Islamic Bank of Thailand: Annual Report 2017

Transcription

3. Corporate Governance Mission : The Islamic Bank of Thailand which has a vital role with focus being placed on providing Shariah-based financial services to support the country’s economic and social development with good corporate practice, transparency, and examinable operation under our commitment: “Trust in Shariah, Confidence in iBank”.
4. Statement of Direction : SOD To be mechanism of fund raising and investment both domestically and overseas to provide financial support to individuals and business operators in line with the Shariah principle based on the stable financial position. Vision To be a reliable and trustworthy Islamic bank providing Shariah-compliant services in order to be the main bank of Muslim clients and clients doing businesses with Muslims, and to be alternative bank for general clients. Mission To have good management, systems of standard, competent staff and to operate business professionally. To operate transparently with good corporate governance. To have stability and grow sustainably with capability to treat stakeholders with balance. To support and connect businesses of Muslims and related parties. To participate in the stabilization, economic and social development, especially in the five southern border provinces. Strategy 1.1st Strategy: Implementation of Rehabilitation Plan To implement the rehabilitation plan approved by the related agency and the State Enterprise Policy Commission, by focusing on solving non-performing loans, financing Muslim clients, and finding investment partners to strengthen Islamic financial business operation, with monitoring and controls for operational adherence to the plan. 2.2nd Strategy: Role Expansion for Muslim Clients 2.1 To grow Muslim customer base in both deposit and loan.อ 2.2 To add a role supporting an establishment and operation of community financial organizations as per Islamic principle. 2.3 To develop products and financial services to better align with the Shariah principle, with audit and supervision systems to ensure the Bank’s financial transactions are correct and aligned with the Shariah principle. 3.3rd Strategy: Branch Efficiency Improvement To improve branches focusing on service provision efficiency in order to become profitable branches. 4.4th Strategy: Human Resources Development To enhance competency and quality of human resources to be ready for any change. 5.5th Strategy: IT Efficiency Enhancement To develop IT system, service provision procedures and operations to be efficient and ready for growth in targeted business segment.
5. Content 06 08 10 12 14 22 26 32 34 36 Financial Highlight Message from the Chairman Message from the President Message from the Chairman of Shariah Advisory Council Board of Directors Shariah Advisory Council Top Executives Organization Structure of Islamic Bank of Thailand Industry Review and Trend Operating Result of 2017 and Operating Plan of 2018 44 46 64 72 76 78 Significant Projects Good Corporate Governance Risk Management Internal Audit Report of the Audit Subcommittee Report of the Normination and Remuneration Subcommittee 79 Report of the CG & CSR Subcommittee 80 Corporate Social Responsbility and Public Relations 90 Bank Information 100 Auditor’s Report and Financial Statement
6. Financial Highlights Million Baht Change 2015 2016 2017 Amount Total assets 91 ,324.79 81,686.78 71,702.78 -9,984.00 -12.22% Financing 98,373.17 93,496.38 44,166.48 -49,329.90 -52.76% Financing and net accrued financial income 67,807.87 60,690.24 36,099.71 -24,590.53 -40.52% Deposits 99,530.20 93,498.08 85,239.59 -8,258.49 -8.83% Total liabilities 104,960.61 98,763.57 91,714.33 -7,049.24 -7.14% Shareholders’ equity -13,635.83 -17,076.80 -20,011.55 -2,934.75 -17.19% Financial position and the Company’s operating performances Financing and investment income 4,788.42 3,788.86 2,779.93 -1,008.93 -26.63% Total income 5,148.42 4,107.82 3,294.42 -813.40 -19.80% Net profits (loss) -4,643,77 -3,524.06 -2,926.45 597.61 16.96% -0.45 -0.34 -0.28 -1.33 -1.66 -1.95 -4.62 -4.07 -3.82 Returns on average equity -41.01 -22.95 -15.78 Net loss per total income -90.20 -85.79 -88.83 Capital adequacy ratio -21.72 -31.02 -52.83 Earnings per share: Baht Basic net loss per share Share value Book value Financial ratio (%) Income to average assets ratio 6 % Annual Report 2017
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8. Message from the Chairman It has been over 3 years since the Board of Directors of the Bank and I have been appointed to undertake management and reorganization of the Islamic Bank of Thailand (IBT), which is one of seven state enterprises that encountered the financial crisis and had been subject to the supervision of the State Enterprise Policy Commission (SEPC). After IBT had improved the quality and efficiency of its management and loan approval process, the related government agencies uplifted the restriction orders that placed on the Bank’s loan approval process since 2013; as a result, on 25th August 2017, the Bank was able to re-approve loans to its customers with the amount limit of more than 200 million Baht per case, and was able to re-operate more businesses and regained its better financial At that time, IBT encountered several significant issues such position, and continuously regained more confidence and trust from as non-performing loans which caused many and very high rate of its customers and the related parties. financial cost, high burden of financings, and highly negative capital adequacy ratio in comparison to other SFIs. However, with the The improvement of the Bank’s financial position was achieved awareness of significance of being only financial institution under due to the confidence and faith in the significance of a financial the Islamic Principles and determination of the Board of Directors, institution which has provided financial services under the Islamic executives and employees to solve the Bank’s problems, the Bank’s Principles which were one of the significant mechanisms in the operation under the reorganization plan had its gradual progresses; economic and social support of the country. I truly hoped that the whereas, the management and operation of the Bank on significant Islamic Bank of Thailand (IBT) would become a secure and stable issues has continuously improved. financial institution and would be prepared to perpetually provide professional financial services under the Islamic Principles. The business contexts and operation of the Bank had been adjusted in accordance with its mission by means of approaching On behalf of the Board of Directors, executives and employees Muslim communities and launching of financial products to be in of the Bank, I hereby thanked all shareholders and customers of conformity with the demands of the target customers, human the Bank for their continuous confidence and trust in the Islamic resources development and corporate restructuring, as well as Bank of Thailand (IBT). systematic working processes, correct and transparent working standards, particularly the loan approval process with the balance of power and accountability system. Moreover, IBT has received good supports from the related government agencies and transferred the non-performing financings portfolios to the Islamic Asset Management Limited on 30th June 2017 and prepared its financial restructuring plan and recruited new venture partners to strengthen the Bank’s financial position as per the Resolution of the State Enterprise Policy Commission (SEPC). 8 Annual Report 2017 Mr. Chaiwat Uthaiwan Chairman of the Board of Directors of the Bank
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10. Message from the President The performance of duties as a director and acting President of the Islamic Bank of Thailand with significant mission of reorganization was most challenging to my past work experiences . The solution to organizational problems in 2017 was expedited to enhance the preparedness in terms of infrastructure and to strengthen the Bank’s abilities in response to challenges of speedily regaining profits of the Bank in the 1st Quarter of 2018. The said operation under the urgent and significant mission in the reorganization plan of 2017 has been complete and successful as targeted in all respects such as the strategic recovery plan and business plan which was provided with a new business model emphasizing 2 customer groups (segmentations) including Muslim segment as per the mission, and high quality corporate segment using the marginal profit strategy, and the Bank has improved the financing process to be more concise and effective under the principle of “Three Lines of Defense”, collateral management to reduce burden of cash reserves, Emergency Credit Line for liquidity risk management, and improvement of Product Programs for customer assistance under the Bank’s mission so that customers would be more accessible to the sources of capital, in which the project has been approved by the Cabinet as “PSA-Public Service Account”, etc. Regarding the operation plan of 2018, the Bank has its main goal of regaining of profits for the first time in 5 years through significant operational guidelines, i.e., acceleration of amendment of the Islamic Bank of Thailand Act to be complete in early 2018 0410 Your Company Name Annual Report 2017 so that the Ministry of Finance shall increase capital and create financial strength and enable the Bank to expand its quality loan services, then, it shall take a proactive action to launch quality and low-risk loans so that the Bank shall be able to securely increase its main incomes. Moreover, the Bank shall issue measures to solve problems of retail debts and to assist retail debtors who had their loan outstanding past-due, mostly Muslim villagers in Southern Border Provinces. The Bank shall manage to reduce operating costs continuously in proper proportion to incomes, and shall share resources and cooperate with other state-owned financial institutions, and shall strive to improve the integrity and transparency of its operation in accordance with the Best Practice Standard. With commitments of executives and all employees of the Bank, we are confident that the Bank will certainly regain its strength and profitability in 2018 for the first time in 5 years. Finally, I would like to thank all shareholders and stakeholders in the public sector and the private sector, as well as our customers, for their continuous trust, confidence and support to the Bank. We are continuously committed to regaining the status, sustainability and confidence in our operation under the Principle of Shariah and Good Governance. Mr. Vitai Ratanakorn Director and Acting President of the Bank
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12. Message from the Chairman of the Shariah Advisory Council Trading , investment, borrowing of money or property occupied by individuals and inheritance from one person to another person or several people is all involved with auspiciousness, modernity, and prosperity. At the same time, these transactions are risky to tort, fraud and exploitation among humans, and human genius at any level may not be able to control and prevent any fraud, exploitation and tort. Not only the wisdom, material modernity and technological progress but also religions and virtues shall control and prevent financial transactions from entering into the context of taking advantages and exploitation, greed, selfishness and misjudgment, therefore, we found out that the foundation of several virtues was on the Islamic basis of “Goal of Shariah”, i.e., prevention of humans from tort and exploitation of each other in 5 aspects, including lives, assets, consciousness, ancestry and preservation of virtues. Since the 17th Century when the western people had based the world’s destiny on genius, wisdom and confidence in their humanism, they left virtues behind and adhered to Greek ethical values which had nothing to do with karma, except for awareness of proper human practices. Then, the western people had driven the world’s arts, technologies, politics, economy and society by means of colonization and forced the entire human races in the world to westernization and banned the use of Shariah 12 Annual Report 2017 worldwide; as a result, at least in the past 2 centuries, the world of the entire human races had been driven in the directions of growth in the context of assets, trading and investment combining the economic prosperity with the tort and exploitation in terms of assets. Now, it is the time for challenges and enormous change. The Thai-Muslim society has applied the principle of Shariah to financial transactions through institutions such as the Islamic Bank of Thailand, which confirmed that for all customers of the Islamic Bank of Thailand, their assets and financial transactions were virtuous, and the accruals from financial transactions through services of the Islamic Bank of Thailand would be transactions without tort, fraud, exploitation but full of auspiciousness and prosperity……Inshallah. Dr. Anas Amatayakul Chairman of the Shariah Advisory Council
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14. Board of Directors Mr . Chaiwat Utaiwan 14 Mr. Niphon Hakimi General Natthipong Pueksakorn Mr. Panu Uthairat Mr.Montchai Ratanastien Annual Report 2017
15. Assoc . Prof. Pasu Decharin Miss Angkana Swasdipoon Dr. Pornchai Thiraveja Miss. Piyawan Lamkitcha Miss. Veena Tachachainirun Mr.Vitai Ratanakorn Annual Report 2017 15
16. Mr . Chaiwat Utaiwan Age : 64 iBank committee roles : Chairman of Board of Directors Education and Degrees: Master of Business Administration (Executive) Sasin Graduate Institute of Business Administration of Master Degree Chulalongkorn University Master of Science (Mathematics and Computer Science) University of Louisville, Kentucky, U.S.A. Bachelor Degree Bachelor of Science in Statistics, Faculty of Commerce and Accountancy, Chulalongkorn University Professional Experience: Director and Executive Committee CK Power Public Company Limited 2015 - Present 2014 - Present Director, Executive Committee, Corporate Governance Committee, Risk Management Committee and Managing Director TTW Public Company Limited Director and Managing Director PathumThani Water Company Limited 2014 - Present Director Thai Water Operations Company Limited 2014 - Present Chairman of Board of Directors Suvarnabhumi Airport Hotel Company Limited 2011 - Present Vice Chairman of Board of Directors Bangkok Metro Public Company Limited 2012 - 2014 Director, Executive Committee, Risk Management Committee and President 2011 - 2014 Bangkok Metro Public Company Limited Director and Executive Committee Government Saving Bank 2011 - 2012 President and Chief Executive Officer Siam City Bank Public Company Limited 2007 - 2011 Chairman of the Executive Board and President AIG Retail Bank Public Company Limited 2001 - 2007 President and Chief Executive Officer AIG Finance (Thailand) Public Company Limited *Holding of state enterprise/company shares related to Islamic Bank of Thailand shall not be over 10% of ordinary shares during 2017 Accounting Year 16 Annual Report 2017
17. Mr . Niphon Hakimi Age : 61 iBank committee roles : Board of Directors Chairman of Executive Committee Chairman of Compliance Committee Bank manager performance appraisal Committee Member Chairman of Nomination Committee (From April 12, 2017- Present) Zakat Committee Member Education and Degrees: D.S.U Labor Law from University of Paris II in France D.S.U Criminology from University of Paris II in France D.E.A. Sociology of Civil Law from University of Paris II in France Bachelor’s degree in Law from Thammasat University Professional Experience: 2011 - Present Deputy Secretary-General, Office of the Council of State Executive, Higher Level) Permanent Law Councillor, Office of the Council of State Member of Administrative Procedure Committee Member of Tourism Authority of Thailand Committee Board of Directors of Nok Airlines PCL Member of Life Insurance Fund Committee Member of Burapha University Council Member of Fuel Oils Control Commission Member of Good Governance and Appeal Committee (Bank of Thailand) Member of Punishment Deliberation Committee (ANTI-DOPING IN SPORTS ACT, B.E. 2555 (A.D. 2012)) *Holding of state enterprise/company shares related to Islamic Bank of Thailand shall not be over 10% of ordinary shares during 2017 Accounting Year General Natthipong Pueksakorn Age : 59 iBank committee roles : Board of Directors Chairman of Audit Committee Chairman of Nomination Remuneration and Performance Appraisal Committee CG & CSR Committee Member Education and Degrees: Master Degree Master’s degree in Computer Science of National Institute of Development Administration (NIDA) Bachelor Degree Bachelor of Engineering, Chulachomklao Royal Military Academy Professional Experience: 2015 - Present Senior Expert Royal Thai Army 2014 - Present Chairman of Directors, Amanah Leasing Public Company Limited 2013 - 2015 Chief of Finance, Royal Thai Army 2011- 2012 Director of Directorate Comptroller, the First Army Area *Holding of state enterprise/company shares related to Islamic Bank of Thailand shall not be over 10% Of ordinary shares during 2017 Accounting Year Annual Report 2017 17
18. Mr . Panu Uthairat Age : 61 iBank committee roles : Board of Directors Chairman of Bank manager performance appraisal Committee Chairman of CG & CSR Committee Audit Committee Member Education and Degrees: Master degree Master degree in Public Administration from National Institute of Development Administration (NIDA) Bachelor Degree Bachelor’s degree in Political Sciences from Thammasat University Professional Experience: 2015 - Present Government’s special representatives 2014 - Present Member of the National Legislative Assembly 2014 - 2015 Secretary-General of Southern Border Provinces (Civil Official, Level 11) 2014 Chief of Inspector Ministry of Interior 2013 Deputy Permanent Secretary, Special Affairs 2012 Advisor to the Prime Minister (Civil Official, Level 11) 2011 Secretary-General of Southern Border Provinces (Civil Official, Level 11) 2010 - 2011 Deputy Permanent Secretary, Acting Secretary-General of Southern Border Provinces *Holding of state enterprise/company shares related to Islamic Bank of Thailand shall not be over 10% of ordinary shares during 2017 Accounting Year Mr. Montchai Ratanastien Age : 63 iBank committee roles : Board of Directors Chairman of Risk Management Committee (From August 25, 2016 - April 11, 2017 and December 19, 2017 - Present) Chairman of Labor Relations Committee Vice Chairman of Executive Committee Corporate Governance (CG) & Corporate Social Responsibility (CSR) Committee Member Compliance Committee Member Nomination Committee Education and Degrees: Master Degree Master of Public Administration Program in Public and Private Management from National Institute of Development Administration (NIDA) Bachelor Degree Bachelor’s degree in Bachelor of Accountancy Program in Cost Accounting from Chulalongkorn University Professional Experience: 2014 - Present Director, Amanah Leasing PLC 2013 - 2014 Director, Planning and Development, Supervision Group, Bank of Thailand 2011 - 2012 Director, On-Site Examination Department 2, Supervision Group, Bank of Thailand *Holding of state enterprise/company shares related to Islamic Bank of Thailand shall not be over 10% of ordinary shares during 2017 Accounting Year 18 Annual Report 2017
19. Assoc . Prof. Pasu Decharin Age : 49 iBank committee roles : Board of Directors Audit Committee Member Nomination Remuneration and Performance Appraisal Committee Member CG & CSR Committee Member Nomination and Secretary Committee Member Education and Degrees: Doctor of Philosophy (Management of Technology), School of Management, Asian Institute of Technology Master of Business Administration (General Management) University of Colorado (Boulder) Bachelor of Business Administration (Management), Chulalongkorn University Professional Experience: 2011 - Present Dean, Faculty of Commerce and Accountancy, Chulalongkorn University, 2012 - Present Executive Board, Faculty of Commerce and Accountancy Alumni, 2012 - Present Executive Board, Personnel Administration Committee, Chulalongkorn University, 2012 - Present Executive Board, Association of Asia-Pacific Business School (AAPBS), *Holding of state enterprise/company shares related to Islamic Bank of Thailand shall not be over 10% of ordinary shares during 2017 Accounting Year Miss Angkana Swasdipoon Age : 62 iBank committee roles: Board of Directors Executive Committee Member Risk Management Committee Member Bank manager performance appraisal Committee Member Education and Degrees: Post Graduate Diploma in Economics, University of York, United Kingdom Bachelor of Economics, first class honors, gold medal, Chulalongkorn University Professional Experience: Advisor, Thanachart Bank Public Company Limited Director and Chairperson of the Audit Committee, Thanachart Fund Management Company Limited Chairperson, Security SCIB Services Company Limited Executive Vice President, Thanachart Bank Public Company Limited Liquidator, SCIB Public Company Limited First Executive Vice President, Siam City Bank Public Company Limited Director, Siam City Life Assurance Company Limited Chairperson of the Executive Committee, Siam City Securities Company Limited Vice President, Asset Management Department, Bangkok Commercial Asset Management Company Limited Vice President, Planning and Development Office, IFCT Finance and Securities Public Company Limited Administrative Manager, Thai Rating and Information Services (TRIS) Manager of Information Services Center, Industrial Finance Corporation of Thailand *Holding of state enterprise/company shares related to Islamic Bank of Thailand shall not be over 10% of ordinary shares during 2017 Accounting Year Annual Report 2017 19
20. Dr . Pornchai Thiraveja Age : 49 iBank committee roles : Board of Directors Chairman of Risk Management Committee (From April 12,2017 December 4,2017) Education and Degrees: 1989 BBA in accounting , Thammasat University. 1993 M.B.A. (Finance) , College of Notre Dame , U.S.A. 2003 M.A. (Political Science) , Thammasat University. 2006 Ph.D. in Public Administration , Suan Dusit Rajabhat University. 2012 Ph.D. in Education (Non-formal Education) , Chulalongkorn University Professional Experience: 2017 - Present Financial Policy Advisor,Fiscal Policy Office 2015 - 2017 Deputy Director General, Fiscal Policy Office 2013 - 2015 Executive Director, Bureau of Financial System and Financial Institutions Policy (Executive Director (Economics)) 2012 - 2013 Executive Director, Bureau of Fiscal Policy (Executive Director (Economics)) 2011 - 2012 Acting Executive Director, Bureau of Financial Inclusion Policy and Development *Holding of state enterprise/company shares related to Islamic Bank of Thailand shall not be over 10% of ordinary shares during 2017 Accounting Year Miss. Piyawan Lamkitcha Age : 52 iBank committee roles : Board of Directors Vice Chairman of Nomination Committee Executive Committee Member Nomination Remuneration and Performance Appraisal Committee Member Compliance Committee Member Bank manager performance appraisal Committee Member Education and Degrees: Master Degree Master’s degree in Public Administration from Chulalongkorn University Mini MBA from Thammasat University Bachelor Degree Bachelor’s degree in Finance from university of the Thai Chamber of Commerce Professional Experience: 2016 - Present Deputy Director General State Enterprise Policy Office, Ministry of Finance 2012 - 2016 Director, Government Securities Management Office, State Enterprise Policy Office, Ministry of Finance 2013 - 2014 Member of Board of Directors, Dhanarak Asset Development Co.,Ltd 2010 - 2012 Analyst Senior Professional Level State Enterprise Policy Office, Ministry of Finance *Holding of state enterprise/company shares related to Islamic Bank of Thailand shall not be over 10% of ordinary shares during 2017 Accounting Year 20 Annual Report 2017
21. Miss . Veena Tachachainirun Age : 52 iBank committee roles: Director and Acting President (June 1, 2016 – September 30, 2017) Education and Degrees: Master Degree MBA (International Program), Bangkok University Bachelor Degree B.A. (Accounting), Thammasat University Professional Experience: 2016 - 2017 Director and Acting President, Islamic Bank of Thailand 2014 - 2016 Chairman’s Advisor, Islamic Bank of Thailand 2014 - 2014 Senior Executive Vice President, Thai Industry and Engineering Service Public Company Limited 2012 - 2014 Executive Vice President, Bangkok Metro Public Company Limited 2011 - 2012 Senior Vice President, CFO Office, Thanachart Bank Public Company Limited 2003 - 2011 Senior Vice President, Planning and Budgeting Department, Siam City Bank Public Company Limited *Holding of state enterprise/company shares related to Islamic Bank of Thailand shall not be over 10% of ordinary shares during 2017 Accounting Year Age : 47 iBank committee roles: Board of Directors Director and Acting President (October 1,2017 - Present) Education and Degrees: Master Degree Master of Arts (Political Economy), Chulalongkorn University Master of Laws (Business Law), Chulalongkorn University Master of Finance, Drexel University, U.S.A Bachelor Degree Bachelor of Economics, Thammasat University Professional Experience: 2016 - Present Qualified Member Commissioner for Economic Affairs ,the Digital Economy Mr.Vitai Ratanakorn Promotion Agency 2016 - 2017 Director, Thanachart Fund Management,Co.,Ltd. 2016 - Present Senior Executive Vice President Investment and Financial Management Group 2015 - 2016 Senior Executive Vice President Business and Public Sector Customers Group 2011 - 2014 Chief Financial Officer, Nok Airlines Co., Ltd 2010 - 2011 Senior Deputy Managing Director, Charoen Pokphand Foods Public Company Limited Senior Director, Alternative Investment Office (Special Investment 2003 - 2010 Department), Government Pension Fund 2007 - 2010 Director, Siam City Asset Management Co., Ltd. *Holding of state enterprise/company shares related to Islamic Bank of Thailand shall not be over 10% of ordinary shares during 2017 Accounting Year Annual Report 2017 21
