S u s t a i n a b i l i t y Repo r t 2 0 2 1 TMBThanachart Bank Public Company Limited One Goal Bank
2 Introduction Customers Social Governance Appendix Environment Sustainability Report 2021
3 Introduction Customers Social Governance Appendix Environment Sustainability Report 2021 V i s i o n M i s s i o n To become the recommended bank of choice by our customers To improve our customers’ life-long financial well-being
4 Introduction Customers Social Governance Appendix Environment Sustainability Report 2021 16 18 20 24 5 7 11 Message from Chairman and CEO About ttb Sustainability at ttb 15 Customers Getting through COVID-19 Together Financial Well-being Digital Transformation Customer Experience 27 Environment Responsible Lending Sustainable Finance Our Environmental Impacts 28 29 34 65 69 74 77 About this Report Sustainability Performance GRI Content Index Assurance Statement 50 Governance Corporate Governance and Business Ethics Risk Management Market Conduct Data Privacy and Cybersecurity 51 54 58 61 Social 35 Financial Literacy and Inclusion People Social Development 36 40 46
5 Introduction Customers Social Governance Appendix Environment Sustainability Report 2021 Mr. Ekniti Nitithanprapas Chairman of the Board of Directors Mr. Piti Tantakasem Chief Executive Officer Message from Our Chairman and Chief Executive Officer At TMBThanachart Bank, we believe that business and sustainability are interwoven. For our business to grow sustainably, it is important to ensure that all stakeholders benefit from and are not negatively impacted by the Bank’s operations. To drive the organization towards sustainability, it has to start from within. Everyone in the organization should be able to see and believe in the same mission. As we move forward together, we will be able to see that achieving the goal of sustainability is within reach and is not too distant. Another important topic that the Bank continues to drive forward is one about promoting the financial well-being of Thai people throughout the country, especially as we believe that financial well-being is an important foundation for all of us to achieve one life’s goal. We emphasize this to all our employees in the development of products, services, and financial solutions which are created to address the needs of our customers in every stage of their lives. With theaimof elevating thesocietyand thefinancial livelihoods of the Thai people, the Bank is committed to improving and developing products, services, and financial solutions that better serve the financial needs of our customers. For instance, ttb provides an all-free transactional account with no transactional fees (that is, no deposit fee, no withdrawal fee, no transfer fee, and no payment fee) while providing free life and accident insurance. It has already provided to more than 1.9 million customers at no additional charge, resulting in exponential growth of deposits into ttb’s all free accounts by 15 percent during the past year. On investment services, the Bank has further enhanced the ttb smart port which facilitates investment by providing each client with professional assistance to take care of, select, arrange, and adjust their investment portfolio as per each customer’s bespoke risk level. We continued to be impacted by the COVID-19 pandemic in 2021. With the crisis came the “New Normal” in terms of consumer behavior, especially in their trading of products and services which experienced an increasing dependency on technology. The Bank was able to adapt to this and continued to develop our digital services. Throughout this time, we incessantly improved the features of the ttb touchapplication tomake it easier andmoreconvenient for our customers to manage their finance, thereby helping to improve their financial well-being. We also established the ttb spark team which is the digital hub committed to digital transformation in order to speed up the development of service solutions and digital innovations for the financial well-being of our customers.
