interest Income Ratio	42.37%	41.54%	About 40%
  Cost to Income Ratio**	45.19%	41.63%	45.0 - 47.0%	Improved from the year 2015 and better than 2016 target range due to cost management regime
  Credit Cost (bps)	168 bps	204 bps	Up to 190 bps	Prudent credit cost. NPL ratio started to fall in 4Q16, although the NPL ratio was higher than in 2015; in line with slow economic recovery
  NPL Ratio (Gross)***	2.70%	3.32%	3.5 - 3.6%

  Note: * Non-Interest Income includes Net Premium Earned - net (Net Premium Earned less Underwriting Expenses) from Muang Thai Life Assurance PCL (MTL); KBank has a 38.25% economic interest in MTL; on the consolidated basis, Bancassurance fees are not included in net fee income, due to the elimination of inter-company transactions (the accounting treatment from the Muang Thai Group Holding consolidation); Non-Interest Income = Total Operating Income - net less Interest Income - net

  ** Cost to Income Ratio = Total Other Operating Expenses to Total Operating Income - net (Total Operating income less Underwriting Expenses)

  *** NPL Ratio (Gross) = NPL (gross) to total loans; NPL (gross) used in the calculation are loans to general customers and loans to financial institutions that are non-performing loans; total loans used in the calculation are loans to general customers and loans to financial institutions

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  2017 Financial Targets

  Consolidated	2016 Actual	2016 Targets	2017 Targets	Notes
  ROE	13.23%	N/A	N/A
  ROA	1.49%	N/A	N/A
  NIM	3.52%	3.3-3.5%	3.3-3.5%	Ranking maintained among large commercial banks
  Loan Growth	5.45% YoY	6-7%	4-6%	Decent and sustainable loan growth; in line with economic growth; subject to the success of government measures
  Non-Interest Income Growth*	1.96% YoY	Up to 10%	Up to 5%	Sensible growth from fee-driven businesses, reflects large base effect; in line with the economy and uncertainty factors, e.g. national e-payment
  Non-Interest Income Ratio	41.54%	About 40%	About 40%
  Cost to Income Ratio**	41.63%	45.0 - 47.0%	Mid-40s	Focus on cost management under pressure from income slowdown
  Credit Cost per year (bps)	204 bps	Up to 190 bps	200-225 bps	NPL ratio will start to fall in 4Q16; stabilize and move in a narrow range in 2017; credit cost will lag the NPL movement, and peak in 2017
  NPL Ratio (Gross)***	3.32%	3.5-3.6%	3.3-3.4%

  Note: * Non-Interest Income includes Net Premium Earned - net (Net Premium Earned less Underwriting Expenses) from Muang Thai Life Assurance PCL (MTL); KBank has a 38.25% economic interest in MTL; on the consolidated basis, Bancassurance fees are not included in net fee income, due to the elimination of inter-company transactions (the accounting treatment from the Muang Thai Group Holding consolidation); Non-Interest Income = Total Operating Income - net less Interest Income - net

  ** Cost to Income Ratio = Total Other Operating Expenses to Total Operating Income - net (Total Operating income less Underwriting Expenses)

  *** NPL Ratio (Gross) = NPL (gross) to total loans; NPL (gross) used in the calculation are loans to general customers and loans to financial institutions that are non-performing loans; total loans used in the calculation are loans to general customers and loans to financial institutions

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  Composition of Growth: Loans by Business (9M16)

  • Moderate loan growth momentum in line with full-year target

Loan Portfolio Structure Loan Portfolio

Bt bn

2,000

1,600

1,327

1,439

1,527

1,610 1,672

29% 31%

Co rporate

1,200

31%

30%

31%

38% 38%

SME

Loan Definition

Corporate Loans: Loans of KBank and KBank's Subsidiaries in Corporate Segments (annual sales turnover > Bt400mn)

SME Loans: Loans of KBank and KBank's Subsidiaries in SME Segments (annual sales turnover ≤ Bt400mn)

Retail Loans: Loans of KBank and KBank's Subsidiaries in Retail Segments

Other Loans: Loans in Enterprise Risk Management Division (NPL + Performing Restructured Loans) and other loan types

Note: Since 1Q13, as per the Bank of Thailand's requirement, the Bank has complied with TFRS 8 (Operating Segments) to present operating results for each key segment in financial reports

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