22. Shariah Advisory Council Dr . Anas Amatayakul Dr. Maroning Salaeming Mr. Senee Yoopensuk 22 Annual Report 2017 Mr. Pramote Meesuwan Mr. Santi Suasaming
23. Dr . Anas Amatayakul Chairman of the Shariah Advisory Council Age: 59 Education and Degrees Ph.D.in Arabic Language and Literature, Aligarh Muslim University Aligarh, India M.Phil. in Arabic Language and Literature, Aligarh Muslim University Aligarh, India M.A. in Arabic Language and Literature, Aligarh Muslim University Aligarh, India B.A. in Islamic Studies (Islamic Laws and Arabic Language) Nadwa College, Lucknow, India Professional Experience Lecturer, Department of Humanities, Faculty of Social Sciences and Humanities, Mahidol University Member of Editorial Board for Making Religious Nomenclature Dictionary Office of the Royal Society Member of Subcommittee to consider qualifications of overseas graduates, Office of Higher Education Commission Member of Advisory Council for the World Assembly of Muslim Youth - Thailand Member of Subcommittee working on strategies aimed at driving overseas Thai Muslim education Member of Executive Committee, Muslim Study Center, Institute of Asian Studies, Chulalongkorn University Member of Executive Committee, Center for Muslim, Faculty of Economics, Chulalongkorn University Chairman of Phillip Shariah Committee, Phillip Life Assurance PLC. Chairman of the Shariah Advisory Council Annual Report 2017 23
24. Age : 51 Education and Degrees Ph.D. in Principles of Jurisprudence, Islamic University of Madina, Saudi Arabia M.A. in Principles of Jurisprudence, Islamic University of Madina, Saudi Arabia B.A. in Islamic Law, Islamic University of Madina, Saudi Arabia Working experience Lecturer of Islamic law, College of Islamic Studies, Prince of Songkhla University, Pattani Campus Director of Islamic Law Academicians of Southeast Asian Region Dr. Maroning Salaeming Licensee of Udomsarn Wittaya School, Mueng District, Yala Member of the Shariah Expert for Seikhul Islam Office Advisory Council Member of Shariah Advisory Committee, Bina Islamic Cooperative, Ltd. Deputy Secretary - General of Southern Provinces Administration Center with responsibility on developing five southern border provinces Chairman of Shariah Advisory Committee (Shariah Board), Dhipaya Insurance Ltd. Advisor to Foreign Affair Department, The Central Islamic Council of Thailand Research and academic journals on various topics, such as the mediation on family disputes and heritage in compliance with Islamic laws in the southern border provinces, the development of system and efficiency of the mediation on family disputes and heritage in compliance with Islamic laws in the southern border provinces, Shariah principles for financial transactions in the seminar on “Shariah and financial innovations”, the insurance in compliance with Islamic law, and the Shariah - applied investment in Thailand Member of the Shariah Advisory Council Age: 53 Education and Degrees B.A. in Islamic Propagation, Al-Azhar University, Cairo, Egypt M.A. in Islamic Studies for Development, Bangkokthonburi University, Bangkok, Thailand Working experience Imam Badrulmumineen Masjid (Sala Loi), Vadhana District, Bangkok Religious and Arabic teacher of senior high school level, Miftah EI Uloom EI Deneyah School Mr. Pramote Meesuwan (Ban Don) Chairman of the Board of Director, Pre-school Child Development Center, Sala Loi Community, Member of the Shariah Advisory Council Bangkok Guest Speaker on religious topics for radio programs on AM 1251 and AM 981 stations Guest Speaker on religious topics for Visaidham Parithas, Kasetsat University Radio Station AM 1107 every Sunday Guest Speaker at religious instructions and organizations and at Friday prayer Advisor to Executive Committee, Alumni Association of Miftah EI Uloom EI Deneyah School Member of the Shariah Advisory Council Writer of academic textbooks : • “Key to Arabic Language”, a key to understand Arabic language as it contains part of Arabic grammar and more than 4,500 Arabic words. • “Dua..the brain of Ibadah”, one of the most complete book of Dua (supplication) with translation used in several occasions. • “Arabic - English - Thai Dictionary”, which contains more than 30,000 words including conversation dialogues in three languages. 24 Annual Report 2017
25. Age : 46 Education and Degrees Working experience Age: 46 Education and Degrees Working experience M.A. in Arabic Linguistics and Literatures, Aligarh Muslim University, India B.A. in Al - Hadith and Islamic Studies, Abu Bakr University, Karachi, Pakistan Headmaster, Khunathamwithaya School, Chacheongsao Province Committee member of Non - formal Education, Donchimplee Sub - district, Bangnampriew, Chacheongsao Province Mr. Senee Yoopensuk Committee member of Islamic Studies lesson development of Rajabhat Phranakorn University Guest speaker at religious schools Member of the Shariah Advisory Council TMTV Academician at Thai - Muslim TV Station (TMTV) Advisor to Phillip Shariah Committee, Phillip Life Assurance PLC. Member of Committee to set up the Islamic insurance system, Siam Samsung Takaful Co. Ltd. Secretary of the Islamic Center Committee of Thailand , International department. Guest speaker on religious issues for the TV station, website and ratio of Muslim Foundation (24 - hour TV Muslim) Advisor of Parent - Student Club of a religious school Independent researcher on the Middle East (Politics and Economy), Institute of Asian Studies, Chulalongkorn University (2011 - 2001) Shariah advisor, Krungthai Asset Management PLC. (Islamic Fund) Advisory Committee for Krungthai Shariah Funds Member of the Shariah Advisory Council Higher Secondary School, College of International Student, Al-Azhar University, Cairo, Egypt B.A. in Islamic Theology (Al-Hadith), Al-Azhar University, Cairo, Egypt Certificate of Advance Islamic Studies, Samalik Institute, Ministry of Education of Egypt, Cairo, Egypt Headmaster, Majlisuddeenee School, Suanluang, Bangkok Chairman, Academic Section, Association of Islamic Teaching Schools (Sanawi Schools) Mr. Santi Suasaming Editor, Committee of Arab Student Alumni Association, (2546 B.E.) Member of the Shariah Member, Primary Education Curriculum Improvement Committee, Kurusampan Association. Advisory Council Member, Primary Islamic Education Textbook Compiling Committee. Advisor, Committee of Muslim Organization of Thailand (CMOT). Khatib (Preacher), Nurul Islam Masjid, Banpa, Suanluang, Bangkok Chairman, Jularachamontri Expert Sub-Committee. Jularachamontri Working Committee, Sheikul Islam Office. Committee, The World Organization for al-Azhar Graduates , Thailand Branch. Speaker, Television Programs (i.e. Sheikul Islam Office, Salam Ramadhan) Speaker, Radio Programs for Muslim (i.e. Vioce form Majlis, Muslim Broadcasting Assembly of Thailand, Al-Yuman Islam Office, Muslim Association of Al-Quran Reader of Thailand, Muslim Mass Media Association of Thailand and Islamic Center of Thailand) Committee, Summary Writing on Islamic Expert Seminar, National Legislative Assembly. Speaker, Southern Border Provinces Administration Centre/Internal Security Operations Command. Books/Articles on website, www.alisuasaming.com Annual Report 2017 25
26. Top Executives Mr .Vitai Ratanakorn Mr.Visut Boreriboon Ms.Sunsanee Methisariyapong 26 Annual Report 2017 Mr.Praparn Arya Mr.Manoch Dangkomen Ms.Asra Angkaria Pol.Capt.Poomin Peongsujarit Mr.Arpichad Akdhakura
27. Mr .Vitai Ratanakorn Director and Acting President (October 1, 2017 - Present) Age 47 Education and Degrees: Master Degree Bachelor Degree Master of Arts (Political Economy), Chulalongkorn University Master of Laws (Business Law), Chulalongkorn University Master of Finance, Drexel University, U.S.A Bachelor of Economics, Thammasat University Professional Experience: 2016 - Present Qualified Member Commissioner for Economic Affairs, the Digital Economy Promotion Agency Director, Thanachart Fund Management Co.,Ltd. 2016 - 2017 Senior Executive Vice President Investment and Financial Management Group Government 2016 - Present Savings Bank Senior Executive Vice President Business and Public Sector Customers Group 2015 - 2016 Chief Financial Officer, Nok Airlines Co., Ltd 2011 - 2014 Senior Deputy Managing Director, Charoen Pokphand Foods Public Company Limited 2010 - 2011 Senior Director, Alternative Investment Office (Special Investment Department), 2003 - 2010 Government Pension Fund Director, Siam City Asset Management Co., Ltd. 2007 - 2010 Annual Report 2017 27
28. Age 54 Education and Degrees Master Degree Master of Public Administation National Institute of Development Administration Bachelor Degree Bachelor of Economic (Finance and Banking) Ramkhamhaeng University Professional Experience Chairman Advisor, Islamic Bank Of Thailand 2014 - 2017 Executive Vice President Marketing Group, Bangkok Metro Public Company Mr.Visut Boreriboon 2012 - 2014 Limited Retail Banking Division 2011 - 2012 Senior Vice President, Head of Field Operation & Support, Thanachart Bank and Acting Executive Vice President Public Company Limited Social and Economic Development Group Age 59 Education and Degrees Bachelor Degree Bachelor of Business and Administration Major : Finance and Banking Ramkamhaeng University Professional Experience 2015 - Present Executive Vice President SMEs Banking Group Mr.Praparn Arya 2012 - 2014 Senior Vice President SMEs Credit 1 Department Executive Vice President 2010 - 2011 Vice President SMEs Credit Department and Acting Executive Vice President SMEs Banking Group 28 Annual Report 2017
29. Age 58 years Education and Degrees Master Degree Master of Business Administration Chiangmai University Master of Science (Imformation Technology) King Mongkut’s University of Technology Thongburi Bachelor Degree Accounting Major Ramkhamhaeng University Angkaria Ms.Asra Professional Experience Vice President Islamic Bank Of Thailand Executive Technology and Electronic 2015 - Present Executive Vice President, Technology and Electronic Operations Group Operation Group 2013 - 2017 Executive Vice President, Economic and Social Development Group 2013 - 2013 Executive Vice President, Retail Business Group 2013 - 2013 Executive Vice President, Credit Operation Group 2012 - 2013 Executive Vice President, Deposit and Fee Business Group 2011 - 2012 Executive Vice President, Deposit and Electronic Business Group 2010 - 2011 Executive Vice President, Electronic Business Group 2010 - 2010 Executive Vice President, Sales Support Division 2009 - 2010 Senior Vice President, Operations Department Age 54 Education and Degrees: Master Degree M.B.A. (Finance) Oklahoma City University, USA Bachelor Degree B.A. (Accounting) Thammasat University B.A. (Law) Sukhothai Thammathirat University Professional Experience Ms.Sunsanee Islamic Bank Of Thailand Methisariyapong 2017 - Present Executive Vice President Finance Group Executive Vice President 2016 - 2017 SVP Treasury Department Acting Executive Vice President Finance Group Finance Group 2012 - 2016 SVP Treasury Department 2009 - 2012 VP Treasury Department 2008 - 2009 DVP Treasury Department 2005 - 2008 DVP Corporate Finance Department Secondary Mortgage Corporation 2001 - 2005 Deputy manager business department Thanachart Bank 2003 - 2001 Manager Corporate division Krungthaitanakit Finance & Security public Company 1994 - 1999 Deputy manager Corporate division Ekachart Finance & Security public Company 1992 - 1994 Senior officer Corporate division Annual Report 2017 29
30. Age 54 Education and Degrees : Master Degree MBA in Financial Management, Ramkamheang University Bachelor Degree Faculty of Law, Sukothai Thamathirat University BBA - Faculty of Commerce and Accountancy, Thammasat University Guide Certificate, Chulalongkorn University Mr.Manoch Dangkomen Executive President Viceand Administration Human Professional Experience 2015 - Present Executive Vice President Administration and Human Resource Group Resource Group Acting Vice President Human Resource Management Dept., Islamic Bank of Thailand 2013 - 2015 Senior Vice President, Head of Foreign Business Dept. Acting Vice President Human Resource Management Department Islamic Bank of Thailand 2010 - 2013 Senior Vice President, Head of Foreign Business Dept, Islamic Bank of Thailand 2009 - 2010 Vice President, Head of Foreign Business Dept, Islamic Bank of Thailand 2005 - 2009 Vice President, Head of Trade Finance Marketing Corporate & SME Business, Thai Military Bank PCL, 2000 - 2005 AVP Risk Manager, Citibusiness CTB and Citicorp Leasing, Citigroup Inc., 1999 - 2000 Senior Team Leader Corporate Dept., The Siam Commercial Bank PCL. 1997 - 1999 Vice President & General Manager, Bombay Branch, The Siam Commercial Bank PCL. Age 43 Education and Degrees: Master Degree M.B.A. Kasetsart University M.A (Political Science) Ramkhamhaeng University Bachelor Degree B.Eng. (Industrial) Kasetsart University Professional Experience: Pol.Capt.Poomin 2013 - Present Executive Vice President ,Islamic Bank of Thailand. Peongsujarit 2012 2011 Executive Vice President 30 Annual Report 2017 Senior Vice President Compliance Department , Islamic Bank of Thailand. Vice President Compliance Department , Islamic Bank of Thailand.
31. Age 46 Education and Degrees Master Degree MBA Cleveland State University , Ohio, USA Bachelor Degree BBA Assumption University Professional Experience Mr.Arpichad Akdhakura 2017 - present Executive Vice President Retail Banking Group, Islamic Bank Of hailand Senior Vice President, Krungthai Bank Public Company Limited 2011 - 2015 Executive Vice President Retail Group Senior Vice President, Siam City Bank Public Company Limited 2000 - 2011 1998 - 2000 Manager, Bangkok commercial asset management Public Company Limited Executive Officer, Bangkok Bank of Commerce Public Company Limited 1996 - 1998 Specialist Officer, Industrial Finance Corporation of Thailand (IFCT) 1994 - 1999 Officer, Thaimex finance and securities Public Company Limited 1991 Annual Report 2017 31
32. Organization Structure of Islamic Bank of Thailand Board of Directors Risk Management Committee Risk Management Department Credit Risk Management Department Audit Committee Internal Audit Department President Management Support Group Company Secretary Department Communication and Corporate Image Department Corporate Strategy Department Shariah Department Anti Fraud Office Retail Banking Division Corporate and SMEs Banking Division Retail Banking Group Business Banking Group 1 Retail Financing Department Retail Financing Project Department Alliance Business Management Department Retail Business Analysis Department Shariah Product Department Government Policy Department Hajj and Umrah Department Business Department 1 Business Department 2 Business Banking Group 2 Business Department 3 Business Department 4 Branch Banking Group Branch Administration Department 1 Branch Administration Department 2 Deposit and Fee Department Social Economic Development in 5 Southern Provinces Department 32 Annual Report 2017 Business Banking Group 3 Business Department 5 Business Department 6
33. Shariah Advisory Board Executive Committee Other Committees Compliance Committee Compliance and Review Group Administration and Human Resource Group Human Resource Management Department Human Resource Development Department Administrative Department Procurement Department Compliance and Rules Department Credit Review Department Sustainable Organization Development Office Credit Management Division Business Support Division Debt Restructuring and Legal Group Finance Group Collection & Debt Restructuring Department Legal Department Micro Finance Department Accounting Department Finance Department Treasury Department Credit Operation Group Credit Operations Department Credit Contract Operations Department Credit Operations Support Department Collateral Appraisal Department International Business Operations Department Technology and Electronic Operation Group IT Development and Management Department IT Operation and Service Department Cheque Collection and MoneyTransfer Department Annual Report 2017 33
34. Industry Review and Trend Overall Industry Review in 2017 and Trends in 2018 In 2017 , the Thai economy has improved continuously and would expectedly expand at 3.9%, increased from 3.2% in 2016 from export of goods and services which expanded at 9.3% from 0.1% in 2017 which was in conformity with the economic expansion of trading partner countries and the global trading volume. The consumption in the private sector has expanded at the same level to those in the previous year, with the supporting factors from the increasing purchasing powers from high-income households outside the agricultural sector, but household income in the agricultural sector was partly affected by the shrinking prices of agricultural goods at the end of the year, and household debts were still at a high level; as a result, the overall consumption has not much expanded. Meanwhile, investment in the private sector has improved from those in the previous year in conformity with the expansion of export of goods, and the confidence of operators has improved. However, investment in the public sector has slowed down when compared to those in the previous year due to the delay in some projects which had limitations on the withdrawal efficiency, problems of area access, and heavy rains. 34 Annual Report 2017 In 2018, the Thai economy will likely expand continuously at 3.9% which will be equivalent to those in 2017 (source: BOT), and it is expected that the Thai economy will receive the supporting factors from export of goods and services which clearly will expand in accordance with the economic condition of trading partner countries, and the tourism sector is expected to expand continuously, and the export sector would expand at 4.0%. Meanwhile, investment in the public sector would expand at 9.0% from 0.9% in 2017 as per the expedition of investment in infrastructure which would be a supporting factor for investment in the private sector to expand from 1.6% in 2017 to 2.3%. Consumption in the private sector would gradually expand at the same level to those in 2017 because there are risk factors from changes in the economic structure to the increasing use of automation technology in some industries, and with labor mobility movement from the industrial sector to the service sector which has lower productivity and remunerations, and the household debt burdens are still at a high level. Significant risk factors in 2018 included 1) uncertain international trade policy of the United States; 2) geopolitical risks; and 3) purchasing power which was not properly distributed.
35. Economic Expansion Rates % p.a. 2016 2017* 2018* Overall Thai economy 3.2 3.9 3.9 Consumption in the private sector 3.1 3.1 3.1 Investment in the private sector 0.4 1.6 2.3 Consumption in the public sector 1.7 1.5 3.2 Investment in the public sector 9.9 0.9 9.0 Export value 0.1 9.3 4.0 Import value -5.4 14.0 7.5 General inflation rates 0.2 0.7 1.1 Source: The Bank of Thailand (December 2017) Note: *Estimated figures Business Review and Competition of Commercial Banks in 2017 In 2017, Thailand’s commercial bank business has improved from the previous year in accordance with the economic recovery. Credit facilities in the commercial banking system expanded at 4.4% (from 2.0% in the previous year), with main supporting factors including 1) business credit (equal to 67% of the total credit which expanded at 3.6% from 0.6% in 2016 because SME business credit section (not including financial business) expanded at 5.7% as per the business recovery in the commercial sector, real estate business and industrial business sector; and 2) consumption credit (equal to 33% of the total credit which expanded at 6.1% from 4.9% in 2016 as per car loan facilities which expanded at 8.4% after the end of 5-year period of car possession under the First Car Ownership Measures were introduced. However, the overall expansion of the commercial bank business still had limitations because the corporate credit facilities depended on the option of fund raising through stocks and debt instruments and debt repayment; meanwhile, residential loans and credit card loans slightly slowed down. Regarding non-performing loans (NPS) at the end of 2017, there were outstanding balances of 429 billion Baht or increased by 43.4 billion Baht from those in the previous year or equal to 2.91% (increased from 2.83% of the total credit facilities in the previous year) resulting from additional provisions of commercial banks for credit facilities of potentially lower quality, as well as gearing for IFRS 9. As a result, the commercial banking system had additional provisions from those in the previous year by 72.7 billion Baht to 602 billion Baht, and the proportion of reserves to provisions increased to 171.9%. In 2017, the operating results of the commercial banking system had the net profits of 187.3 billion Baht or decreased by 199 billion Baht from those in the previous year, resulting from additional provisions and gearing for IFRS 9 which would be promulgated in 2019. As a result, the average return-on-asset (ROA) decreased to 1.05% from 1.13% in the previous year. Meanwhile, the net interest margin (NIM) remained unchanged at 2.76%. However, the operating profits increased from deposits portfolio management by emphasizing the increase of current and saving accounts (CASA) which resulted in the lower cost of deposits. In 2018, the commercial banking business will expand in conformity with the continuous economic recovery. Main supporting factors are investment in the private sector which should expand well as per the expedition of investment in infrastructure of the public sector. In addition, there are significant factors, i.e., household debts which are still at a high level and the limited expansion of consumption in the private sector from changes in the economic structure to the increasing use of automation technology in some industries, and with labor mobility movement from the industrial sector to the service sector which has lower productivity and remunerations. These factors may have impact on the expansion of the commercial banking business in 2018. Annual Report 2017 35
36. Operating Result of 2017 and Operation Plan in 2018 Report on the Operating Result Analysis and Financial Position Performance as per the Business Operation Plan In 2017 , the rehabilitation process under the framework approved by the State Enterprise Policy Commission (SEPC) and the Ministry of Finance had gradual progress, particularly solutions to non-performing financing (NPF); whereas, non-performing assets which did not belong to the Muslim Segment were transferred to Islamic Bank Asset Management Limited (IAM) completely on 30th June 2017. As a result, the proportion of NPF to the total credit facility has decreased significantly. In addition to the transfer of such non-performing assets, the Bank has carried out the urgent and significant mission relating to the rehabilitation in order to build up stronger foundation for the organization by preparing the strategic recovery plan and business plan under New Business Model, emphasizing 2 segments including Muslim Segment under the Mission, and High Quality Corporate Segment, and using marginal profit strategy. The Bank also improved the credit process to be more concise and efficient in order to increase the competitiveness. The Bank also had securities management to reduce burdens of provisions of credit, opening of credit limit with other specialized financial institutions 36 Annual Report 2017 for use in the liquidity risk management and improvement of credit products in order to emphasize the credit expansion and assistance to customers under the Bank’s mission to enable them to conveniently and thoroughly access the sources of capital, which was approved by the Cabinet as Public Service Account (PSA). The problem-solving of IT Data Center shall be in accordance with the standard prescribed by the Compliance Unit and the restructuring of the organization to be able to properly support the expedition of business expansion in 2017. According to the said actions, the Bank’s status has continuously been improved. As of 31st December 2017, Islamic Bank of Thailand had the total assets of 71,703 million Baht and the net loss of 2,926 million Baht, decreased by 598 million Baht or decreased by 17% from the total loss of 3,524 million Baht at the end of 2016, mostly resulting from the Bank’s attempts to solve problems of NPF. As a result, the provisions of net bad debts and doubtful accounts decreased from those in 2016 amounted to 915 million Baht, including the management of financial expenses which decreased by 385 million Baht.