6 Introduction Customers Social Governance Appendix Environment Sustainability Report 2021 One of the elements of sustainability is the ability to operate thebusinesswithenvironmental andsocial responsibilities inmind. In order to facilitate and influence businesses to shift towards the green industry, the Bank enhanced its Green Loan by expanding the loan from 2 to 7 categories, covering renewable energy, energy efficiency, sustainable water and wastewater management, pollution prevention and waste management, clean transportation, green building, as well as the sustainable management of natural resources. The Bank also developed the Green Bond Framework to help businesses get access to financial resources that help address climate change and support business transformation towards a low-carbon society. In addition, to mitigate its environmental impacts, the Bank hasprovidedsustainablefinancial solutions, namely, responsible lending and sustainability-linked loans, helping customers to achievefinancial well-beingwhilesimultaneouslydemonstrating the Bank’s responsibility toward the environment and society. In terms of social responsibility, in 2021, the Bank continued to promote financial literacy among its customers and the general public through 4 digital platforms that are easy to access. These include: “fintips by ttb” - a source of financial tips for the new generations on the ttb website and the ttb social media channels, “finfit with ttb” - an online community on the ttb Facebook page to exchange and share financial knowledge, “fin live and learn by ttb” - a financial education program for employees of companies that use our digital platform to pay for salary and benefit, and “finbiz by ttb” - a source of in-depth business knowledge and industry insights provided by experts for SME clients on our digital platforms, including the website, socialmedia, andonlinewebinars. Ourobjectiveswere toenhance the provision of financial literacy which is easy to understand and able to help shape the right mindset for appropriate financial behavior leading to improvements in financial well-being. TheBank knowledge or understanding. In 2021, the Bank was able to enhance its market conduct practices, thus leading to better assessment results by the Bank of Thailand. This further reflected our commitment and determination to improve our services while also being socially responsible. The integration of sustainability into our business operations based on good governance and environmental and social responsibilities led us to retain first place in the Fair Finance Thailand ranking by the Fair Finance Thailand Coalition for the last 3 consecutive years. This reflected our commitment to drive the business towards sustainable banking to promote financial well-being for the Thai people. The year 2021 was another important step as the Bank was listed for the first time on the Sustainability Yearbook 2021 in the banking category by S&P Global in its Dow Jones Sustainability Indices (DJSI). The Bank has now been included in the Bloomberg Gender-Equality Index (GEI) 2022 for the first time. This was the result of our outstanding corporate culture that is open to diversity and our policy that promotes equity and inclusion, in line with our approach to sustainable banking as part of society. Lastly, we would like to thank all shareholders, customers, and stakeholders from all sectors for the continuous support and suggestions which have all proven to be very useful for our endeavor towards sustainability. We will contribute to laying the foundation for fair banking to help achieve a healthy equilibrium for the economy, the environment, and a society that embraces sustainability. We would like to point out our long-term dedication to continuously enhancing our business responsibilities and committing to our mission to promote the financial well-being of our customers and the Thai people throughout the country. has also been committed to promoting financial inclusion. With the COVID-19 pandemic impacting the economy globally and the society at large, the Bank was able to help mitigate the impacts by providing loans to more than 750,000 customers. In addition, we also collaborated with the Thai Bankers' Association and the Bank of Thailand to push forward the debt consolidation program to help businesses such as hotels and the public sector get through this crisis. At the same time, theBankbelieves that inorder for thebusiness to succeed, we need to focus on developing our employees as well as our corporate culture. We launched the new corporate culture “I CARE” to guide our new way of working after the recent merging. This new corporate culture reflects our beliefs, core values, strategies, and strengths. We are also committed topromotinganagileapproach toworking, emphasizing teamwork among employees with differing abilities. In addition, we also supported our employees who volunteered as part of our corporate responsibility program for sustainability - the Fai-Fah by ttb. This has been our key CSR program to inspire the young generation and the community tomake positive and sustainable changes in business, the community, and the society in line with our Make REAL Change philosophy. We believe that good corporate governance is the foundation for sustainable growth. We have laid out a management structure that is efficient, transparent, and balanced to help achieve optimal benefits in governance. The Bank places the utmost importance onMarket Conduct, which is critical to our business in terms of establishing and maintaining customer trust and confidenceintheBank.Wefoster,amongallemployees,acorporate culture that adheres to business ethics by committing to maintaining customers’ interest and offering the best and fair solutions to customers while not exploiting customers' lack of