37. Unit : Million Baht Operating Result 2017 2016 Financial income Other incomes Total Incomes Financial expenses Operating expenses Total Expenses Operating profits (losses) Bad debts and doubtful accounts 2,990 304 3,294 1,676 2,346 4,022 (727) 2,199* 3,783 325 4,108 2,061 2,457 4,518 (410) 3,114 Net profits (losses) (2,926) (3,524) Change (YoY) Increased % (Decreased) (793) (21%) (21) (6%) (814) (20%) (385) (19%) (111) (5%) (496) (11%) (317) 77% (915) (29%) (598) (17%) Note: *Net bad debts and doubtful accounts, including provisions with qualitative classification, amounted to 2,077 million Baht. Annual Report 2017 37
38. Significant particulars in Income Statements : 1. Net Financial Income Unit: Million Baht 2017 Change (YoY) 2016 Increased (Decreased) % Financial income Other incomes 2,990 304 3,783 325 (793) (21) (21%) (6%) Total Incomes 3,294 4,108 (814) (20%) In 2017, the Bank had the total income of 3,294 million Baht, decreased by 20% or equal to 814 million Baht, resulting from the Bank’s failure to expand the credit facilities as targeted. According to the economic condition and stricter credit facility release, and during the initial period of the year, the Bank had limitations relating to the expansion of credit facility per case per group with the limit of exceeding 200 million Baht, which was the requirements of the Ministry of Finance since 2013; as a result, customers were unable to apply for additional credit facilities exceeding the prescribed criteria, and the growth of the Bank’s credit facilities could not promptly compensate the debt repayment of key accounts, and the Bank’s capital could not return to the normal situation, and the Bank must be careful in the liquidity management. However, according to the previous improvement of risk management and credit facilitation system, newly approved credit facilities were of higher quality, and the Ministry of Finance and the Bank of Thailand improved the criteria for supervision of single lending limit of the Bank to enable the Bank to approve credit facilities per case per group with the limit of exceeding 200 million Baht and was published in the Government Gazette on 25th August 2017; as a result, the expansion of credit facilities tended to improve gradually. 2. Net Income from Fees and Services Unit: Million Baht 2017 Change (YoY) 2016 Increased (Decreased) % Income from fees and services Expenses of fees and services 187 30 160 30 27 0.1 17% (0.5%) Net income from fees and services 157 129 27 21% Note: The above income from fees and services shall not include fees for receipt of penalties. In 2017, the Bank had fees for receipt of penalties totally 58 million Baht. In 2017, the Bank had net income from fees and services (not including fees for receipt of penalties) totally 157 million Baht, increased by 21% YOY or equal to 27 million Baht, partly resulting from the increase of Takaful fees that the Bank received cooperation from employees and good feedback from the Bank’s customers under the implementation of Takaful Project. The Bank was successful in increasing its income from Takaful fees exceeding the target; meanwhile, other fees such as fees for receipt of penalties, credit service fees and money transfer fees have also increased from those in the previous year. 3.Total Operating Expenses Unit: Million Baht 2017 38 2016 Change (YoY) Increased (Decreased) % Financial expenses - Money remitted to the Specialized Financial Institutions Development Fund; Operating expenses 1,676 227 2,061 180 (385) 47 (19%) 26% 2,346 2,457 (111) (5%) Total expenses 4,022 4,518 (496) (11%) Annual Report 2017
39. In 2017 , the Bank had the total expense of 4,022 million Baht, decreased by 11% YOY or equal to 496 million Baht, resulting from effective management of expenses. In particular, financial expenses decreased by 19% or equal to 385 million Baht, resulting from the Bank’s attempts to manage the deposit rate of return to be at a proper level, and to manage the liquidity to be in conformity with the credit demands in each period of time, including the management of deposit rate of return in key account groups, and emphasis on the expansion of current account/savings account deposit (CASA), and the proportions of CASA gradually increased from approximately 21.53% in 2016 to 22.65% in 2017. Meanwhile, the operating expenses in 2017 decreased by 5% YOY or equal to 111 million Baht. 4. Bad debts and doubtful accounts Unit: Million Baht 2017 Net bad debts and doubtful accounts 2,199 Change (YoY) 2016 Increased (Decreased) 3,114 % (29%) (915) In 2017, the Bank had its net bad debts and doubtful accounts of totally 2,199 million Baht, decreased by 29% YOY or equal to 915 million Baht, resulting from expedition of solution to NPF problems. In addition, the management of securities reduced the Bank’s burden on provisions. However, for the operational awareness, the Bank had qualitative classification of some debtors who might be affected by the economic condition, and provisions increased from the qualitative classification amounted to 2,077 million Baht. Significant particulars in balance sheets: Financial Position Unit: Million Baht 2017 Change (YoY) 2016 Increased (Decreased) Total assets 71,703 81,687 (9,984) % (12%) Credit amount Promissory notes and accrued income from the transfer of non-performing assets Total liabilities 44,166 93,496 (49,330) (53%) 22,816 - 22,816 100% 91,714 98,764 (7,050) (7%) Deposits (including financial institutions) 87,277 95,693 (8,416) (9%) Owners’ equities (20,012) (17,077) (2,935) (17%) Total liabilities and owners’ equities 71,703 81,687 (9,984) (12%) At the end of 2017, the Bank had the total assets of 71,703 million Baht, decreased by 12% YOY or equal to 9,984 million Baht, resulting from the transfer of non-performing assets, not including Muslim Segment, to Islamic Bank Asset Management Limited (IAM) amounted to 49,076 million Baht, and the Bank was compensated with promissory notes amounted to 22,606 million Baht. Annual Report 2017 39
40. Significant particulars in statements of financial position : Credit At the end of 2017, the Bank had the total credit of 44,166 million Baht (not including institutional credit amounts) decreased by 53% YOY or equal to 49,330 million Baht, mainly resulting from the transfer of non-performing assets to Islamic Bank Asset Management Limited (IAM). However, if not taking account of results from the transfer of non-performing assets, the expansion of credit facilities in 2017 tended to considerably increase from those in 2016. Regarding the Bank’s overall credit facility structure in 2017, the proportion of corporate credit facilities (with the credit limit of exceeding 200 million Baht) was equal to 46% with the total credit limit of 20,293 million Baht and the total number of 38 customers. Meanwhile, the proportion of SMEs credit facilities (with the credit limit of 20-200 million Baht) was equal to 16% with the total credit limit of 7,088 million Baht and the total number of 159 customers, and the proportion of retail credit facilities (with the credit limit of not exceeding 20 million Baht) was equal to 38% with the total credit limit of 16,785 million Baht and the total number of 70,800 customers. Meanwhile, approximately 53% of the total customers of the Bank were Muslims, and approximately 47% of them were non-Muslims. Structure of Credit Facilities Classified by Customer Types: Numbers of Credit Customers Classified by Muslim and Non-Muslim Groups: 60% 60% 50% 50% 53% 46% 40% 38% 30% 40% 30% 20% 20% 16% 10% 0% 47% 10% Corporate SMEs Retail 0% Muslim Non-Muslim Deposits: In 2017, the Bank’s total deposits were 87,277 million Baht, decreased by 9% YOY or equal to 8,416 million Baht. Regarding the Bank’s structure of overall deposits in 2017, the proportion of each customer group was approximate to the structure of credit facilities, i.e., the proportion of corporate deposits (with the deposit limit of exceeding 200 million Baht) was equal to 43% with the total amount of 37,789 million Baht and the total number of 50 customers. Meanwhile, the proportion of medium-size deposits (with the deposit limit of 20-200 million Baht) was equal to 22% with the total amount of 19,149 million Baht and the total number of 398 customers, and the proportion of retail deposits (with the deposit limit of not exceeding 20 million Baht) was equal to 35% with the total amount of 30,340 million Baht and the total number of 768,216 customers. Meanwhile, approximately 56% of the total customers of the Bank were Muslims, and approximately 44% of them were non-Muslims. Structure of Deposits Classified by Customer Types: Numbers of Deposit Customers Classified by Muslim and Non-Muslim Groups: 60% 60% 50% 56% 50% 44% 43% 40% 35% 30% 30% 22% 20% 20% 10% 0% 40 40% 10% Large Annual Report 2017 Medium Retail 0% Muslim Non-Muslim
41. Legal Capital : The Bank’s total capital was -20,013 million Baht, increased by 2,936 million Baht from those in 2016 from the net loss of the operating result in 2016 amounted to 2,926 million Baht, mostly resulting from provisions of credit with qualitative classification and the capital ratio of -52.83%. The negative capital adequacy ratio having increased from those in the previous year resulted from the transfer of NPF to Islamic Bank Asset Management Limited (IAM) and, consequently, the number of risky assets decreased. Regarding the financial restructuring to solve problems of the Bank’s financial position, as per the Resolution of the State Enterprise Policy Commission (SEPC), the Ministry of Finance was assigned to solve problems of the Bank’s financial position by means of capital reduction, capital increase to enhance the capital strength. At present, the Ministry of Finance is in the process of amendment of Section 7, Paragraph 3 of the Islamic Bank of Thailand Act B.E.2545 so that the Ministry of Finance shall be able to temporarily hold shares equal to more than 49% of the issued shares to support the capital increase of the Ministry of Finance in solving problems of the banking business. Credit Quality: The Bank has improved the credit process and the criteria for credit consideration to reduce non-conformities in the past by giving more importance to the process of credit screening and concisely considering conditions of credit approval. In addition, the Bank has strictly supervised the compliance with conditions of credit approval; as a result, the newly approved credit facilities had better quality, evidenced by the proportion of NPF of newly approved customers was at the level of 0.06% only. The Bank had the credit with lower qualitative classification (unpaid for at least 3 months) or NPF at the end of 2017 amounted to 11,052 million Baht or equal to 25% of the total credit facilities or decreased by 42,669 million Baht from those in 2016 with NPF of totally 53,721 million Baht, mainly resulting from the transfer of NPF to Islamic Bank Asset Management Limited (IAM). At the end of 2017, the Bank had NPF with qualitative classification amounted to 2,802 million Baht. Proportions of NPF: NPF 57% PF 43% 2016 NPF 25% PF 75% 2017 At the end of 2017, the Bank’s allowances for doubtful accounts were totally 8,228 million Baht, decreased by 75% YOY or equal to 24,766 million Baht (allowances for doubtful accounts in 2016 were 32,995 million Baht), resulting from the transfer of non-performing assets to IAM. However, the Bank’s provisions with credit classification increased by 2,077 million Baht. Annual Report 2017 41
42. Operating Results as per the Business Plan of 2017 : Branches and Credit Transactions-Deposits Classified by Regions: As of 31st December 2017, the Bank had totally 102 branches nationwide, including 39 branches in the Southern Region, 37 branches in Bangkok and its vicinity, Central Region, Eastern Region, Western Region, 14 branches in the Northern Region, and 12 branches in the Northeastern Region. When considering service areas of Branches of the Bank, together with the quantity of credit transactions, deposits, numbers of customers and religions of customers at the end of 2017, it was found that the largest number of customers and Muslim customers was in areas of the Southern Region, which was in conformity with the Bank’s intention to emphasize service provision in strategic areas as per the Bank’s mission. Table of Use of Credit Facilities and Deposits of Customers Classified by Customer Groups and Regions at the end of 2017: Total of Deposit Region 1. Southern Region 2. Bangkok and its vicinity, Central Region, Eastern Region, Western Region 3. Northern Region 4. Northeastern Region Total Muslim Deposit Total Credit Total Muslim Credit Customers Customers Customers Customers Numbers % % % % % % % % of Branches of Cases of Amount of Cases of Amount of Cases of Amount of Cases of Amount Nationwide Nationwide Nationwide Nationwide 39 56.06% 14.40% 80.46% 44.62% 73.37% 45.71% 88.45% 71.98% 37 30.21% 72.09% 17.50% 50.04% 22.47% 39.05% 11.08% 24.91% 14 7.09% 9.20% 1.55% 4.25% 2.24% 9.38% 0.36% 2.62% 12 6.64% 4.31% 0.49% 1.09% 1.92% 5.86% 0.11% 0.48% 102 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% Directions and Operation Plan in 2018: Regarding the operation plan of 2018, the Bank has its main goal to regain its profitability for the first time in 5 years. The Bank has prepared the strategic recovery plan and business plan of 2018-2022 for implementation in 2018 with the emphasis on operation under the main mission, and creation of financial security concurrently with the organizational improvement and development to regain its profitability and stable growth, with main guidelines, as follows: 42 Annual Report 2017
43. 1 ) Expansion of High Quality Credit Facilities to create balance between credit and deposits by emphasizing state enterprise customer group, including key accounts with quality and low risk, by using the “Marginal Profit Concept”. 2) Reduction of Financial Costs by means of expansion of bases of retail deposits and current account/savings account deposit (CASA) to reduce financial risks and expenses, including reduction of maintenance of surplus liquidity by means of reservation of credit lines from other specialized financial institutions (SFIs). 3) Reduction of the Operating Expenses by reducing expenses throughout the organization and the Centralized Back Office. 4) Correction of NPF and Interception of Low-Quality Credit by proactively correcting NPF in order to reduce NPF and to intercept low-quality credit and provisions as per observations of the Bank of Thailand. 5) Increase of Business Potentials by using resources together with other SFIs. In addition to operation in accordance with main guidelines, the Bank also had plan in issuing measures to solve problems of retail debts, which has been launched during January-March 2017 with the main objective of helping retail customers who had outstanding payments with the Bank, mostly were Muslims in the Three Southern Border Provinces, which enabled the Bank to generate incomes and to reduce burdens of provisions from operation under the said measures. The Bank also had plan to improve the integrity and transparency of operation under the guidelines of the Office of the National Anti-Corruption Commission (NACC Office) and to correct issues and observations as per the audit report of the Bank of Thailand (BOT) to create confidence in the Bank’s operation. Annual Report 2017 43
44. Significant Projects 1 . Significant Projects Supporting the Compliance with the Law and with the Official Policy Project Name 1. E-Payment System Development Project, Phase 2 2. Accounting Standard System Development Project 3. Basel II Project 4. Revision of Rules, Regulations, Orders Objective To be part of Thailand’s Payment Infrastructure System Development Project To prepare the Bank’s financial statements correctly in accordance with the accounting standard and the generally accepted international financial reporting standard when promulgated. To prepare the readiness for capital calculation as per the criteria To revise the Bank’s rules, regulations and orders in conformity with the criteria for supervision of specialized financial institutions of the Bank of Thailand 2. Significant Projects Supporting the Business Growth Operation Project Name 1. Data Center Relocation Project 2. Improvement of efficiency of credit facilitation and risk reduction 2.1 Centralized Back Office 2.2 Debt Collection and Correction 3. Improvement of Credit Facilitation Process 4. Product Development Plan 44 Annual Report 2017 Objective To provide effective services in the integrated management in accordance with the standard as per the requirements of the Bank of Thailand and with international standards To improve efficiency, to reduce time and risk of credit operation and debt collection and correction To provide credit expansion of the Bank in a careful, concise and competitive manner To properly provide the Bank’s products in response to demands of target customers as per the Bank’s mission
45. Annual Report 2017 45
46. Good Corporate Governance Regarding the operation in accordance with the strategic plan and mission of the Bank which is a state-owned specialized financial institution with significant role of financial service provision under the Principle of Shariah in the national economic and social development , it is essential to determine policy and measures of corporate governance, assessment and organizational development under the Shariah Principles and international standard of transparency and accountability in order to improve the efficiency and to create the added value to the organization. Therefore, the good corporate governance is essential so that the Bank’s operation shall have good and transparent management system which is acceptable to all related parties and for enhancement of honor and prestige of a state enterprise bank under the Ministry of Finance, and for creation of trust and faith from stakeholders. The Good Corporate Governance Policy of the Bank covers 6 Sections, principles, policies and operational guidelines, including the performance standard, good conduct on the basis of corporate governance for directors, executives, employees, service recipients, general public and stakeholders as per the guidelines prescribed by the Fiscal Policy Office; whereas, personnel at all levels of the Bank shall be able to implement its Good Corporate Governance Policy in all 6 Sections as operational guidelines as appeared in the Good Corporate Governance Policy, as follows: 46 Annual Report 2017 Section 1: The Principle of Good Corporate Governance by the State Section 2: Rights and Equitable Treatment of the State Section 3: Responsibilities of the Board Section 4: Roles of stakeholders Section 5: Information disclosure and transparency Section 6: Codes of Ethics and/or Conduct In addition, the Bank is also a state enterprise participating in the Integrity & Transparency Assessment (ITA) conducted by the NACC Office; and the Bank has received high scores (72-78 scores) from the assessment result. However, in 2018, the Bank aimed at upgrading ITA scores to 81-100 scores, leading the Bank to the era of Thailand’s economic development “Thailand 4.0”; whereas, the Bank needed to increase measures, mechanism on the development of transparency index, accountability index, corruption-free index, organizational culture and integrity index, and performance integrity index, thus, to create confidence in the SFIs Sector, and its regulatory supervision entities, including the public sector; whereas, ITA project has also been conducted as one of the significant missions in 2018.
47. Good Corporate Governance Report Under The Islamic Principle In the name of mercy Allah The Islamic Bank of Thailand has conducted its good corporate governance activities under the Islamic Principle and in accordance with the criteria prescribed by the Bank of Thailand as per the Bank of Thailand Notification No .Sor.Gor.Sor.19/2559; Subject: Criteria for Governance of Specialized Financial Institutions Operating Financial Businesses under the Islamic Principle, dated 11th October 2016, which took effect from 1st January 2017, and Criteria for Corporate Governance of the Bank of Thailand Governing Roles, Duties, and Responsibilities of the Shariah Advisory Council of the Islamic Bank of Thailand (“Advisory Council”), Sub-clause 1.4.2 prescribing that the Advisory Council shall recommend the Bank to have the good corporate governance system and audit of proper and effective operation relating to the Islamic Principle, Sub-clause 1.4.4. A good corporate governance report should be provided in accordance with the Islamic Principle to express opinions on business operation under the Islamic Principle, including the disclosure of significant transactions or actions which are contrary to the Islamic Principle in the Annual Report of the Islamic Bank of Thailand, and Sub-clause 1.5 prescribing that the Bank shall review the internal control and internal audit system and compliance with the related laws, and shall also review the internal control system and compliance with policies, regulations, manuals and work procedures relating to the Islamic Principle, as well as recommendations of the Shariah Advisory Council, and shall also report the results of review, audit and compliance with the Islamic Principle to the Shariah Advisory Council; provided that there were progresses relating to operation of the Shariah Advisory Council as per the roles prescribed in such Notification, as follows: 1. The Bank has announced the appointment of the “Shariah Working Group on Development of the Good Corporate Governance System; No.Gor.Gor.Ror.(Bor.)269/2560 dated 17th March 2017 as per the proposal of the Shariah Advisory Council; whereas, the Working Group shall consist of: 1. Mr. Pramote Meesuwan Chairman of the Working Group 2. Mr. Senee Upensuk Vice Chairman 3. Mr. Arun Boonchom Advisor 4. Shariah Department Director Working Group and Secretary Whereas, the Working Group shall have roles and duties to study the good corporate governance system, audit and Shariah operation of the Bank, and to present guidelines of the good corporate governance system and audit of proper and effective operation relating to the Islamic Principle to the Shariah Advisory Council to be proposed to the Management of the Bank. In 2017, such Working Group has organized 3 meetings for discussion with units responsible for the good corporate governance including the Internal Audit Department, the Compliance and Rules Department, the Credit Review Department, the Risk Management Department, Shariah Department, and the Sustainable Organizational Development Office; whereas, guidelines thereof shall be summarized and presented to the Shariah Advisory Council and the Management of the Bank. 2. In the Meeting of the Shariah Advisory Council No.3/2017 dated 23rd February 2017, the Shariah Advisory Council passed its resolution to approve the revision of the Islamic Bank of Thailand Regulations No.20 Governing the Business Operation of the Bank under the Islamic Principle 2011 and promulgation of the Islamic Bank of Thailand Regulations No.20 Governing the Good Corporate Governance of the Bank under the Islamic Principle 2017 in place of the original regulations No.Gor.Gor.Ror.(Bor.)551/2017 dated 6th July 2017 so that the Bank shall have its good corporate governance under the Islamic Principle in different aspects, including the work of audit, compliance, credit review, risk management, counselling and handling of complaints. 3. The Shariah Advisory Council shall not only give importance to the good corporate governance but also give opinions to the marketing units responsible for service provision to customers such as the loan/deposit/branch facilitation unit, etc., awareness and strict adherence to the work rules, regulations in order to reduce the potential risks to find transactions which are contrary to the Islamic Principle. In particular, it was reiterated relating to the execution of juristic acts, loan agreements under the Principle of Bai Al-Inah for correct operation as per the Checklist Form, signing of loan agreements under the Principle of Bai Al-Inah, which consisted of 5 processes. In case, the operator has breached the process; as a result, the provision of juristic acts or contracts is not correctly in accordance with the Islamic Principle which may be binding to interest; and the disciplinary punishment shall be considered as per the Islamic Bank of Thailand Regulations No.8 Governing Employees. Annual Report 2017 47
48. 4 . In order to provide a good corporate governance report under the Islamic Principle to express opinions on the business operation under the Islamic Principle, including the disclosure of significant transactions or actions which are contrary to the Islamic Principle in the Annual Report of the Islamic Bank of Thailand, in the Meeting of the Shariah Advisory Council No.13/2017 dated 26th December 2017, the Shariah Advisory Council passed its resolution to reiterate departments responsible for business supervision under the Islamic Bank of Thailand Regulations No.20 Governing the Good Corporate Governance of the Bank under the Islamic Principle 2017, including the Internal Audit Department, Compliance and Rules Department, the Credit Review Department, the Risk Management Department, Shariah Department, and the Sustainable Organizational Development Office to report the operation to the Shariah Advisory Council on a quarterly basis, except in case, any transactions are found or it is doubted that there is an action significantly in contrary to the Islamic Principle, it shall report such transactions immediately. 5. Within 2017, the Shariah Advisory Council has not received any report or complaints relating to actions which are contrary to the Islamic Principle. the presented data. The Shariah Advisory Council has considered the same under the Islamic Principle strictly, and hereby guaranteed, as follows: 1. Consideration of products and services, regulations, work manuals and contract documents of the Bank used for business operation of the Bank in terms of deposit, loans and services are in accordance with the Islamic Principle; 2. Consideration of business types that the Bank has given the support of loans and investment which were sources of incomes to be allocated as remuneration to such depositor are in accordance with the Islamic Principle; 3. Consideration of handling with incomes from compensation/ penalties from default of debt payment or incomes which are contrary to the Islamic Principle; the Bank did not recognize them as incomes to be in accordance with the Islamic Principle; 4. Consideration and allocation of compulsory donation of the Zakat Subcommittee which is under the responsibility of the Shariah Advisory Council in accordance with the Islamic Principle. Guarantee of the Shariah Advisory Council of the Islamic Bank “Allah is the provider of success and leading to the upright ways” of Thailand In 2017, the Shariah Advisory Council has organized totally 13 meetings and has considered sessions thereof from documents or 48 Annual Report 2017
49. Structure and Responsibilities of the Board Structure of the Board of Islamic Bank of Thailand The Board of Islamic Bank of Thailand consisted of 11 Directors including specialists who have knowledge , abilities, skills and experiences in management from various sectors; whereas, the meeting of shareholders of the Bank shall elect qualified people to assume the office of the Bank’s directors in accordance with the criteria, legal methods and regulations of the Bank. Each director shall assume the office for 3 years each; and when the term in office of any director is terminated, the Bank shall organize a meeting of shareholders to elect a substituting director. As of 3rd December 2017, the Bank had 11 directors, with details and changes of directors in the previous year, as follows: No. List of Directors 1. 2. Mr. Chaiwat Uthaiwan General Natthipong Pueksakorn 3. Mr. Niphon Hakimi 4. Mr. Panu Uthairat 5. Mr. Montchai Ratanastien 6. Assoc.Prof. Pasu Decharin 7. Miss Piyawan Lamkitcha 8. Dr. Pornchai Thiraveja 9. Mr. Wittaya Chaisuwan 10. Miss Angkana Sawatpoon 11. Miss Veena Techachainirun 12. Mr. Vitai Ratanakorn Positions/ Assigned Duties Reason - Chairman of the Board of Directors - Director - Chairman of the Audit Subcommittee - CG&CSR Subcommittee Director - Chairman of the Nomination, Remuneration and Performance Appraisal Subcommittee - Director - Chairman of the Executive Subcommittee - Chairman of the Compliance Subcommittee - President’s Performance Appraisal Subcommittee Director - Chairman of the President Nomination Committee (since 12th April 2017 until present) - Zakat Subcommittee Director - Director - Chairman of CG&CSR Subcommittee - Chairman of the President’s Performance Appraisal Subcommittee - Audit Subcommittee Director - Director - Chairman of the Risk Management Subcommittee (25th August 2016-11th April 2017 and since 19th December 2017 until present) - Chairman of the Relation Affairs Committee - Vice Chairman of the Executive Subcommittee - CG&CSR Subcommittee Director - Compliance Subcommittee Director - President Nomination Committee Director - Director - Chairman of the Information System Development Subcommittee (21st August 2014 - 5th October 2016) - Audit Subcommittee Director - CG&CSR Subcommittee Director - Nomination, Remuneration and Performance Appraisal Subcommittee Director - President Nomination Committee Director and Secretary - Director - Vice Chairman of the President Nomination Committee - The Executive Subcommittee Director - Compliance Subcommittee Director - Nomination, Remuneration and Performance Appraisal Subcommittee Director - The President’s Performance Appraisal Subcommittee Director - Director - Chairman of the Risk Management Subcommittee (12th April 2017-3rd December 2017) - The Information System Development Subcommittee Director (23rd June 2015 - 15th October 2016) - Director - Chairman of the President Nomination Committee (since 23rd June 2015-16th January 2017) - Director - The Executive Subcommittee Director - The Risk Management Subcommittee Director - President Nomination Committee Director - Director and Acting President (1st June 2016 - 30th September 2017) - The Executive Subcommittee Director (1st June 2016 - 30th September 2017) - The Risk Management Subcommittee Director (1st June 2016 - 30th September 2017) - CG&CSR Subcommittee Director (1st June 2016 - 30th September 2017) - The Information System Development Subcommittee Director (1st June 2016 - 16th October 2016) - Director - Acting President (since 1st October 2017) - The Executive Subcommittee Director (since 1st October 2017) - The Risk Management Subcommittee Director (since 1st October 2017) - CG&CSR Subcommittee Director (since 1st October 2017) Director Director Director Director Director Director Director Director Director Director Director Director Annual Report 2017 49
50. Appointment of Committees , Subcommittees and Working Groups 1.Executive Subcommittee Scope of authorities of the Executive Subcommittee is as follows: 1. To determine overall investment policies, investment directions for potential companies that the Bank may invest in line with the Bank’s investment policies, and hold authorities to approve investment direction and overall investment activities under the Bank’s rules; 2. To consider and approve possible losses that may (or may not) arise from debt restructuring within the limit granted by the Board of Directors; 3. To consider and approve credit, debt restructuring, investment in securities and property, receipt of financial support, pro curement and outsourcing, and other general expenses within the scope of authorities granted by the Board of Directors; 4. To recommend appropriate and efficient organization structure, propose policies and strategies in terms of personnel, man power, remuneration and benefits for employees and workers to the Board of Directors for approval; 5. To review the Bank’s master plans on human resource development both in short term and in long term as well as other ongoing projects; 6. To provide operational advice in terms of organization structure, personnel, remuneration, benefits and welfare, dynamic and sustainable organization development, and provide recommendations on employment of educational institutions or external consulting companies or consultants to improve the Bank’s personnel management; 7. To develop human resources at all levels with readiness in all areas to ensure their vision, all-round knowledge, good personality and awareness; 8. To screen and identify duties out of the authority scope of Subcommittees and propose them to the Board of Directors; 9. To consider other significant matters such as new businesses, remuneration policy, credit policy, accounting policy and lawsuits taken against the Bank; 10. To approve or acknowledge other management-related matters that the Executive Subcommittee deems necessary or proper by Subcommittees to be proposed for acknowledgment; 11. To consider any other matters assigned by the Board of Directors; 1. 2. 3. 4. 5. Directors of the Executive Subcommittee as of 31st December 2017 are as follows: Mr. Niphon Hakimi Chairman of the Subcommittee Mr. Montchai Ratanastien Vice Chairman of the Subcommittee Miss Piyawan Lamkitcha Subcommittee Director Miss Angkana Sawatpoon Subcommittee Director President Subcommittee Director and Secretary 1. 2. 3. 4. Details of change in the Executive Subcommittee during 2017: Mr. Niphon Hakimi has been the Chairman since 23rd June 2015 until present. Mr. Montchai Ratanastien has been Vice Chairman since 21st August 2014 until present. Miss Piyawan Lamkitcha has been Subcommittee Director since 29th September 2014 until present. Miss Angkana Sawatpoon has been Subcommittee Director since 12th April 2017 until present. 2.Audit Subcommittee Scope of authorities of the Audit Subcommittee is as follows: 1. To propose the appointment of the Bank’s auditor to the Board of Directors, monitor the auditor’s performance and consider audit fees; 50 Annual Report 2017
51. 2 . To make final decision in case the Bank’s management and the auditor have contradictory opinions on the Bank’s financial reports; 3. To consider other non-audit duties that the Bank may require the auditor to perform; 4. To endorse and recommend the Board of Directors to approve the appointment, transfer, dismissal, remuneration and annual performance rewards for the top management of the Internal Audit Department; 5. To review and approve charters and code of ethics of the Internal Audit Department as well as the internal audit plans and budget of the Internal Audit Department; 6. To outsource consultants or professional experts to provide advice or assistance on audit activities at the expense of the Bank; 7. To request information and cooperation from the Bank’s relevant employees and related third parties; 8. To have meetings with the Management, auditor, internal auditor and external consultants as necessary and appropriate; 9. To delegate authorities to working groups in the Audit Subcommittee (if any) as appropriate; 10. To execute Charters of the Audit Subcommittee in line with the scope of responsibilities for the Bank’s operation with consent and approval of the Board of Directors; 11. To perform any other works as required by laws or designated by the Board of Directors, thus, within the scope of duties and responsibilities of the Audit Subcommittee; 1. 2. 3. 4. 1. 2. 3. Directors of the Audit Subcommittee as of 31st December 2017 are as follows: General Natthipong Pueksakorn Chairman of the Subcommittee Mr. Panu Uthairat Subcommittee Director Assoc.Prof. Pasu Decharin Subcommittee Director Vice President / Senior Vice President of Secretary Internal Audit Department or assigned person Details of change in the Audit Subcommittee during 2017: General Natthipong Pueksakorn has been the Chairman since 21st August 2014 until present. Mr. Panu Uthairat has been Subcommittee Director since 21st August 2014 until present. Assoc.Prof. Pasu Decharin has been Subcommittee Director since 21st August 2014 until present. 3.Risk Management Subcommittee Scope of authorities of the Risk Management Subcommittee is as follows: 1. To determine the risk management policy and propose it to the Board of Directors. The policy shall cover 6 major risk areas, namely Shariah risk, strategic risk, credit risk, market risk, liquidity risk and operational risk, and shall be in accordance with COSO Enterprise Risk Management (COSO ERM); 2. To determine strategies in line with the risk management policy, ensuring that the Bank’s risks can be assessed, monitored and controlled at an acceptable level; 3. To review the adequacy of risk management policy and system, including the effectiveness of the system and policy compliance; 4. To coordinate with the Audit Subcommittee and regularly report to the Board of Directors regarding any risk management issues that need improvement to be in line with the prescribed polity and strategy; 5. To supervise, endorse the preparation of the Bank’s risk assessment report and propose it to the Board of Directors for acknowledgment at least once a year at the end of accounting period. Such report shall be kept at the Bank for further examination by the Bank of Thailand’s examiners; Annual Report 2017 51
52. 6 . To have powers to retrieve data, documents or to demand people or related departments to be examined or provide clarification, and to submit minutes of the meetings for the Board of Directors’ acknowledgment; 7. To have powers to appoint consultants, experts or specialists to give advice, opinions or recommendations regarding risk management and other issues for the Bank’s benefits, and to receive remuneration as fixed by the Risk Management Sub committee; 8. To determine, review and improve the Bank’s GRC Framework and propose it to the Board of Directors; 9. To determine and review the Bank’s GRC target based on phases of development needed to attain, and to take actions to achieve GRC coverage and propose it to the Board of Directors for approval; 10. To support the integration of good corporate governance, risk management, compliance and business operation of the Bank; 11. To have powers of approval in all cases for non-classification of debtors by taking account of results of proof, related parties as per the indications specified in guidelines for proving of related parties as per the Single Lending Limit fixed by the Bank of Thailand; 12. To take other actions as assigned by the Board of Directors; Directors of the Risk Management Subcommittee as of 31st December 2017 are as follows: 1. Mr. Montchai Ratanastien Chairman 2. Miss Angkana Sawatpoon Director 3.President Director 4. Vice President of the Risk Management Secretary Department or equivalent Details of change in the Risk Management Subcommittee during 2017: 1. Mr. Montchai Ratanastien has been the Chairman from 25th August 2016 until 11th April 2017 and from 19th December 2016 until present. 2. Miss Angkana Sawatpoon has been Subcommittee Director since 12th April 2016 until present. Notes:Dr. Pornchai Thiraveja has been Chairman of the Risk Management Subcommittee from 12th April 2017 until 3rd December 2017. Dr. Pornchai Thiraveja resigned from the office of Chairman of the Risk Management Subcommittee on 4th December 2017. 4.CG&CSR Subcommittee Scope of authorities of the CG&CSR Subcommittee is as follows: 1. To propose CG&CSR policy to the Board of Directors; 2. To regularly review CG&CSR policy of the Bank; 3. To determine operational framework and guidelines in line with the Bank’s code of ethics; 4. To provide recommendations on the Bank’s business operation to achieve goals in line with the Bank’s annual CG&CSR plan; 5. To promote the dissemination of cultural information and transparent corporate governance to ensure understanding at all levels and practical outcome, including the participation of the Bank’s Board of Directors, executives, employees and workers, communities, customers and the general public in CSR activities for sustainable development; 6. To integrate processes relating to governance, risk management and compliance to ensure that the achievement is derived from all departments’ participation (integrity-driven performance); 52 Annual Report 2017
53. 7 . 8. 9. 10. To monitor the Bank’s CG&CSR operation and report it to the Board of Directors; To supervise the Bank’s integrated CG&CSR operation, supervise the preparation of the Bank’s annual CG&CSR report; To appoint working groups or consultants of the CG&CSR Subcommittee to support the performance on corporate governance and corporate social responsibility as necessary and appropriate; To perform other duties as assigned by the Board of Directors; Directors of the CG&CSR Subcommittee as of 31st December 2017 are as follows: 1. Mr. Panu Uthairat Chairman 2. General Natthipong Pueksakorn Director 3. Assoc.Prof. Pasu Decharin Director 4. Mr. Montchai Ratanastien Director 5.President Director 6. Executive Director/Senior Executive Director Director of Corporate Image and Communication Department 7. President of State Enterprise Director Labor Union of Islamic Bank of Thailand 8. Executive Director/Senior Executive Director and Secretary Director of Sustainable Organizational Development Office or assigned person 1. 2. 3. 4. Details of change in the CG&CSR Subcommittee during 2017: Mr. Panu Uthairat has been the Chairman from 29th September 2014 until present. General Natthipong Pueksakorn has been Subcommittee Director from 21st August 2014 until present. Assoc.Prof. Pasu Decharin has been Subcommittee Director from 21st August 2014 until present. Mr. Montchai Ratanastien has been Subcommittee Director from 29th September 2014 until present. 5.Nomination and Remuneration Subcommittee Scope of authorities of the Nomination and Remuneration Subcommittee is as follows: Nomination 1. To determine policy, criteria and methods of recruitment, selection and nomination of the Bank’s directors and subcommittee Directors for the Board of Directors’ approval, including the following matters: i) Extent and varieties of essential knowledge, skills and experience of the Bank’s directors; ii) Types, size and components of subcommittees, including recommendation to the Board of Directors to appoint replacement for vacant positions due to directors’ retirement by rotation or any other reasons; 2. To determine policy, criteria and methods of recruitment of executives (Executive Vice President and above), excluding the President; 3. To determine policy, criteria and methods of performance appraisal, to consider and approve the performance appraisal results of executives (Department Director and above), excluding the President; Annual Report 2017 53
54. 4 . To ensure that the Bank has appropriate succession plan for the President and propose it to the Bank’s Board of Directors for approval; Remuneration 1. To propose appropriate remuneration for the Board of Directors to the Bank’s Board of Directors for consideration and propose it to shareholders; 2. To propose appropriate remuneration for subcommittees to the Board of Directors; 3. To propose appropriate remuneration plan for executives (Executive Vice President and above) except the President to the Board of Directors; 4. To take actions as assigned by the Board of Directors; 1. 2. 3. 4. 1. 2. 3. Directors of the Nomination and Remuneration Subcommittee as of 31st December 2017 are as follows: General Natthipong Pueksakorn Chairman of the Subcommittee Assoc.Prof. Pasu Decharin Subcommittee Director Miss Piyawan Lamkitcha Subcommittee Director Department Director; Secretary Bank’s Secretary Department Details of change in the Nomination and Remuneration Subcommittee during 2017: General Natthipong Pueksakorn has been the Chairman from 24th March 2016 until present. Assoc.Prof. Pasu Decharin has been Subcommittee Director from 29th September 2014 until present. Miss Piyawan Lamkitcha has been Subcommittee Director from 21st August 2014 until present. 6.Compliance Subcommittee Scope of authorities of the Compliance Subcommittee is as follows: 1. To consider and screen the release or review of rules and regulations of the Bank issued in accordance with the law or the Bank’s requirements relating to personnel management, banking and general operation management, provide advice or recommendation on the exercise of powers to issue, enforce and determine directions and legal issues regarding rules and regulations, and consider the summary and ensure the completeness of rules and regulations prior to submission there of to the authorized person for approval. 2. To regularly review policy and charter of compliance with the official rules and regulations and propose it for the Board of Directors’ approval; 3. To have powers to appoint working groups or the Bank’s employees to perform the assigned duties; 4. To have powers to invite working groups or the Bank’s employees to provide information or clarification supporting the consideration; 5. To consider and provide comments or recommendations on compliance report and credit review and report the same to the Board of Directors for acknowledgment; 6. To endorse annual compliance report, compliance plan and credit review; 7. To provide recommendations on operation of the Compliance and Rules Department and the Credit Review Department; 8. To report to the Board of Directors for correction of any detected or suspicious non-compliance with the law, rules, regulations, standard and practices in any transactions that may cause compliance risk; 9. To take any other actions as assigned by the Board of Directors; 54 Annual Report 2017
55. 1 . 2. 3. 4. 1. 2. 3. Directors of the Compliance Subcommittee as of 31st December 2017 are as follows: Mr. Niphon Hakimi Chairman Mr. Montchai Ratanastien Director Miss Piyawan Lamkitcha Director Executive Director/Senior Executive Secretary Director of the Compliance and Rules Department or assigned person Details of change in the Compliance Subcommittee during 2017: Mr. Niphon Hakimi has been the Chairman from 29th September 2014 until present. Mr. Montchai Ratanastien has been Subcommittee Director from 21st August 2014 until present. Miss Piyawan Lamkitcha has been Subcommittee Director from 29th September 2014 until present. 7.Zakat Subcommittee Scope of authorities of the Zakat Subcommittee is as follows: The Zakat Subcommittee has authorities to manage Zakat accounts and the Bank’s Zakat account duly in accordance with the objectives and the Islamic principles and conditions. The Subcommittee shall ensure that Zakat account management and operation is properly carried out under the Bank’s Regulations No.11 governing the Bank’s transaction B.E.2553 (2nd Edition), Section 4, Article 13(3): Zakat Account Management. 1. 2. 3. 4. 5. 6. 7. Directors of the Zakat Subcommittee as of 31st December 2017 are as follows: Dr. Anas Amatayakul Chairman Dr. Maroning Salaeming Director Mr. Pramote Meesuwan Director Mr. Senee Yupensuk Director Mr. Niphon Hakimi Director Vice President of Shariah Department Director Vice President of Hajj and Umrah Department Director and Secretary 1. 2. 3. 4. 5. Details of change in the Zakat Subcommittee during 2017: Dr. Anas Amatayakul has been the Chairman from 22nd October 2014 until present. Dr. Maroning Salaeming has been Subcommittee Director from 22nd October 2014 until present. Mr. Pramote Meesuwan has been Subcommittee Director from 22nd October 2014 until present. Mr. Senee Yupensuk has been Subcommittee Director from 22nd October 2014 until present. Mr. Niphon Hakimi has been Subcommittee Director from 22nd October 2014 until present. Note: Assoc.Prof. Abdullah Abru has been Subcommittee Director from 22nd October 2014 until 28th September 2015 due to having reached the retirement age (60 years old). 8.President’s Performance Appraisal Subcommittee Scope of authorities of the President’s Performance Appraisal Subcommittee is as follows: 1. To review the operation plan proposed by the President and ensure that such plan will be for the Bank’s benefits; Annual Report 2017 55
56. 2 . 3. 4. 5. 6. 7. 1. 2. 3. 4. 1. 2. 3. To determine assessment guidelines in line with and achieve the Bank’s vision, objectives, missions and target of operation as well as budget approved by the Board of Directors; To set indicators and to measure the efficiency and effectiveness in the President’s performance; To consider the performance result and assess the quality of performance as per the business plan proposed by the President and approved by the Board of Directors; To provide suggestion, and present the assessment result, including problems, obstacles and limitation of the President’s performance as well as solutions to those problems, obstacles and limitation of the President’s performance to the Board of Directors; To review the target and performance criteria for the President and propose it to the Board of Directors for approval; To present the performance result in comparison with the above-mentioned target and criteria to the Board of Directors to consider appropriate remuneration and benefits for the President; Directors of the President’s Performance Appraisal Subcommittee as of 31st December 2017 are as follows: Mr. Panu Uthairat Chairman Mr. Niphon Hakimi Director Miss Piyawan Lamkitcha Director Vice President of Corporate Secretary Department Secretary or equivalent Details of change in the President’s Performance Appraisal Subcommittee during 2017: Mr. Panu Uthairat has been the Chairman from 21st August 2014 until present. Mr. Niphon Hakimi has been Subcommittee Director from 21st August 2014 until present. Miss Piyawan Lamkitcha has been Subcommittee Director from 21st August 2014 until present. 9.Relation Affairs Subcommittee Scope of authorities of the Business Relation Affairs Subcommittee is as follows: 1. To provide comments on efficiency improvement for the Bank’s operation and promote and develop the labor relations; 2. To seek reconciliation and resolve disputes in the Bank; 3. To improve work rules and regulations for the benefits of the employer, employees and the Bank; 4. To discuss and solve problems as per complaints of employees or labor union, including complaints relating to disciplinary action; 5. To discuss on solutions to improve the employment condition; 1. 2. 3. Members of the Relation Affairs Subcommittee as of 31st December 2017 are as follows: Mr. Montchai Ratanastien Chairman Employer’s 9 representatives Director Employees’ 9 representatives Director Details of change in the Relation Affairs Subcommittee during 2017: 1. Mr. Montchai Ratanastien has been the Chairman from 21st August 2014 until present. 56 Annual Report 2017
57. 10 . President Nomination Subcommittee 1. 2. 3. 4. Scope of authorities of the President Nomination Subcommittee is as follows: To nominate person with knowledge, capacity and experiences suitable to be the President of the Bank, by taking accountability into consideration; To consider qualifications of potential President of the Bank in accordance with the Standard Qualifications of State Enterprise Directors and Officials Act B.E.2518 and Amendments, and other relevant laws and regulations; To select and nominate qualified candidates for presidency to the Board of Directors; To perform any other duties as assigned by the Board of Directors; 1. 2. 3. 4. 5. 6. Directors of the President Nomination Subcommittee as of 31st December 2017 are as follows: Mr. Niphon Hakimi Chairman Miss Piyawan Lamkitcha Vice Chairman Miss Angkana Sawatpoon Director Mr. Montchai Ratanastien Director Assoc.Prof. Pasu Decharin Director and Secretary Vice President of Corporate Secretary Assistant Secretary Department or equivalent 1. 2. 3. 4. 5. Details of change in the President Nomination Subcommittee during 2017: Mr. Niphon Hakimi has been Subcommittee Director from 23rd June 2015 until present. Miss Piyawan Lamkitcha has been Subcommittee Director from 23rd June 2015 until present. Miss Angkana Sawatpoon has been Subcommittee Director from 12th April 2017 until present. Mr. Montchai Ratanastien has been Subcommittee Director from 23rd June 2015 until present. Assoc.Prof. Pasu Decharin has been Subcommittee Director from 23rd June 2015 until present. Note: Mr. Wittaya Chaisuwan has been the Chairman from 23rd June 2015 until 15th January 2017, and Mr. Wittaya Chaisuwan resigned from the office of the Bank’s director on 16th January 2017. Annual Report 2017 57
58. Summary of Directors ’ Meeting Attendance in 2017 Board of Directors Name Executive Audit Risk CG&CSR Compliance President Nomination Relation Affairs Subcommittee Subcommittee Management Subcommittee Subcommittee Nomination and Subcommittee Subcommittee Remuneration Subcommittee Subcommittee 19 Meetings 25 Meetings 14 Meetings 9 Meetings 3 Meetings 7 Meetings 3 Meetings 1 Meeting 12 Meetings 1. Mr. Chaiwat Utaiwan Chairman 19/19 - - - - - - - 2. General Natthipong Pueksakorn Director 16/19 - 14/14 - 3/3 - - 1/1 3. Mr. Niphon Hakimi Director 11/19 22/25 - - - 7/7 3/3 - 4. Mr. Panu Uthairat Director 12/19 - 6/14 - 3/3 - - - 5. Mr. Montchai Ratanastien Director 19/19 23/25 - 7/9 3/3 7/7 3/3 - 12/12 6. Assoc.Prof. Pasu Decharin Director 9/19 - 14/14 - 1/3 - 1/3 1/1 7. Miss Piyawan Lamkitcha Director 15/19 14/25 - - - 7/7 3/3 1/1 8. Mr. Wittaya Chaisuwan Director 0/0 - - - - - - - 9. Dr. Pornchai Thiraveja Director 10/19 - - 7/8 - - - - 10. Mr. Vitai Ratanakorn Director 13/19 8/8 - 1/1 1/1 - - - 11. Miss Veena Techachainirun Director 14/14 17/17 - 8/8 2/2 - - - 12. Miss Angkana Sawatpoon Director 14/15 16/19 - 6/6 - - 2/3 - - Remunerations of the Bank’s Directors 2017 Name List ค่าเบีย้ ประชุม Relation Audit Risk CG & CSR Compliance President Nomination Total Monthly Board Executive Affairs and Remune- of Directors Subcommittee Subcommittee Management Subcommittee Subcommittee Nomination Subcommittee Subcommittee Remuneration Subcommittee rations of the Subcommittee Bank 1. Mr. Chaiwat Uthaiwan 240,000.00 150,000.00 2. Gen. Natthipong Pueksakon 120,000.00 120,000.00 150,000.00 3. Mr. Niphon Hakimi 120,000.00 92,500.00 4. Mr. Panu Uthairat 120,000.00 80,000.00 5. Mr. Montchai Ratanasatien Associate professor 6. Dr. Pasu Decharin 7. Miss Piyawan Lamkitcha 120,000.00 120,000.00 120,000.00 390,000.00 120,000.00 62,500.00 472,500.00 50,000.00 25,000.00 437,500.00 357,500.00 37,500.00 60,000.00 20,000.00 30,000.00 10,000.00 120,000.00 10,000.00 1,000.00 497,250.00 380,000.00 50,000.00 40,000.00 22,500.00 10,000.00 412,500.00 4,838.71 80,000.00 70,000.00 270,000.00 120,000.00 100,000.00 220,000.00 180,000.00 10,000.00 310,645.16 9. Dr. Pornchai Thiraveja 120,000.00 10. Mr. Vitai Ratanakorn 11. Miss Veena Techachainirun 90,000.00 90,000.00 12. Miss Angkhana Sawatpoon 90,645.16 80,000.00 Annual Report 2017 136,250.00 4,838.71 58 20,000.00 110,000.00 8. Mr. Witthaya Chaisuwan Total 150,000.00 80,000.00 120,000.00 110,000.00 Total Amount 2017 1,385,483.87 1,102,500.00 90,000.00 486,250.00 40,000.00 390,000.00 170,000.00 87,500.00 120,000.00 67,500.00 122,500.00 1,000.00 3,932,733.87
59. Remuneration of the Management for 2016 In fiscal year 2016 , compensation paid to the management, comprising Acting President and Executive Vice Presidents, consisted of salary, child support, child scholarship and the Bank’s contribution to provident fund in total amount of Baht 14,971,307.84. Headcount for 2017 Headcount Structure for 2016 Head Office Headcount Branch Headcount 994 710 Annual Report 2017 59
60. Conflict of Interest Prevention Policy The Bank intends to do business by adhering to the principle of good corporate governance in order to enhance the confidence of shareholders and all stakeholders by being transparent , fair, focusing on the performance of directors, executives and employees on the basis of integrity and due care, and mainly taking account of the interest of customers and the Bank. The Bank has issued the Regulations of Islamic Bank of Thailand No.23 (Amendment No.1) Governing Ethics of Director, Managing Director, Executives and Employees to Prevent Conflict of Interest B.E.2555, and has prescribed the work rules on reporting and review of disclosure of information about conflict of interest in accordance with the corporate governance principle. The Bank has also prescribed proper control and prevention of transactions with possible conflict of interest under good moral framework. This is considered as one of important ethics that directors, executives and employees shall strictly adhere to in order to be reliable and trustworthy for all stakeholders, as per the criteria, as follows: 6. Directors, President, and executives of the Bank shall not be directors, advisors, representatives, employees or workers and shall not be hired to work or to perform any services in state enterprises, juristic persons or financial institutions operating the same business to the Bank, or to operate any business that causes conflict of interest in his or her performance of duties, except for the performance of duties as assigned by the Bank or as representatives of state enterprise holding the Bank’s shares equal to no less than 25% of the registered and paid-up capital of the Bank. 7. Directors, President, executives and the related parties are prohibited to acquire securities of state enterprises or juristic persons with privileges given from the performance of such duties. 8. In case, the Bank has granted credit facilities to the top management (Executive Vice President and above) or related parties, including credit facilities granted to business having related interest, those directors or executives who are stakeholders 1. Directors, President, executives and all employees of the therein shall not participate in the consideration of such credit facilities. Bank shall fill in the form disclosing information of his or her existing or potential conflict of interest on an annual basis. 9. In case, an executive having duties relating to the credit facilitation is transferred to other regulatory unit, he or she shall 2. Newly appointed directors, President, executives or report such activities of credit facilitation under his or her previous employees of the Bank shall fill in the Form disclosing information responsibilities in the Form of Disclosure of Information of Conflict he or she has any conflict of interest on the date when the of Interest within 30 working days from the date when the transfer appointment takes effect. takes effects. 3. Any significant change in facts and circumstances in the Provided that the Bank requires the report relating to the review disclosure report shall be updated within 30 working days from the of conflict of interest of executives and employees of the Bank to date of acknowledgement of such facts and circumstances. the Audit Subcommittee and presentation of such report of conflict of interest of President and directors to the Chairman of the Board 4. Directors, President, executives and all employees of the of Directors of the Bank; whereas, the Bank is committed to Bank shall treat information of the customers and the Bank as ensuring that the executives and employees have better confidential and shall not exploit such secret for personal or third understanding, knowledge and awareness of “Conflict of Interest parties’ benefits. Prevention Policy” in order to correctly perform duties truly in compliance with the rules. 5. Directors, President, executives, employees of the Bank and the related parties shall not be parties to contracts with the Bank In 2017, the Bank has organized training on provision of which may cause conflict of interest, unless such contracts are knowledge relating to conflict of interest to executives and all made for service provision under normal transaction without any employees for acknowledgment and awareness of the importance abuse of authority. of the prevention of conflict of interest, and has completely and continuously publicized the Bank’s data and information under the Official Information Act B.E.2540 for the benefits of the public’s access to the Bank’s information. 60 Annual Report 2017
61. Internal Control Internal control is a tool that helps the management and is a fundamental mechanism to oversee operation and business activities in the organization to ensure that the operation is efficient and objectives are achieved . Internal control also helps prevent and protect the organization’s assets, enhance the optimum utilization of the organization’s resources and ensure that the operation processes are accurate and proper. 1. Internal Control System The Bank gives importance to setting up internal control system by adopting the framework of state enterprise internal control of the State Enterprise Policy Office (SEPO), Ministry of Finance, and the guidelines on internal control system set-up and assessment of the Office of the Auditor General, and the guidelines of the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The bank has also supervised and monitored continuously to ensure that the Bank’s operation will achieve the objectives efficiently and effectively, and that financial reports and operation are reliable, and that operation is in compliance with the law, and internal and external regulations as well as actions that may cause damage to the Bank’s assets and reputations are prevented. 2. Internal Control Structure The Internal Control Assessment Subcommittee consists of the top management of all departments and sections to monitor and supervise the overall internal control assessment in accordance with the State Audit Commission (SAO)’s regulations. The Audit Subcommittee has roles and duties to propose an appointment of a qualified auditor to the Board of Directors, to review and approve the charters and code of ethics of the Internal Control Department and the audit plans, and to supervise the work efficiency of the Internal Audit Unit, and to independently monitor the risk management and internal control. The Bank has assigned its executives at all levels to participate in and take responsibility for complying with the Bank’s internal control processes. The top management shall monitor the risk control self-assessment (RCSA) by means of review to ensure the adequacy and effectiveness of the internal control system and risk management of works within the scope of responsibilities. This is to gain reasonable confidence that the Bank is always capable of achieving the prescribed targets and objectives efficiently. The Bank has each department appoint the Risk-Internal Control Compliance Office (RIC Officer) with responsibility for risk-related coordination, internal control assessment and compliance with rules and regulations, including dissemination of related knowledge to employees. In addition, this participation is considered as part of operational risk management. 3. Major Internal Control Actions in 2017 Analysis of risk factors based on RCSA tools for planning of improvement of organizational internal control and plans or measures for improvement of internal control that still has some issues at the level of internal control sub-divisions. Preparation of reports on internal control assessment in accordance with the SAO’s regulations, Article 6, at sub-division levels (Form Por.Yor.1 and Form Por.Yor.2) and at levels of audited departments (Forms Por.Or.1, Por.Or.2 and Por.Or.3); whereas, all documents have been provided as information for all related personnel, and reports have been prepared and submitted to the Internal Control Assessment Subcommittee for acknowledgment of the monitoring of assessment. Determine measures to prevent, correct and improve work processes, and to enhance effectiveness and efficiency for the issues regarding governance, risk management and compliance (GRC) that some offices and branches have not been in compliance with the regulatory requirements and the Bank’s rules. Workshops on risk control self-assessment (RCSA) for RIC Officers nationwide. Annual Report 2017 61
62. Complaints Handling Center The Bank has assigned the Complaint Handling Section , Sustainable Organizational Development Office, to be a center for complaint and inconveniences management regarding any inconvenience or delay from the Bank’s products or services. The Bank’s service recipients, customers or customers’ representatives or the Bank’s employees or workers may report or file complaints or notify any complaints or inconveniences to the Bank through 10 Complaints Handling Centers, including: 1) Complaint boxes at the Head Office; 2)Letters; 3)E-mail; 4) Letters from the Bank’s regulatory government agencies or other related agencies; 5) Statements in mass media such as newspapers of which sources and facts of complainants can be checked; 6) Bank’s call center; 7) Complaint web portal of the Office of the Prime Minister; 8) E-Complaint IBank; 9) Complaints in person; 10) Other channels Information Disclosure Channels: Annual report: disclosing the organization data, operating results, good corporate governance, auditor’s report and financial statements, etc. The Bank’s website (www.ibank.co.th): disclosing the Bank’s information such as organizational information, annual reports, products, services, procurement, etc. 62 Annual Report 2017
63. Annual Report 2017 63
64. Risk Management 1 . Risk Management Overview The business of Islamic Bank of Thailand has been operated in the midst of the changing business environment and globalization, including technologies, competition situations, rules and regulations; therefore, the risk management is a necessary management process and is important to lead the organization to achieve the prescribed goals. Therefore, the effective and efficient risk management system shall reflect good and accountable management which is a main foundation for secure and sustainable growth of the Bank. Islamic Bank of Thailand has been aware of risk management and internal control and has given importance to good management process and effective achievement of the prescribed goals. Under the strategic plan of reorganization and business plan of 2017-2021, the Bank has carried out the enterprise risk management (ERM) as per COSO ERM Framework which is a risk management process under the universal principles consisting of main principles, i.e., the linkage of risk management process and the operation plan and business opportunities of the Bank which helped integrate the risk management covering the entire organization. As a result, the Bank is able to achieve the main objectives of the organization as per the risk management process under the universal principles, and the Bank is able to achieve the main objectives of the organization as per the prescribed vision and mission by means of provision of a risk map of 2017, key risk indicators (KRIs), risk appetite, and risk tolerance, covering main risks of the Bank. In addition, the Bank has organized training and provided knowledge on the risk management overview of the organization to employees at all levels to establish awareness and common understanding that the risk management is a related matter and responsibilities of all employees. The operation of work with awareness of responsibility for risk management will help support all units to achieve the goals of the organization more effectively and efficiently and in line with the management under the good corporate governance principle which will help the Bank grow in a secure and sustainable manner. 64 Annual Report 2017
65. 2 . Risk Management Structure The governance structure is classified, as follows: 2.1 Policy. The Board of Directors of the Bank has powers to approve significant risk management policies of the Bank such as credit risk management policy and guideline, market risk management policy and guideline, liquidity risk management policy and guideline, operational risk management policy and guideline, and strategic risk management policy and guideline, including Shariah risk management policy and guideline. 2.2 Powers. The Board of Directors of the Bank has powers to approve the acting authority of executives and subcommittees with proper distribution of the approving powers and risk-based authority. 2.3 Subcommittees Related to the Risk Management Roles and duties of subcommittees related to the risk management include the approval of risk appetite and supervision of effective risk management system, as follows: 1. Risk Management Subcommittee shall be obliged to determine the risk management policy and to review the adequacy of the risk management policy and system, and to determine strategies in line with the risk management policy, and to supervise the overall risk management of the Bank. 2. The Audit Subcommittee shall be obliged to review the internal control system and good risk management to ensure that the internal control and risk management system will prevent or reduce potential risks and there will be adjustment to be proper to risks and environment of business operation. In addition, for each type of risk management, the Bank has also established subcommittees for specific risk management including the Assets and Liabilities Management Subcommittee (ALCO), the Deposit Return Review Subcommittee, the Internal Control Assessment Subcommittee, the Credit Subcommittee, the Debt Restructuring Subcommittee, the Crisis Management Subcommittee (CMC), and the IT Steering Subcommittee, etc. Annual Report 2017 65
66. 3 . Risks and Risk Management Measures 3.1 Shariah Risk means risks resulted from operation, process of offering of products and services of the Bank that may not in compliance with the Shariah Principle as prescribed by the Advisory Council of the Islamic Bank of Thailand (Shariah) and/or may be in contrary to the Islamic Bank of Thailand Act B.E.2545, and may affect the status, reputations, liquidity, incomes and capital which are regarded by the Bank as the specific risk and of the most importance and part of operational risk as specified by the Bank’s audit guidelines. The ensure the Bank’s performances and operations in all processes are in compliance with the Shariah Principle, the Bank has therefore determined policy and guidelines for Shariah risk management, approved by the Board of Directors, to be the framework for operation regarding Shariah risk management. However, the provision of financial services and development of products and services under the Islamic Rules is competitive and meets the demands of target customers. There are still some restrictions in terms of tax, duty and fees which affect the Bank’s cost of operation. Therefore, to ensure that all actions and operations shall be in compliance with the Shariah Principle in all processes, the Bank has put in place Shariah risk control by analyzing, monitoring and reporting Shariah risk-related information such as Shariah risk status, movement of deposit customers and Muslim customers, and possible damage from non-compliance with the Shariah Principle. These reports are presented to the related committees such as the Advisory Council of the Islamic Bank of Thailand (Shariah), the Risk Management Subcommittee, the Audit Subcommittee, and the Board of Directors, as the supporting information for determination of Shariah risk management strategies. In addition, the Bank has given importance to the training and provision of knowledge on the Shariah Principle for all employees through its internal communication channels so that the Bank’s employees would have good knowledge and understanding and be able to perform their duties duly in accordance with the Shariah Principle and be able to communicate with customers to understand the Shariah Principle adhered by the Bank to its operation at the same standard level. 3.2 Strategic Risk means the risk resulted from the determination of strategic plans, operation plans and 66 Annual Report 2017 implementations that are improper or not in conformity with internal factors and external environment, affecting the Bank’s incomes, capital or corporate existence. According to situations in the previous year, the Bank was affected by the internal and external environment, including competition situation, behavioral change of target customers, technological change, economic factors and requirements of the authorities, adequacy and quality of information and personnel, etc., and causing strategic risk factors which would affect the Bank’s business operation plan. The Bank has prepared its operations to reduce strategic risks resulted from those risk factors by means of adjustment of strategic planning process and provision of its clear and proper operation plan covering potential risks. Regarding the Bank’s operation relating to strategic risk management, the Bank has provided the strategic risk management policy and guidelines and the annual risk management plan in line with the reorganization strategic plan and business plan of 2017-2021. The principle of good risk management has been applied as framework of integrated organizational risk management structure under the international standard and in accordance with guidelines of the Committee of Sponsoring Organizations of the Treadway Commission (COSO) to the analysis of internal and external risk factors which may affect the Bank’s current and future operations. In addition, the Bank’s strategic risk management is subject to the supervision of the Board of Directors and related subcommittees; meanwhile, the risk management plan provision and review process and risk management guideline is subject to the supervision of the Risk Management Department that shall present the matter to the Risk Management Subcommittee for approval and screening of appropriateness of issues and shall propose the matter to the Board of Directors for approval in hierarchical order. In the past, the Bank has provided the risk management plan and risk map to identify risk factors which affected the Bank, and determined KRIs, risk appetite, risk tolerance covering all risk factors and risk causes to follow up the result of risk management at the level acceptable to the Bank and in accordance with the target of the work plan and to determine and review measures under the Treatment Plan, thus, to be able to control operations in accordance with the target of the work plan, and the Risk Management Department shall be obliged to continuously follow up, assess and report the risk management result to the Risk Management Subcommittee and related subcommittees.
67. The Bank has also organized training to build up knowledge and understanding on risk management for employees so that they would be able to take part in assuming responsibilities for risk management of the Bank and to support organizations to operate work and to achieve the target efficiently and effectively ; at the same time, the management shall be in accordance with the good corporate governance principle, which shall help the Bank grow in a secure and sustainable manner. 3.3 Credit Risk means risks of damage arisen from the contractual party’s failure to comply with the agreed obligations in the contract, including the downgrade of risks of trading partners of the Bank which may affect the Bank’s income and maintenance of the Bank’s capital. Provided that, in the credit risk management, the Bank has given importance in the following issues: (1) Credit risk management policy and guidelines The Bank has determined the framework of credit risk management policy in line with the guidelines of external regulatory bodies, based on the balance between business roles and duties, credit risk and supervision in accordance with rules and regulations. The focused objective is to ensure credit personnel have the same and collective goals, i.e., credit expansion under acceptable risks and transparency, with the ultimate goal of quality credit management and effective monitoring and control process. In addition, the Bank has determined the operational standard on credit facilitation in the same directions, with the development and improvement of the criteria, roles, duties, responsibilities, and credit facilitation structure to be in conformity and systematically connected under the credit process improvement project. In addition, the Bank has also organized training to promote credit knowledge to the related employees in order to improve knowledge and develop skills at the level proper to customers requiring continuous supervision. As of 31st December 2017, the Bank had “NPF” of general credit and project credit under the public policy as per the Bank’s Separate Financial Statements, amounted to 11,052.38 million Baht, decreased by 42,675.72 million Baht from the total amount of 53,728.10 million Baht of NPF in 2016, equal to 24.98% of the total credit (equal to 57.47% in 2016); whereas, the total amount of credit of the Bank has decreased significantly because, the Bank has transferred non-performing financing (NPF) to the Islamic Asset Management Limited, amounted to 49,049.87 million Baht. Credit Risk Management Tools The Bank has provided tools for customer credit risk assessment and credit distribution, and has fixed the rate of return in line with the risk of each customer group. The Bank has applied the credit scoring system to customers of consumer products and has merged SMEs Ezy system with Credit risk Rating (CRR) for businesses with the credit limit of not exceeding 20 million Baht, and has also applied the Credit Risk Rating system to credit customers with the amount of not less than 20 million Baht. Provided that the Bank has developed the Credit Risk Rating (CRR) system to accurately separate the credit risk assessment form for customers into 5 business types, as follows: 1.Credit Scoring for business customers applying for credit facility limit up to 20 million Baht (E); 2. Credit Risk Rating for SMEs Customer (S); 3. Credit Risk Rating for Corporate Customer (C); 4. Credit Risk Rating for Hotel Business Customer (H); 5. Credit Risk Rating for Real Estate Customer (R); (2) Credit Quality The Bank has given importance to the management of quality of new credit facilities granted in 2017 with due care and has a close post-review monitoring with regular credit quality examination in order to prevent normal accounts from becoming troubled loans, emphasizing the reduction of NPF by expediting debt restructuring, legal action and execution with troubled loans, as follows: 1. Determine clear measures to enforce uncooperative debtors in negotiation or those having undergone several debt restructuring programs such as legal action and filing for bankruptcy; 2. Having credit facilitation units visit/call customers regularly to increase utilization of customers in good standing, and monitor customer’s operating results in order to adjust credit conditions in accordance with customers’ incomes and circumstances in order to prevent them from becoming NPF and to generate more incomes from customers in good standing; 3. Having credit facilitation units report reasons and guidelines for handling with all B2 and watch list customers in the group of Annual Report 2017 67
68. large business customers and SMEs that would be potentially downgraded to NPF and could not expedite preventing and correcting the situation , and executives of sections/departments/ working groups shall take first priority to follow up and correct for normal situation. 4. Credit facilitation units shall monitor TDR customer groups or those requesting for indulgence credit conditions or for indulgence of debt repayment with change of financial status, current business status which may potentially become NPF in the future because it may affect the Bank’s operation. 5. Expedite the distribution or assignment of internal employee groups to units responsible for management/correction of troubled credit in order to expedite the correction of NPF, and provide action plan and training to provide necessary knowledge, skills and correction method for NPF. 6. The debt quality development unit should closely, systematically and continuously follow up and collect data and find causes of NPF re-entry and data of recovery rates. (3) Credit Concentration Risk Guidelines have been determined in the Bank’s credit policy to oversee credit concentration risk in line with the regulatory requirements regarding corporate customers, which put credit limit for Single and Group Exposure Limits, and Sector Limit to control and avoid significant credit concentration. The Bank has exercised caution on financing new customers in industries having concentration rate equivalent to or higher than the risk appetite (RA), and has kept monitoring closely the credit concentration risk. As of the end of 2017, the Bank’s loans for industries were mostly granted to the manufacturing sector. 3.4 Market Risk means financial risk resulted from the sensitivity and fluctuation of rates of return risk, foreign exchange rates and instrument prices in money markets and capital markets which have negative impact on the Bank’s income and capital. Market risks can be divided into 3 types, including: Rate of Return Risk “Rate of Return Risk” is the risk that the Bank’s income or capital would be subject to negative impact from changes of the rate of return of items of assets, liabilities and rate sensitive items 68 Annual Report 2017 and may affect the net profit income, trading accounts, and incomes and other expenses related to the rate of return such as credit facility fees, deposit service fees, and provisions expenses, etc. Foreign Exchange Risk “Foreign Exchange Risk” is the risk that the Bank’s income or capital would be subject to negative impact from fluctuation of exchange rates, including risk from business transaction in foreign currencies, risk from having assets or liabilities in foreign currencies, transaction risk, and translation risk. Price Risk “Price Risk” is the risk that the Bank’s income or capital would be subject to negative impact from changes of prices of debt instruments and equity instruments, resulting in the Bank’s devaluation of investment ports for trading and available for sale and for profit-making purpose. The Bank has provided the market risk management where the Board of Directors has delegated authority to the Assets and Liabilities Management Subcommittee to determine strategies, guidelines and operation to manage liquidity risk, rate of return risk and market risk in conformity with the Risk Management Subcommittee’s policy. The Bank has focused on managing the market risk to reduce impact on the Rate of Return Risk because it is the root cause of the Bank’s market risk. In addition, the Bank has determined the policy framework, measures and tools for market risk management, including control, risk assessment and monitoring of critical risk that may affect the Bank to ensure that the market risk management shall be effective and in conformity with the changing internal and external circumstances or risk factors. Major activities in the market risk management are as follows: 1. Determination of policies related to the market risk management, including: Market risk management policy and guidelines as a framework for market risk management Review of market risk triggers and risk limit to suit the changing situation 2. Provision of tools for market risk measurement and assessment: Asset and Liability Management (ALM) System for data warehouse which covers Re-pricing Gap Analysis to analyze the
69. rate of return risk in each period of time and assess possible impact that may arise from NPI Effect and /or EVE Effect. Value at Risk (VaR) to assess risk of possible loss in the Bank’s investment portfolios with regular back testing of VaR tools Market risk assessment based on trigger and risk limit covering cause of market risk, including rate of return risk, foreign exchange risk, gap limit, position limit and VaR limit, etc. 3. Market risk monitoring and report: Monitoring of critical risk factors that may have direct and indirect impact on the market risk, e.g. economic trend, sensitivity and fluctuation of rate of return in money market, and of foreign exchange rate Monitoring and report related to the market risk, e.g. report on the market risk status, report on market, risk limit and trigger, etc., by directly reporting to the Board of Directors, the Risk Management Subcommittee, the Assets and Liabilities Management Subcommittee, and the management on a regular basis so that they can determine and readjust strategies at hand in an efficient manner. In order to provide efficient management of the market risk and in conformity with the changing situations, the Bank has regularly reviewed the tools, policy and guidelines for management of the market risk, including the risk limit of the Bank. 3.5 Liquidity Risk means the risk resulted from the Bank’s failure to pay debts and to comply with obligations when they become due because the Bank is unable to convert its assets into cash or to secure sufficient funding, or secure funding at the cost exceeding the risk appetite, which may affect the Bank’s current and future income and capital. In addition, the liquidity risk also resulted from the Bank’s failure to unwind or offset the existing risk from the assets held, forcing the Bank to sell assets at the price lower than the acquisition cost because such assets held had low liquidity or the market was in disruption mode. The Bank, by the Board of Directors, has delegated authorities to the Assets and Liabilities Management Subcommittee to determine strategies, guidelines and operation regarding liquidity and rate of return risk management, and to manage market risk in conformity with policy of the Risk Management Subcommittee. Liquidity risk management has been determined to be continuing operation to ensure that the Bank’s liquidity is sufficient to support the Bank’s business operation in normal circumstances and crisis under appropriate cost and with capability to meet financial obligations and in accordance with the policy framework and guidelines for liquidity risk management and under the risk appetite. The Bank has determined the policy framework, measures and tools for proper management of the liquidity risk as well as monitoring of the liquidity risk management as summarized below: Major activities in the liquidity risk management are as follows: 1) Determination and review of policies related to the liquidity risk management, including: Review of the liquidity risk management policy and guidelines as a framework for the Bank’s liquidity risk management; Review of determination of liquidity risk triggers and risk limit to suit the changing situation; 2) Provision of tools for liquidity risk measurement and assessment: Report on cash flow analysis and liquidity status in each period of time (maturity gap); Liquidity risk assessment based on trigger and risk limit, for example: (1) Net Liquidity Assets to Net Liquidity Gap Ratio (2) Financing to Deposit Ratio (F/D Ratio) (3) Concentration ratio of corporate deposit (4) Liquidity coverage ratio Assessment of liquidity adequacy to assess the Bank’s capability in scenario analysis, e.g. continuous withdrawal from corporate deposit accounts, etc. Assessment of impact from credit risk factors and reputation risk factors on the liquidity risk; 3) Liquidity risk monitoring and report: Monitoring of critical risk factors that may have direct and indirect impact on the liquidity risk, e.g. economic trend, liquidity of commercial bank system, change of rate of return in money market, competition of products and services among financial institutions, etc. Monitoring and report related to liquidity risk, e.g. report on the liquidity risk status that may the liquidity risk, operation as per the liquidity risk limit, trigger, and mismatch fund, etc. The reports are submitted to the Board of Directors, the Risk Management Subcommittee, the Assets and Liabilities Management Annual Report 2017 69
70. Subcommittee , and executives of the Bank on a regular basis to ensure efficient risk management. In order to provide efficient management of the liquidity risk and in conformity with the changing situations, the Bank has regularly reviewed the tools, policy and guidelines for management of the liquidity risk, including the risk limit of the Bank. 3.6 Operational Risk means the risk resulted from the lack of good corporate governance in the Bank’s internal operation process, personnel, work systems or external events that may affect the Bank’s operating income and capital, including the legal risk but excluding strategic risk and reputation risk. In managing the operational risk, the Bank has required the risk identification, risk assessment, risk monitoring, risk reporting, and risk control and reduction in accordance with international standard, and to comply with the Islamic Bank of Thailand Act B.E.2545, the Bank has given the highest priority to the development of Shariah risk management system as it is the Bank’s major risk most likely to occur in business operating processes, service provision and especially in the launch of financial products in accordance with the Shariah Principle. The provision of policy on the operational risk management is used as a tool in determining the scope of operation and guidelines for operational risk management of the Bank, with an emphasis on the effective creation and development such as the business continuity management policy, business continuity plan, outsourcing service policy, reporting of events of damage, and testing of data and system recovery plan in case of occurrence of natural disasters, etc. In the capacity of a state enterprise under the supervision of the Ministry of Finance and audit by the Bank of Thailand, the Islamic Bank of Thailand has to maintain the capital adequacy of not lower than 8.5% as per the Ministerial Regulations Governing the Maintenance of Capital Adequacy. Nevertheless, the problem of credit quality has forced the Bank to set aside additional provisions resulting in a negative BIS ratio, lower than the requirements under the Ministerial Regulations Governing the Maintenance of Capital Adequacy. However, the Bank has determined the strategic plan of reorganization and business plan of 2017-2021 as guidelines for problem solving of the Bank’s operation. 4. Improvement of the Credit Facilitation Process The Bank has improved the credit facilitation process by using the guidelines of Ernst & Young, consisting of 3 components, as follows: 1. Structure of the Credit Facilitation Unit. The Bank has improved the structure of the Credit Facilitation Unit divided into 2 main units; whereas, the Credit Facilitation Unit (RM) and the Credit Analysis Unit (CM) shall be merged as one unit in order to reduce redundancy in the credit analysis and consideration, and the Credit Risk Management Unit (CR) shall be the credit screening unit for check and balance before submitting for approval. 2. Process of credit operation shall be divided into 2 steps: 2.1 Process of operation prior to credit approval: The process of price estimation has been developed and improved by adding the internal appraiser; meanwhile, powers shall be distributed, and roles and duties shall be increased for the certifier of cost estimate, and tools for credit risk assessment shall be improved, as well as Capital Adequacy the rules and regulations relating to credit facilitation in conformity “Risk on Capital Adequacy” means the risk of potential with the actual operation, and the powers of credit approval shall inadequacy of funds for business expansion, handling with be improved, and powers of credit review shall be distributed under unexpected loss and rules and regulations of the authorities and the criteria prescribed by the Bank. other changing environment that cannot be controlled by the Bank. 70 Annual Report 2017
71. 2 .2 Process of operation after the credit approval: The standard 3. Form of Business Credit Application Development and contracts shall be improved by reducing types and the number of credit screening (standard credit and credit under the Product pages of contracts, including the supporting documents and the Program), review of credit limit and credit screening to reduce the document storage system in strong room (DWS) shall be developed data redundancy. by means of scanning the source contract documents and increasing roles and duties of the Credit Settlement Officer. Annual Report 2017 71
72. Internal Audit “Internal Audit” provides assurance by means of systematic examination of efficiency and effectiveness of internal control processes, good governance, risk management and other operations of the Bank, and also reports the operating result and provides fair and independent advice to increase value and to enhance the Bank’s operation to efficiently achieve the prescribed targets or objectives. Internal audit adheres to the international standards for the Professional Practice of Internal Auditing and the State Enterprise Internal Audit Manual B.E.2555 by dividing into 6 items, as follows: 1) Qualifications of the Internal Auditor • In overall, internal auditors shall have various fields of knowledge and skills and expertise in skills necessary for the Bank; • Internal auditors are regularly rotated and consideration is taken to transfer staff members from other units in the Bank to perform the audit work; • Recruitment plan and annual training plan are prepared to ensure that training courses are provided to fill in the competency gap, and the internal auditor shall receive regular development; • Internal auditors are encouraged to develop themselves in order to obtain professional certificates required. At present, internal auditors hold one certificate, i.e., Certified Public Accountant (CPA) License; 2) Structure of the Internal Audit Department • The Internal Audit Department shall be independent and shall directly report to the Audit Subcommittee and the President relating to the operation of the Internal Audit Department. • The Internal Audit Department shall have disclosure policy or actions to prevent or avoid impact on independence and fairness as well as any possible conflict of interest of internal auditors. 72 Annual Report 2017
73. Auditing activities always have written records . • Entitlement to access data and documents 3) Relationship with the Management • Interview/discuss with the top management, the President, and the Audit Subcommittee about the business, risk, and internal control to take account of the comments to prepare the audit plan, and evaluate the appropriateness and adequacy of the Bank’s corporate governance whether the management is efficient and being able to achieve the prescribed objectives and targets. • Liaison and discuss with external regulatory agencies such as the Office of the Auditor General of Thailand and the Bank of Thailand about the scope and guidelines for audit activities to prevent redundancy of work, discuss about significant observation or suggestion that are still open, and respond to the observations or suggestions of the Bank of Thailand and the Office of the Auditor General of Thailand. 4) Duties and Responsibilities • Provide regulations, charters, rules, guidelines and manuals for audit operation in accordance with the State Enterprise Audit Manual, communicate with the top management, the Board of Directors and related parties to ensure their understanding on the internal audit, the code of ethics, and performance standards via the meetings and Intranet. • Have roles to audit especially in issues having significant risks and impact on the Bank’s strategic objectives; • Have responsibilities for prevention of fraud by reviewing and accessing the adequacy and effectiveness of internal control as well as the Bank’s risk management; • Conduct annual review on business ethics, disclosure of conflicts of interest of the Bank’s employees and executives of the Bank; Annual Report 2017 73
74. • Provide advice, recommendation and related services to executives and business units with objective to increase value, improve the risk management process, and corporate governance of the Bank, without taking responsibilities in the capacity of executive. 5) Operation and Reporting Operation • Provide the strategic audit plans of 2017-2021 including the systematic risk assessment for risk prioritization in the audit plan in conformity with resources of the Internal Audit Department and in accordance with risks, objectives and targets of the Bank and its plan, ensure the procedures of resource allocation for operations based on risk levels and identify man-days in each year. • The annual audit plan for 2017 is related to the strategic audit plan, objectives and risks of the Bank, and combined with guidelines of the Significant Activity Approach of the Bank of Thailand. The audit plan in details will be prepared based on risk, with the risk assessment and control as per the activities’ characteristics in every step. Activities are divided into core activities and support activities. The operation flows and control points in each step are clearly shown. Provision of advice and suggestion is also included in the plan with clear proportion of each work type. • Audit issues regarding information technology are clearly determined in the plan in accordance with the Bank’s objectives and targets, risk and the Management]s requirements. • Evaluate the adequacy and appropriateness of resources, guidelines for resource management, and budgets of the Internal Audit Department in conformity with the audit plan and the existing resources; • The Management provided comments on the preparation of strategic audit plan which was approved by the Audit Subcommittee and proposed for the Board of Director’s acknowledgment. In addition, discussion was made among the related parties before starting the audit activities. • Compliance with suggestions has been monitored systematically and reported to the Audi Subcommittee, executives, the Board of Directors and related regulatory bodies; • Changes and assessment of risks encountered by the Bank have been monitored at all times. The audit plan has been timely reviewed and adjusted for conformity as may be necessary and appropriate. 74 Annual Report 2017
75. Reporting • Provide a standard format for reporting of the audit result which has been approved by the Audit Subcommittee • A close meeting has been conducted with the audited business units and related parties. The final audit report with suggestions for improvement has been presented to executives, the audited units, the Audit Subcommittee and the President after the close meeting within the prescribed period of time. • Regularly report the result of monitoring of progress of compliance with suggestions of the Internal Audit Department and the Audit Subcommittee; 6) Maintenance of Internal Auditors’ Work Quality • Evaluate the performance of the audit team and receive opinions of the audited units regarding the operating result after the end of every operation. Opinions of the audited units are taken into consideration for continuous improvement of operation and measuring of performances; • Establish a working group to officially evaluate the quality of audit work by itself. In at least every 5 years, a third party should be outsourced to conduct an audit quality assessment. The assessment result should be used for analysis to reduce the gap between the performance and the standard of good audit. Strategic plan should also be prepared to improve the annual audit performance in conformity with the self-assessment of the audit quality and assessment conducted by the third party. • Review and improve regulations, manuals and operational guidelines in conformity with the changing work environment of the Bank as reviewed and approved by the Audit Subcommittee. • Determine guidelines for careful performance of duties by taking account of sufficient awareness of responsibilities for performance of duties as professionals would do; and have guidelines for performance of duties with clear explanation and elaboration. Necessary works are considered and recorded to ensure that the audit objectives are met. Significant facts are disclosed in a report to prevent misunderstanding or misleading to any concealment of legal offences. Regarding the compliance with all 6 items of these guidelines, the internal auditors shall adhere to the Four Business Ethics, namely, integrity, fairness, confidentiality and work abilities. Annual Report 2017 75
76. Report of the Audit Subcommittee The Board of Directors of Islamic Bank of Thailand passed a resolution to appoint the Audit Subcommittee consisting of members , as follows: As per Order No.Gor.019/2557, the following members were appointed on 21st August 2014 until present: General Natthipong Pueksakorn Chairman Mr. Panu Uthairat Member Assoc.Prof. Pasu Decharin Member As the Board of Directors of Islamic Bank of Thailand passed a resolution to appoint the Audit Subcommittee on 21st August 2014, having the Head of the Internal Audit Department as Secretary to the Audit Subcommittee. At least one member of the Audit Subcommittee of Islamic Bank of Thailand shall have adequate knowledge and experiences to review the reliability of financial statements. The Audit Subcommittee has performed its duties under the scope of responsibilities as specified in the Charter of the Audit Subcommittee and assigned by the Board of Directors and in conformity with Regulations of the Ministry of Finance Governing the Audit Committee and Internal Audit Units of State Enterprises B.E.2555. In 2017, the Audit Subcommittee held 14 meetings to consider various matters such as supervision of compliance as per observations and suggestions of the Internal Audit Department and of third-party compliance units, to review and approve charters, regulations and work manuals of the Internal Audit Department, structure of the Internal Audit Department, audit plans and budgets, and performance effectiveness of the Internal Audit Department, etc. The Audit Subcommittee had discussions with the Bank’s management to consider the draft financial statements, conflict of interest, risks, internal control system, and follow-up of progress of significant issues. The Audit Subcommittee also held meetings with external auditors, i.e., the Office of the Auditor General of Thailand and the Bank of Thailand to consider internal control system and observations from the audit conducted by both agencies. The operating results have been regularly reported to the Board of Directors and the results of every meeting have been reported to the Board of Directors as summarized below: 76 Annual Report 2017 Review of Financial Statements The Audit Subcommittee reviewed the financial statements before and after the auditor’s quarterly an annual review, together with the Internal Audit Department, the auditor, executives from the Accounting Department, and the Bank’s executives. The review was made in different issues having impact on financial statements, for example, accuracy of financial statements, significant accounting adjustments, changes in accounting standards, provisions and notes to financial statements. The Audit Subcommittee also provided observations and suggestions to ensure that the accounting system and financial reports prepared were in accordance with the financial reporting standards and there were sufficient and complete while disclosing reliable data. Review of Risk Management and Internal Control The Audit Subcommittee reviewed and monitored the risk management by holding meetings with executives and the Risk Management Department to ensure that the risk management was proper and efficient within the Bank’s risk appetite. The Audit Subcommittee also reviewed the internal control system from audit reports of the Internal Audit Department, risk management reports of the Risk Management Department and third-party compliance units, as well as reports on the Bank’s internal control assessment, internal control self-assessment form and internal auditor’s internal control assessment form as per the Regulations of the State Audit Commission to ensure that the Bank’s internal control system is consistently appropriate and adequate. The Audit Subcommittee also sought guidelines for risk
77. prevention or reduction to be within the Bank ’s risk appetite with Subcommittee was efficient and achieved the prescribed objectives no impact on the Bank’s operation. as per the Good Practice on Maintenance of Quality of Work of the Audit Subcommittee in the Work Manual of the Audit Committee Compliance with Regulations in State Enterprises (Revision) B.E. 2555. This was to ensure that The Audit Subcommittee reviewed the compliance with the Audit Subcommittee’s operation was in accordance with the regulations together with executives regarding significant prescribed objectives in the Charters of the Audit Subcommittee. management-related issues that might affect the Bank to ensure that the Bank strictly complied with the law, rules, regulations and Report on the Audit Subcommittee’s Performance official requirements. The Audit Subcommittee prepared a performance report and presented it to the Board of Directors on a quarterly basis, except Internal Audit Supervision for the performance report in the 4th quarter which was prepared The Audit Subcommittee reviewed, approved, and endorsed as annual performance report and submitted to the Ministry of the revision of charters and work manuals of the Internal Audit Finance within 90 days from the year-end date. Department to consider the appropriateness, scope of operation, rights, duties and independence, and also approved the strategic Auditor Appointment audit plans consisting of long-term audit plan, annual audit plan, The Audit Subcommittee proposed the appointment of the operational plan, human resource management plan, resource Office of the Auditor General of Thailand as auditor and the audit adequacy assessment, and annual budget. The Audit fee to the Board of Directors to consider, and proposed the matter Subcommittee also followed up the operational progress to ensure to the shareholders’ meeting for approval. the compliance with the approved audit plan, and approved the audit plan adjustment, and created confidence in the internal audit The Audit Subcommittee has performed its duties with due by providing internal audit quality assessment, and promoting and care, independence and has been able to express opinions without supporting the continuous development of skills and capacities of limitation and in an equitable and accountable manner as per the internal auditors to obtain professional certificates. good corporate governance principles to ensure that the Islamic Bank of Thailand can move forward in a sustainable manner. Transactions with Potential Conflict of Interest and Ethics The Audit Subcommittee reviewed the annual report on General disclosure of conflict of interest and ethics to ensure that the operation did not cause any conflict of interest as defined in the (Natthipong Pueksakorn) Chairman of the Audit Subcommittee regulations and that it was good governance as per the criteria and guidelines on Business Ethics of Directors, President and Executives of the Bank in order to prevent any potential conflict of interest and to be in accordance with the guidelines of the State Enterprise Policy Office (SEPO). Self-Assessment of the Audit Subcommittee The Audit Subcommittee reviewed and revised the Charter of the Audit Subcommittee and provided self-assessment at least once a year to ensure that the operation of the Audit Annual Report 2017 77
78. Report of the Nomination and Remuneration Subcommittee Since the Bank is aware of the importance of nomination and remuneration of directors and the top management , the Board of Directors has therefore appointed the Nomination and Remuneration Subcommittee consisting of 3 independent directors with main duties of nomination of qualified candidates to be appointed as members of the Board of Directors, members of subcommittees and the top management from Executive Vice President and above, and determination of remuneration of members of the Board of Directors and the top management from Executive Vice President and above, to be proposed to the Board of Directors. In 2017, the Nomination and Remuneration Subcommittee has held 10 meetings to perform the assigned duties; whereas, actions which have been considered and endorsed by the Board of Directors were as follows: 1. Consider the criteria and method of nomination and proper employment conditions for the top management (employment contracts), Senior Executive Vice President and Executive Vice President; 2.Consider the criteria and method of determination of remuneration for executives who are offered with job placement, appointment or promotion for new executive group in the positions of Senior Executive Vice President and Executive Vice President; 3. Interview candidates for the positions of Senior Executive Vice President and Executive Vice President; 4. Consider, select, and nominate qualified candidates to be appointed as Senior Executive Vice President and Executive Vice President from qualifications, knowledge, abilities, skills, experiences, diversified expertise, leadership, as well as vision and positive attitudes towards organization, state of having virtue and merit which is beneficial to business operation of the Bank and effective management. 5. Consider the criteria and method of performance appraisal, key performance indicator (KPIs) of the Bank’s executives as per the employment contracts and executives at the level of Division Director and above, except for the position of the President. 6. Consider and approve the performance appraisal result in 2017 of the Bank’s executives as per the employment contracts and executives at the level of Division Director and above, except for the position of the President. The Nomination and Remuneration Subcommittee has continuously performed duties as assigned, and reported the result of meetings to the Board of Directors. In 2017, the Nomination and Remuneration Subcommittee has performed duties with due care, transparency, and independence by taking account of the optimum benefits of the Bank and all stakeholders, and had commitments to perform duties on the basis of equality, fairness, and transparency in accordance with the good corporate governance principle. General (Natthipong Pueksakorn) Chairman of the Nomination and Remuneration Subcommittee 78 Annual Report 2017
79. Report of the CG & CSR Subcommittee The CG&CSR Subcommittee has its powers, duties and responsibilities under the CG&CSR policy and operational guidelines to be in accordance with the code of ethics of Islamic Bank of Thailand. In addition, mission has been adjusted to be in conformity with the changing situations in order to improve the Bank’s image to ensure that activity plans would be in the same directions with the reorganization plan. Therefore, the duty of good corporate governance of the CG&CSR Subcommittee played a significant role in creating confidence and reliability to the public in terms of management of good corporate governance for transparency and accountability and in compliance with the criteria of the Official Information Act B.E.2540. In 2017, the Bank has carried out activities, as follows: In 2017, the CG&CSR Subcommittee approved the CG&CSR operation with significant activities, for example, continuous and consistent provision of knowledge on corporate governance via the Bank’s intranet and email system, including the dissemination of information on the good corporate governance policy, the Bank’s codes of conduct and ethics via the Bank’s website and training on corporate governance under the title “Confident in Shariah, Trust iBank”. There was coordination and arrangement of a co-project with the Office of National Anti-Corruption Commission to assess integrity and transparency in state-owned agencies. In addition, measures and mechanisms were developed, improved, and increased in response to the Evidence-based Integrity and Transparency Survey Form in the Fiscal Year 2017 to be prepared for the adjustment of internal working process and impressive customer service, and resulted in the very high scores of integrity and transparency of operation assessment in the upcoming Fiscal Year 2017. The above-mentioned activities were regarded as fulfillment of CG&CSR mission and response to the policy that the Board of Directors has assigned the CG&CSR Subcommittee to supervise completely in accordance with the objectives under the implementation of activities under the Reorganization Plan of the Bank. In 2017, it would be more challenging for the synergy of executives and employees of Islamic Bank of Thailand to integrate their full efforts and abilities in performance of duties under the rules, regulations with transparency and accountability of operation in terms of internal operation and service provision to customers, the public, and Muslim people to create impression, reliability, and good image of Islamic Bank of Thailand, and to promote the competitiveness and to enhance stability of business operation for sustainable development. Mr. Panu Uthairat Chairman of the CG&CSR Subcommittee Annual Report 2017 79
80. Corporate Social Responsibility and Public Relations In Praise of the Monarchy iBank presented money to His Majesty the King at Thailand Mawlid H .E. 1438. His Majesty King Maha Vajiralongkorn Bodindradebayavarangkun presided over the opening ceremony of Thailand Mawlid H.E. 1438. On this occasion, the Bank presented charity fund to His Majesty the King for charity purpose at the discretion of His Majesty the King. The Bank’s representative also received from His Majesty the King a plaque of honor for sponsoring Thailand Mawlid celebration at the National Administration Center for Islamic Affairs Chalerm Phrakiat, Nong Chok, Bangkok, on 8th April 2017. 80 Annual Report 2017
81. iBank welcomed Her Royal Highness Princess Soamsawali Mr . Vitai Ratanakorn, Director and Acting President of Islamic Bank of Thailand, welcomed Her Royal Highness Princess Soamsawali at Ground Plaza, Indoor Stadium Huamark, Bangkapi District, Bangkok, on the occasion that Her Royal Highness Princess Soamsawali presided over the 3rd “Muslim Thai Fair” organized to express the loyalty and to honor His Majesty King Bhumibol Adulyadej and to reflect the unity of Thai-Muslim subjects with love for the homeland, and to raise fund to support orphans’ education and religious teachers of Thai Muslim Housewife Foundation on 10th November 2017. iBank mourned for His Majesty King Bhumibol Adulyadej Mr. Vitai Ratanakorn, Director and Acting President of Islamic Bank of Thailand, together with the Board members, the management and employees of iBank displayed love and reminiscence for His Majesty the Late King of Thailand, and commemorated His Majesty the Late King of Thailand for his love and gratefulness for their humanity, at the Multi-purpose Ground, 2 nd Floor, Ratthaprasasanabhakti Building (Building B), Government Complex, Chaengwattana, on 26th October 2017. Annual Report 2017 81
82. Religion and Culture iBank donated for the prayer room in Chulalongkorn Hospital iBank joint-donated to purchase equipment for religious activities in the Prayer Room of Chulalongkorn Hospital , Thai Red Cross Society at Bhumisiri Mangkhalanusorn Building, 14th Floor, Chulalongkorn Hospital, on 6th February 2017. iBank held “Ramadan Relations Event for 2017” The Month of Ramadan was regarded as Islamic holy month. IBank held “Ramadan Inter-Relations” event which has been held every year to promote integrity, good morality and ethics of Muslims. In 2017, iBank hosted an Iftar reception for Diplomatic Mission of Muslim countries in Thailand, organized by the Ministry of Foreign Affairs and the Foundation of Islamic Center of Thailand, and also hosted Iftar festivity in Bangkok and Lower Southern Region, including Songkhla, Yala, Pattani, and Narathiwat. iBank allocated the budget for donations and charities through branch offices to Mosques and nearby communities throughout the Month of Ramadan (May-June 2017). 82 Annual Report 2017
83. iBank participated in the blessing ceremony for Hajj pilgrims iBank , as a member of the Steering Subcommittee of the Hajj Pilgrims Facilitation Center, participated in the blessing ceremony for the Hajj pilgrims in different locations in the Southern Region such as Suvarnabhumi Airport, Hadyai International Airport, Narathiwat Airport and Krabi International Airport in August 2017. iBank sponsored Hajj pilgrims iBank promoted the Islamic merits by organizing Al-Hajj Deposits Lot Drawing Project in 2017 to sponsor Hajj pilgrims to travel to Saudi Arabia, totally 8 prizes, with the total value of 1,440,000 Baht on 25th December 2017. Society iBank participated in public activities iBank, together with business alliances of the Bank, participated in public activities such as cleaning, painting, landscaping and giving cleaning equipment to Nurulhidayah Mosque (Khum Nong Khu). IBank also hosted luncheon and distributed educational and subsistence equipment to the blind students of Khon Kaen School for the Blind on 21st January 2017. Annual Report 2017 83
84. iBank sponsored “Pondok Bantan Event: Mission to Khairul Ummah” iBank sponsored the Educational Development Foundation, Prateepsasana School to organize “Pondok Bantan Event: Mission to Khairul Ummah” to joint participate in Islamic academic development and to develop quality personnel for the society in the future at the Islamic Center of Thailand on 30th March 2017. iBank volunteered to provide foods and drinking water to the public and mourned for His Majesty King Bhumibol Adulyadej iBank employees volunteered to provide foods and drinking water along with publicized useful data to facilitate worshippers for His Majesty the Late King Bhumibol Adulyadej on 2nd May 2017 at Sanam Luang, Bangkok. iBank provided assistance and relief to flood victims in 2017 iBank provided assistance to its customers who were affected by floods in the Southern Region and in the Northeastern Region by issuing debt moratorium measures for principal amounts, and customers would be obliged to pay only profits for not exceeding 24 months until 31st March 2017 for customers residing in the flooded areas of 14 Southern provinces, including Petchburi Province and Prachuab Kirikhan Province, and for flood victims in the Northeastern Region including Sakon Nakhon Province, Kalasin Province, Roi-Et Province and Nakhon Panom Province. iBank issued debt moratorium measures for principal amounts, and customers would be obliged to pay only profits for not exceeding 12 months until 31st October 2017. In addition, IBank opened an account for Southern Flood Victims; Account No.008-1-31765-4 to provide assistance and relief to flood victims in different areas. 84 Annual Report 2017
85. iBank launched a campaign on “National Annual Tree Care Day” iBank launched a campaign on “National Annual Tree Care Day 2017” in cooperation with Ithatolumutdin Mosque and the Bank’s employees to organize activities of “Volunteers on Tree Growing and Religious Site Improvements” at Ithatolumutdin Mosque, Minburi District, Bangkok on 10th May 2017. iBank made Zakat donation iBank as representative made Zakat donation to help the poor and natural disaster victims for household financial support and initial fund for making a living. iBank participated in “MOF International Culture Charity Fair” iBank participated in “MOF International Culture Charity Fair” and exhibition booth displaying financial products and services under the Shariah Principle, conducted Shariah Q&A activities, and gave out souvenirs for the event at the MOF International Culture Charity Fair, presented at the Parking Fair ground next to Klong Prapa, Gage, Ministry of Finance, on 24th July 2017. Annual Report 2017 85
86. Education and Sporting Activities iBank hosted an event to provide knowledge on the Shariah Principle and Islamic Finance iBank provided knowledge on the Shariah Principle to students iBank provided knowledge on “Islamic Finance and from College of Islamic Studies, Prince of Songkla University on Organizational Management” to students from Sultan Azlan Shah st University, Malaysia, in their study tour and visit of the Bank’s affairs the occasion of study tour and visit on 31 July 2017. on 3rd March 2017. iBank brought happiness to the youth with “Shred2Share: Donation Trip 9” Activity iBank cooperated with Thai-British Security (Public) Co., Ltd., with more than 50 leading alliance organizations, to bring happiness to the youth in Border Patrol Police School under the Border Patrol Police Sub-Division 1, King Rama 1 Army Camp, Panomtuan District, Kanchanaburi Province with “Shred2Share: Donation Trip 9” activity that offered an opportunity for the youth to experience the farmers’ way of life under the philosophy of sufficiency economy as per the King Rama 9’s initiatives at the Golden Jubilee Museum of Agriculture Office (Public Organization), and gave out educational equipment to students participating in the activities during 23rd - 25th March 2017. 86 Annual Report 2017
87. Sporting Activities iBank participated in Charitable VIP Football Competition to raise funds under “Southern Flood Victims Rehabilitation” Project, organized by the Foundation of Islamic Center of Thailand at Ramkhamhaeng University Stadium (Huamak) on 19th February 2017. Economy The success of “Takaful for iBank Project” With success of “Takaful for iBank Project” in the previous year, therefore, in 2017, the Bank cooperated with Muang Thai Life Assurance (Public) Co., Ltd., and Thai Life Assurance (Public) Co., Ltd., to organize “Solidified Takaful Project” to present life assurance products correctly in accordance with the Islamic Solidified Principle, and to create security and to meet various demand of Thai-Muslim and non-Muslim customers more thoroughly. The Project was very successful with contributions of 485 million Baht and income of 46 million Baht. Annual Report 2017 87
88. iBank supported Islamic Cooperative Business iBank signed a financial support contract with Sakofah Islam Saving Co-op Ltd ., at the Head Office of Islamic Bank of Thailand, Q.House Building, Asoke, on Thursday, 23rd February 2017, to support the Islamic cooperative business. iBank promoted local community financial institutions iBank joined hands with “Al-Islamiyah Co-op” to promote and enhance the strength of local community financial institutions at Al-Islamiyah Co-op Ltd., Cherng Talay Sub-district, Talang District, Phuket Province on Saturday, 4th March 2017. iBank promoted “Pracharath Market” iBank, together with 52 agencies, signed the Memorandum of Understanding (MOU) on the Promotion of Prototyped Shops and Community-based Pracharath Market, conducted by the National Village and Urban Community Fund Office at the Royal Jubilee Room, 1st Floor, Challenger Building, Impact Muang Thong Thani, on 8th March 2017, for the purposes of economic and social development, network interface and promotion and support of the development of body of knowledge, management system, and enhancement of strength of the local economic system for stability and sustainability in the Thailand 4.0 Era. 88 Annual Report 2017
89. iBank signed MOU for Upgrading of Southern Border Provinces Economic Development iBank joined hands with the Southern Border Provinces Administration Centre (SBPAC) and 5 alliance organizations and signed MOU for Upgrading of Southern Border Provinces Economic Development and Quality of Life, at “Prasong Sunsiri” Meeting Room, Building 20, the Government House, on 10th November 2017, in cooperation with all sectors, to create trading opportunities, international interface investment, with the target of promoting products to the Muslim communities of over 2.2 billion people. iBank participated in “Civil State and Vayupak Market Fair Project of 2017” iBank cooperated with 8 state-owned specialized financial institutions, organized “Civil State and Vayupak Market Fair” Project of 2017” to promote retail traders, low income earners, farmers or state-owned financial institution customers, areas for occupation, generation of incomes for increase of the working capital in the economic system, and in the Market Fair, there were varieties of booths for selling of consumer goods. Annual Report 2017 89
90. Bank Information As of December 31st , 2017 The Bank’s capital stock was 10,276,825,862 shares or calculated to be the total registered capital of 102,768,258,620 Baht. The proportion of Bank’s shareholders as of December 31st, 2017 as follows: No. List of Shareholders Quantity (Shares) Ratio (%) 1 Ministry of Finance 4,988,334,910 48.540 2 Government Savings Bank 4,091,533,440 39.813 3 Krungthai Bank Public Company Limited 1,010,208,044 9.830 4 Miss Suyanee Suwannayos 50,833,674 0.495 5 MFC Asset Management Public Company Limited 40,753,015 0.397 6 Mrs. Rahmah Moonsap 10,000,000 0.097 7 SMEs Venture Capital Fund 7,500,000 0.073 8 CIMB Thai Bank Public Company Limited 6,000,000 0.058 9 Mrs. Jiraporn Boonmalert 6,000,000 0.058 Government Pension Fund 5,226,500 0.051 THAI-1 Company Limited (Brunei Darussalam) 5,226,500 0.051 Other shareholders 55,209,779 0.537 10,276,825,862 100.00 10 11 Total Affiliated Company and Investment of the Bank Amanah Leasing Public Company Limited 90 Business Type : Islamic hire-purchase service Head Office Address : 16-16/1 Soi Kasemsan 1, Phayathai Road, Wangmai, Pathumwan, Bangkok 10330 Telephone : 02-030-6456 Facsimile : 02-030-6401 Paid-up capital : 952,178,409 Baht, divided into 952,178,409 ordinary shares; Paid-up capital ratio : 48.89% Annual Report 2017
91. CREDIT RATINGS AA (tha) The assessment of credit worthiness from independent credit rating agency, Fitch Ratings, on 20 November 2017 is as follow; DOMESTIC CREDIT RATINGS Credit Ratings Definition Long-Term AA (tha) Very high credit quality Short-Term F1+ (tha) Highest short-term credit quality Outlook Stable Credit ratings outlook is stable INTERNATIONAL CREDIT RATINGS Credit Ratings Definition Long-Term BBB- Good credit quality Short-Term F3 Fair short term credit quality Outlook Stable Credit ratings outlook is stable Annual Report 2017 91
92. Executives No . Name Position Subordination 1 MR. VITAI RATANAKORN Director and Acting President 2 MR. VISUIT BORERIBOON Senior Executive Vice President Retail Banking Division Acting Executive Vice President Social and Economic Development Group 3 MS. ARSRA ANGKARIA Executive Vice President Technology and Electronics Operation Group 4 MS. SUNSANEE METHISARIYAPONG Executive Vice President Finance Group Acting Vice President Treasury Deparment Executive Vice President Administration and Human Resources Group Acting Vice President Human Resources Management Department Executive Vice President SMEs Banking Group Acting Executive Vice President Corporate Banking Group 5 6 MR. MANOCH DANGKOMEN MR. PAPARN ARYA 7 8 9 10 11 Pol.Capt. POOMIN PEONGSUJARIT Executive Vice President Administration and Human Resources Group (Special Assignment Project) MR. ARPICHAD AKDHAKURA Executive Vice President Retail Banking Group MRS. NUCHJAREE PAKDEJAREARN Senior Vice President Corporate Strategy Department MR. SURAPHON JARIYARANGSIRATTANA Senior Vice President Credit Risk Management Department MS. TUANSALEENA KUBAHA Senior Vice President Administration and Human Resources Group (Special Assignment Project) 12 MR. TEERA YEEGOB Senior Vice President Branch Administration 2 Department Acting Executive Vice President Branch Banking Group Senior Vice President Cheque Collection and Money Transfer Department Acting Vice President IT Operation and Service Department MR. NIUM KANPROM Senior Vice President Risk Management Department MR. PONGSIRI PHUNSAWAS Senior Vice President SMEs Business1 Department MR. BUNCHAI NAWACHAINDAPHAN Senior Vice President SMEs Business3 Department MR. SURACHAI JANABOON Senior Vice President Retail Collection and Debt Restructuring Department MR. SUWIT CHANACHOL Senior Vice President Administration and Human Resources Group (Special Assignment Project) MR. KRISADA KITTIPORNPAIBOON Senior Vice President Retail Financing Project Department MR. ZATI SANKHAVANIJA Senior Vice President Credit Operations Support Department Acting Executive Vice President Credit Operation Group MS. CHITTRA SORHASAN Vice President Deposit and Fee Department MR. BODIN ADULPHAKDEE Vice President Hajj and Umrah Department MRS. SAVITREE CHATUPORNKANCH Vice President Finance Department MRS. SUWANNA SUTAKAN Vice President Compliance and Rules Department MR. THAWEEWAT KANTARIYOH Vice President Credit Operations Department DR. CHATCHAWAN NIYOMWITTAYANONT Vice President Shariah Department MR. VICHIT MEKASAWAT Vice President Micro Finance Department LT. SURAKAMPON ADULYARAT Vice President Social Economic Development in 5 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 MS. RADKLAO SITTIJANYAWAN Southern Provinces Department 92 Annual Report 2017
93. No . Name Position Subordination 29 MR. MONGKHON MAKSAEREEKUN Vice President Sustainable Organization Development Office 30 DR. KLANJAI JUISIRI Vice President Company Secretary Department 31 MS. PORNNAPA PADUNGKIATTIWONG Vice President Company Secretary Department 32 MR. RAWIN KRAITRUDPHON Vice President Retail Financing Department 33 MR. BANTHOON WONGBANTHOON Vice President Administrative Department 34 MR. CHIRASAK VISHAIGOOL Vice President Government Policy Department 35 MR. BUNTOON UTHAIWAT Vice President Credit Review Department 36 MR. BORIPAT PATTARAPRADIT Vice President Internal Audit Department 37 MR. CHARNWIT TRANGPANICH Vice President Legal Department Acting Vice President Compliance and Rules Department 38 DR. PAKORN PRECHAPORN Vice President Corporate Business Department 39 MRS. SURADA PHOOKPHUNTH Vice President SMEs Business 2 Department 40 DR. ABIDEAN WANKHWAN Vice President Shariah Product Department Acting Vice President Communication and Corporate Image Department 41 MR. YOSWARIS CHANCHAROENSUK Vice President Accounting Department 42 MR. VUTTIPHAN PRIDIPHAN Vice President Corporate and SMEs Debt Restructuring Department 43 MR. KANACHAI WIWATWITHAYA Vice President Retail Business Analysis Department 44 MR. ANUPONG CHAVENGKIATTIKUL Vice President Investment and International Business Department Acting Vice President Human Resources Development Department 45 MR. KHAJOHNSAK ARGEPHUL Vice President Anti Fraud Office 46 MR. SUPHACHOK WANICHAKORNKUL Deputy Vice President IT Development and Management Department Acting Vice President IT Development and Management Department Deputy Vice President Alliance Business Management Department Acting Vice President Alliance Business Management Department Deputy Vice President Credit Contract Operations Department Acting Vice President Credit Contract Operations Department Deputy Vice President Branch Administration 1 Deparment Acting Vice President Branch Administration 1 Deparment MRS. RATTANAKORN Deputy Vice President Procurement Department ARPORNPATTANAPONG Acting Vice President Procurement Department MR. PERAYOUTH SIRIKHUNDH Deputy Vice President Collateral Appraisal Department Acting Vice President Collateral Appraisal Department 47 48 49 50 51 MS. SUKWASA JIRAPORNTHITA MR. PEAMSAK SRISUVATTANANAN MRS. PORNTIP WICHITAPA Annual Report 2017 93
94. List of Bank ’s Branches No. Branches Telephone Fax Address 1 Offices 36 Branches of Bangkok Metropolitan Central and Eastern Region 1 Asoke Office 02-260-1751-5 02-260-1750 No.66, Q House Asoke Building, G Floor,Sukhumvit 21 Road, Khlong Toei Nuea Sub-district, Vadhana District, Bangkok 10110 No.32/424-425, Pracha-uthit Road, Thung Khru Sub-district, Thung Khru District, Bangkok 10140 SC Plaza Building, G Floor, Room No. GN09-GN10, No. 24/6, Chimplee Sub-district, Taling Chan District, Bangkok 10170 No. 117/1-2, Salacheep Road, Prachuap Kirikhan Sub-district, Mueang Prachuap Khirikhan District, Prachuap Khirikhan 77000 7 Branches of Thon Buri District Office 2 Thung Khru 02-873-6803-5 02-873-6809 3 Southern Bus Terminal 02-422-3935-8 02-422-3939 4 Prachuap Khirikhan 032-604-223 5 Seeyaek Thotsakan 032-603-145 032-603-148 032-604-868-9 02-410-3235-8 02-410-3239 6 Samut Sakhon 034-423-730-3 034-423-734 7 Hua Hin 032-522-450 8 Phetchaburi 032-522-410-1 032-522-448-9 032-414-090-2 032-414-094 2nd Floor, Room DD1-DD2, No. 54/54, Village No. 7, Phutthamonthon Sai 2 Road, Bang Phai Sub-district, Bang Khae District, Bangkok 10160 No.927/408, Setthakit 1 Road, Mahachai Sub-district, Mueang Samut Sakhon District, Samut Sakhon 74000 No.4/19, Phetkasem Road, Hua Hin Sub-district, Hua Hin District, Prachuap Khirikhan 77110 No.107, Surinruechai Road, Tharab Sub-district, Mueang Phetchaburi District, Phetchaburi 76000 6 Branches of Sathon District Office 9 Sathon 02-286-8921-4 02-286-8925 10 Paradise Park 02-787-1731-4 02-787-1735 11 Pratunam 02-208-0919-22 02-208-0923 12 Silom 02-236-9404-7 02-236-9408 13 The Nine Rama 9 02-318-4156-8 02-318-4926 02-318-4927 14 Town in Town 02-148-1036-9 02-148-1040 94 Annual Report 2017 No.6/10, G Floor, Pipatanasin Building , Naradhiwas Rajanagarindra Road, Thung Maha Mek Sub-District, Sathorn District, Bangkok 10120 2nd Floor, Room No. 2C005, Paradise Park Shopping Center, Park No. 61 Srinakarin Road, Nong Bon Sub-District, Prawet District, Bangkok 10250 No. 120/69, Ratchaprarop Road, Phaya Thai Sub-district, Ratchathewi District, Bangkok 10400 Room No. 201-202, 2nd Floor, Thaniya Plaza BTS Wing Building, No. 62, Silom Road Suriyawong Sub-district, Bangrak District, Bangkok 10500 1st Floor, Room No. F01B01000-F01B02000, B Building, The Nine Rama 9, 999/2 Rama 9 Road, Suan Luang Sub-District, Suan Luang District, Bangkok 10250 B1 Building, Room 101, Tonsoong Avenue, No. 226, Praditmanutham Road Phlabphla Sub-district, Wang Thong lang District, Bangkok 10230
95. No . Branches Telephone Fax Address 7 Branches of Minburi District Office 15 Klong Tan 02-729-8805-8 02-729-8806 16 The Mall Bang Kapi 02-734-1905-9 02-734-1904 17 Thanon Nawamin 02-509-4782-5 02-509-4786 18 Saphanmai 02-521-9627-30 02-521-9631 19 Thanon Ramkhamhaeng 87 02-736-3831-4 02-736-3835 20 Min Buri 02-517-9655-7 02-517-9658 21 Fashion Island 02-508-3818-21 02-508-3822 No.9, UM Building Tower, M Floor, Ramkhamhaeng Road, Suan Luang Sub-District, Suan Luang District, Bangkok 10250 2nd Floor, Room No. 2S-L3C, The Mall Bang Kapi, No. 3522, Lat Phrao Road, Khlong Chan Sub-district, Bang kapi District, Bangkok 10230 No. 4/1483-1486, Village No. 7, Nawamin Road, Khlong Khum Sub-district, Bueng Kum District, Bangkok 10240 No. 348, Phahonyothin Road, Anusawari Sub-district, Bang Khen District, Bangkok 10220 No. 847, Ramkhamhaeng Road, Hua Mark Sub-district, Bang Kapi District, Bangkok 10240 444, Village No. 8, Seethaburanukit Road, Min Buri Sub-district, Min Buri District, Bangkok 10510 B Floor, Room No. B004A, Fashion Island , No. 587, 589, Ram-intra Road, Khannayao Sub-district, Khannayao District, Bangkok 10230 9 Branches of Nonthaburi District Office 22 Phra Nakhon Si Ayutthaya 035-345-346 035-345-486 035-345-487 23 02-143-8781-3 02-143-8784 24 The Government Complex Commemorating Nonthaburi 02-526-6173 25 Bang Phlat 02-526-6101-2 02-526-6163-4 02-424-5099-102 02-424-5103 26 Suphanburi 035-525-872-5 035-525-876 27 Nakhon Pathom 034-271-904-7 034-271-908 28 Ratchaburi 032-332-375-8 032-332-379 29 Kanchanaburi 034-671-520-3 034-671-524 30 Pathum Thani 02-593-4070-2 02-593-4073 1st Floor, Room No. GP-06-07, Ayutthaya Park, No. 126, Village No. 3, Asia Highway, Khlong Suan Phlu Sub-district, Phra Nakhon Si Ayutthaya District, Phra Nakhon Si Ayutthaya 13000 No. 120, B Building, 1st Floor, Village No. 3, Chaeng Watthana Road, Thung Song Hong Sub-district, Lak Si District, Bangkok 10210 No. 77/71-72, Village No. 4, Pracharat Road, Suan Yai Sub-district, Mueang Nonthaburi District, Nonthaburi 11000 Room No. 678, 680, Meeting Mall ,Charansanitwong Road, Bang O Sub-district, Bang Phlat District, Bangkok 10700 No.24/2-3, Muenhan Road, Tha Philiang Sub-district, Mueang Suphanburi District, Suphanburi 72000 No.100-102, Rajvithee Road, Phra Pathom Chedi Sub-district, Mueang Nakhon Pathom District, Nakhon Pathom 73000 No.295-297, Kraipetch Road, Na Mueang Sub-district, Mueang Ratchaburi District, Ratchaburi 70000 No.218/13, Sangchuto Road, Ban Nuea Sub-district, Mueang Kanchanaburi Distrit, Kanchanaburi 71000 No.27/17-19, Pathum Sampan Road, Bang Prok Sub-district, Mueang Pathum Thani District, Pathum Thani 12000 Annual Report 2017 95
96. No . Branches Telephone 7 Branches of Chon Buri District Office 31 Nong Chok 02-548-3100-3 Fax 02-548-3104 32 Chachoengsao 038-518-585-8 038-518-589 33 Bang Saen 038-395-051-4 038-395-055 34 Rayong 038-610-412-5 038-610-416 35 Chanthaburi 039-328-893-5 039-328-897 36 Thanon Sri Nakarin 02-320-3361-3 02-320-3364 37 Pattaya 038-488-414-6 038-488-417 14 Branches of North Office 8 branches of Chiang Mai District Office 38 Thanon Chang 053-287-214-7 Phueak Chiang Mai 39 Central Airport Chiang Mai 053-277-259 053-277-024-5 053-277-286 40 Hang Dong Chiang Mai 053-431-229-32 41 Lamphun 42 Phayao 43 Lampang 44 45 96 053-287-218 053-277-287 053-431-233 053-510-185-7 053-510-194 054-432-191-4 053-510-195 054-222-995 Chiang Mai 054-222-054 054-222-996 054-230-006-7 054-223-189 053-283-265-6 Chiang Rai 053-748-883-5 053-748-886 Annual Report 2017 054-432-195 053-270-718 Address No.67, Village No. 2, Choemsamphan Road, Krathumrai Sub-district, Nong Chok District, Bangkok 10530 No. 217/39-40, Mahacharkkaphat Road, Na Mueang Sub-district, Mueang Chachoengsao District, Chachoengsao 24000 No. 177, Long Hat Bang Saen Road, Saen Suk Sub-district, Mueang Chon Buri District, Chon Buri 20130 No. 292/2-3, Sukhumvit Road, Choeng Noen Sub-district, Mueang Rayong District, Rayong 21000 No.84/24, Tha Chalab Road, Talat Sub-district, Mueang Chanthaburi District, Chanthaburi 22000 No.1170,1172, Sri Nakarin Road, Suan Luang Sub-district, Suan Luang District, Bangkok 10250 No.597/3, South Pattaya Road, Nong Prue Sub-district, Bang Lamung District, Chon Buri 20260 No. 141/1, Chang Phueak Road, Sriphum Sub-district, Mueang Chiang Mai District, Chiang Mai 50200 Room No. F-01, 3rd Floor, Central Plaza Chiang Mai Airport, No. 2, Mahidol Road, Hai Ya Sub-District, Mueang Chiang Mai District, Chiang Mai 50100 Kadfarang Shopping Plaza, No. 225/242, Village No. 13, Chiang Mai - Hod Road, Ban Wen Sub-District, Hang Dong District, Chiang Mai 50230 No.23, Inthayongyot Road, Nai Mueang Sub-district, Mueang Lamphun District, Lamphun 51000 No.474/3-4, Phahonyothin Road, Wiang Sub-district, Mueang Phayao District, Phayao 56000 No.92-98 Bunwat Road, Suan Dok Sub-District, Mueang Lampang District, Lampang 52100 No.125 Chang Khlan Road, Chang Khlan Sub-District, Mueang Chiang Mai District, Chiang Mai 50200 No.808/8 Paholyothin Road, Wiang Sub-District, Mueang Chiang Rai District, Chiang Rai 57000
97. No . Branches Telephone 6 branches of Phitsanulok District Office 46 Mae Sot 055-533-636 055-533-639 055-533-643 055-533-646 47 Nakhon Sawan 056-372-367-70 Fax Address 055-533-649 No. 620/2-3, Intarakiri Road, Mae Sot Sub-district, Mae Sot District, Tak 63110 056-372-371 No. 1016/4-5, Village No.9, Asia Road, Nakhon Sawan Tok Sub-district, Mueang Nakhon Sawan District, Nakhon Sawan 60000 No. 8/206-207, Srimala Road, Nai Mueang Sub-district, Mueang Phichit District, Phichit 66000 No.5, Rat-uthit Road, Thani Sub-district, Mueang Sukhothai District, Sukhothai 64000 No.202-8/9, Boroma-at Road, Tha-it Sub-district, Mueang Uttaradit District, Uttaradit 53000 No.87/24, Akathotsarot Road, Nai Mueang Sub-district, Mueang Phitsanulok District, Phitsanulok 65000 48 Phichit 056-613-746-9 056-613-750 49 Sukhothai 055-610-320 50 Uttaradit 51 Phitsanulok 055-610-311-3 055-610-319 055-407-444-5 055-407-447-8 055-242-712-3 6 branches of Khon Kaen District Office 52 Nakhon Ratchasima 044-252-661-4 055-407-577 055-242-443 044-252-665 53 UD Town (Udon Thani) 042-932-990-3 042-932-994 54 Sakon Nakhon 042-716-723-6 042-717-188 55 Maha Sarakham 043-711-687 56 Kalasin 043-711-587 043-711-645 043-711-667 043-816-913-6 043-816-606 57 Khon Kaen 043-246-824-7 043-246-828 6 branches of Ubon Ratchathani District Office 58 Roi Et 043-515-881-4 043-515-886 59 Yasothon 045-711-367 Si Sa Ket 045-711-252 045-711-265 045-711-276 045-711-297 045-643-981-4 60 61 Ubon Ratchathani 045-316-967-70 045-316-971 62 Buri Ram 044-602-526-9 044-602-530 63 Surin 044-515-812 044-515-814-5 044-515-817 044-515-819 045-643-985 No.160/2, Chomsurangyat Road, Nai Mueang Sub-District, Mueang Nakhon Ratchasima District, Nakhon Ratchasima 30000 1st Floor, Room No. H22-H23, UD Town Building, No. 99/9, Tong Yai Road, Mak Kaeng Sub-district, Mueang Udon Thani District, Udon Thani 41000 No.1755/8-9, Ratpattana Road, Thatchoengchum Sub-district, Mueang Sakon Nakhon District, Sakon Nakhon 47000 No.453/2-3, Nakhon Sawan Road, Talat Sub-district, Mueang Maha Sarakham District, Maha Sarakham 44000 No.93-95, Phirom Road, Kalasin Sub-district, Mueang Kalasin District, Kalasin 46000 No.77/3, Klang Mueang Road, Nai Mueang Sub-district, Mueang Khon Kaen District, Khon Kaen 40000 No.206/1-2, Phloenchit Road, Nai Mueang Sub-district, Mueang Roi Et District, Roi Et 45000 No.230/3-5, Chaeng Sanit Road, Nai Mueang Sub-district, Mueang Yasothon District, Yasothon 35000 No.1104-5, Khukhan Road, Mueang Tai Sub-district, Mueang Si Sa Ket District, Si Sa Ket 33000 No.479/1-2, Chayangkun Road, Nai Mueang Sub-district, Mueang Ubon Ratchathani District, Ubon Ratchathani 34000 No.39/6-7, Thani Road, Nai Mueang Sub-district, Mueang Buri Ram District, Buri Ram 31000 No.73, 75, Chitbumrung Road, Nai Mueang Sub-district, Mueang Surin District, Surin 32000 Annual Report 2017 97
98. No . Branches 5 Branches of Phuket District Office 64 Ranong Telephone Fax 077-825-394 65 Phang-nga 077-825-264 077-825-393 076-414-422-5 66 Tesco Lotus Thalang 076-311-705-8 076-311-709 67 Krabi 075-624-040-3 075-624-044 68 Phuket 076-214-053-4 076-214-055 6 branches of Surat Thani District Office 69 Surat Thani 077-206-057-60 076-414-426 077-206-061 70 Nakhon Sri Thammarat 075-357-350-3 075-357-354 71 Koh Samui 077-447-845-8 077-447-849 72 Thung Song Nakhon Sri Thammarat 075-423-993 73 Chumphon 075-412-540 075-412-567 075-423-885-6 077-503-395-6 74 Thanon Chon Kasem 077-203-994-7 Surat Thani 8 Branches of Song Khla District Office 75 Trang 075-590-459-60 075-590-463 075-590-465 76 Thanon Niphat 074-225-110 Uthit 1 Hat Yai 074-225-130 074-225-140-41 77 Maekhri Phatthalung 074-695-475 074-695-554 074-695-655 074-695-712 78 La-ngu 074-783-904-7 077-511-062 No.103/1, Na Mueang Road, Talat Sub-district, Mueang Surat Thani District, Surat Thani 84000 No.1664, Ratchadamnoen Road, Tha Wang Sub-district, Mueang Nakhon Si Thammarat District, Nakhon Si Thammarat 80000 No. 80, Village No. 6, Bo Phut Sub-district, Ko Samui District, Surat Thani 84320 No.41, Chaichumpon Road, Pak Phraek Sub-district, Thung Song District, Nakhon Si Thammarat 80110 077-203-998 075-590-473 No.52/1-2, Wisetkul 11 Alley, Ratsada Road, Thapthiang Sub-district, Mueang Trang District, Trang 92000 074-225-255 No. 151-157, Niphat Uthit 1 Road, Hat Yai Sub-district, Hat Yai District, Song Khla 90110 074-695-856 No. 175, Village No. 1, Anukul Road, Mae Khri Sub-district, Tamot District, Phatthalung 93160 074-783-908 No.149, Village No. 5, La-ngu – Pakbara Road, La-ngu Sub-district, La-ngu District, Satun 91110 No.81/78, Village No. 2, Kanchanawanit Road, Khao Rubchang Sub-district, Mueang Song Khla District, Song Khla 90000 No8/4-5 Jana - Nathawi Road, Ban Na Sub-district, Chana District, Song Khla 90130 No.287/6, Village No. 7, Yontrakan Kamthon Road, Khlong Khut Sub-district, Mueang Satun District, Satun 91000 No.2/1-2, Hat Yai City Alley, Thammanunwithi Road, Hat Yai District ,Song Khla 90110 Song Khla 074-558-259-61 074-558-265 80 Chana 074-207-121-5 074-207-122 81 Satun 074-725-039-42 074-725-043 82 Hat Yai 074-237-392 074-237-515 Annual Report 2017 No. 75-77, Ruangrat Road, Khao Niwet Sub-district, Mueang Ranong District, Ranong 85000 No. 235/1 - 2, Phetkasem Road, Thai Chang Sub-district, Mueang Phang-nga District, Phang-nga 82000 G Floor, Room No. 116, Tesco Lotus Thalang, No. 303, Village No. 1 Thepkrasattri Road, Thepkrasattri Sub-district, Thalang District, Phuket 83110 No.94, 94/1, Maharat Road, Pak Nam Sub-district, Mueang Krabi District, Krabi 81000 No.5, 7, Yaowarat Road, Talat Nuea Sub-district, Mueang Phuket District, Phuket 83000 No.56/1, Poraminmakkha Road, Tha Tapao Sub-district, Mueang Chumphon District, Chumphon 86000 No.545 Chon Kasem Road, Talad Sub-District, Mueang Surat Thani District, Surat Thani 84000 79 98 Address
99. No . Branches 7 Branches of Pattani District Office 83 Big C Pattani Telephone Fax 073-337-812-5 073-337-816 073-485-160 073-485-327 073-485-399 073-485-414 073-439-491-4 073-485-514 073-431-883 073-411-310 No. 23/1-2, Suriya Road, Taluban Sub-district, Saiburi District, Pattani 94110 073-323-469 No.20,22,24, Na Kluea Road, A No Ru Sub-district, Mueang Pattani District, Pattani 94000 No.49/9-12, Kalapor Road, Jabangtigor Sub-district, Mueang Pattani District, Pattani 94000 84 Palat Pattani 85 Yarang Pattani 86 Khokpho Pattani 87 Saiburi Pattani 88 Pattani 073-431-040 073-431-218 073-431-284 073-431-709 073-411-059-60 073-411-163 073-411-296 073-323-465-8 89 Jabangtigor Pattani 073-311-820-3 073-311-879 073-223-690-3 073-223-694 073-235-131-4 073-235-135 6 branches of Yala District Office 90 Thanon Phumacheep Yala 2 91 Betong 073-439-495 92 Raman Yala 073-295-041-4 073-295-045 93 Bannang Sata Yala 073-289-282-5 073-289-286 94 Yaha Yala 073-291-463-6 073-291-467 95 Yala 073-247-140-3 073-247-144 7 Branches of Narathiwat District Office 96 Tanyongmat 073-671-858-61 073-671-862 97 Su-ngai Kolok Narathiwat 073-614-561-4 073-614-565 98 Takbai Narathiwat 073-581-971-5 073-581-977 99 Waeng Narathiwat 073-659-321-4 073-659-325 100 Rueso Narathiwat 073-572-270-3 073-572-274 101 Narathiwat 073-512-627-8 073-512-629 102 Thanon Wichitchaiboon Narathiwat 073-513-664-5 073-513-663 Address G-In Floor , Room No.GCR116, Big C Pattani , No.301, Village No. 4, Rusamilae Sub-district, Mueang Pattani District Pattani 94000 No. 122/11-12, Village No. 5, Phetkasem (Pattani - Narathiwat) Road, La-Nga Sub-district, Mayo District, Pattani 94190 No. 1/7, Village No. 2, Pattani – Yala Road, Pitumudi Sub-district, Yarang District, Pattani 94160 No.170/10, Village No. 7, Naket – Khokpho Road, Khokpho Sub-district, Khokpho District Pattani 94120 No. 24-26, Phumacheep Road, Sateng Sub-district, Mueang Yala District, Yala 95000 No. 130/1, Sukyang Rong, Betong Sub-district, Betong District, Yala 95110 No. 100-102, Village No. 1, Mueang Raman Road, Kayubokoh Sub-district, Raman District, Yala 95140 No. 200, 202, Village No. 2, Sukyang Road, Bannangsata Sub-district, Bannangsata District, Yala 95130 No. 4/3, Pitakthani Road, Yaha Sub-district, Yaha District, Yala 95120 No.59, Phiphitphakdee Road, Sataeng Sub-district, Mueang Yala District, Yala 95000 No. 46, Thetsaban 3 Road, Tanyongmat Sub-district, Ra-ngae District, Narathiwat 96130 No.36, Butsayaphan Road, Su-ngai Kolok Sub-district, Su-ngai Kolok District, Narathiwat 96120 No. 62/21, Village No. 4, Narathiwat - Takbai Road, CheheSub-district, Takbai District, Narathiwat 96110 No. 111/1-2, Village No. 1, Su-ngai Kolok - Waeng Road, Waeng Sub-district, Waeng District, Narathiwat 96160 No. 30/15, Village No. 2, Rueso - Yala Road, Rueso Ok Sub-district, Rueso District, Narathiwat 96150 No.52/18-19, Suriyapradit (Opposite Police Station) Road, Bangnak Sub-district, Mueang Narathiwat District, Narathiwat 96000 No.11/2-4, Wichitchaiboon Road, Bangnak Sub-district, Mueang Narathiwat District, Narathiwat 96000 Annual Report 2017 99
100. Auditor ’s Report and Financial Statement
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