7 Introduction Customers Social Governance Appendix Environment Sustainability Report 2021 About ttb Founded in 1957, TMBThanachart Bank Public Company Limited (ttb) exclusively serviced military units and personnel only to expand its financial services into the commercial sector in 1973, and in 1983, the Bank was publicly listed on Thailand’s Stock Exchange. ttb has also been through several mergers, including mergers with DBS Thai Danu Bank and the Industrial Finance Corporation of Thailand in 2004, ING Bank N.V. in 2007, and Thanachart Bank in 2019. The recent merger has made ttb the sixth-largest commercial bank in Thailand by asset size. Today, the Bank provides a full range of banking services and platforms to our retail and commercial customers. Our Products and Services The Bank’s financial products and services include deposits, loans, investment products, andbancassurance. As a customer-centric organization, understanding customers’ needs is a key factor to our success; thus , the Bank’ s business is organi zed into two key customer segments: commercial banking and retail banking. Commercial Banking Group Deposit • Business account (ttb one bank) Loan • Working capital • Supply chain solutions • Letter of guarantee • Special funding program for SMEs (ttb SME Smart Biz) Payment and Collection • Payment service • Collection service • Liquidity management International Trade • International trade finance service • Capital market risk management Insurance • Bancassurance and business Protection Others • Corporate card • Agency service • Investment banking deposit Retail Banking Group Deposit • Transactional account (ttb all free) • Savings account (ttb no fixed) Loan • Personal loan • Home loan • Auto loan • Credit card loan Mutual Fund • ttb Open Architecture Insurance • Savings towards future securities • Life and health protection • Properties protection Wealth Banking • Wealth banking • Superior banking Remark: Revenues of each of the following businesses represent less than 5% of the total revenues: asset management business, wealth management/private banking, ESG fixed income products for commercial clients, and advisory services to our commercial/retail clients.
8 Introduction Customers Social Governance Appendix Environment Sustainability Report 2021 Open Architecture The Bank is the first bank in Thailand to offer an open architectureplatformfor all customers. TheBank’s long-term strategy for using this open-architecture platform is to provide customers with an extensive array of mutual fund products that correspond to different client needs and risk-return profiles. In 2021, ttb established twelve strong partnerships with both domestic and international leading asset management companies on the open architecture platform which include; • TMB Asset Management Co., Ltd. • UOB Asset Management (Thailand) Co., Ltd. • Aberdeen Asset Management Co., Ltd. • Principal Asset Management Co., Ltd. • SCB Asset Management Co., Ltd. • King Wai Asset Management (Asia) Co., Ltd. • TISCO Asset Management Co., Ltd. • One Asset Management Co., Ltd. • Kasikorn Asset Management Co., Ltd. • Krungsri Asset Management Co., Ltd. • Krung Thai Asset Management Co., Ltd. • Thanachart Asset Management Co., Ltd. Bancassurance On Jan 1, 2021, ttb entered into a strategic bancassurance partnership with Prudential Life Assurance (Thailand) Public Company Limited (“Prudential Thailand”), a subsidiary of Prudential PCL., for an initial term of 15 years to equip the newly merged Bank with Prudential’s leading health and wealth solutions. Prudential Life Assurance (Thailand) is a leading life insurance company that has operated in Thailand for more than 24 years. Prudential Life Insurance, which provides a comprehensive range of financial products, namely, l ife and health insurance. Additional ly, the partnership between the Bank and Prudential is expected to leverage technology to better serve customers. Subsequently, ttb offers insurance for loan collateral in association with non-life insurance companies by leveraging Thanachart Bank’s strong auto loans customer base to substantially increase ttb’s non-life insurance premiums. The Bank also provides other non-life insurance products such as personal accident, health, and motor insurance under their non-life insurance sector.
9 Introduction Customers Social Governance Appendix Environment Sustainability Report 2021 Strategy and Business The Bank’s continued efforts to strengthen customer relationships and capture market share have led to the formulation of the Seven Strategic Intents, which include multiple products and life-long customer solutions. These Seven Strategic Intents encompass the following: 1. Customer Centricity At ttb, customers are at the center of our business operations as we take into account how each business decision, process, and strategy will affect customer experience. The Bank analyzes and uses customer data to develop financial products and services relevant to customers’ needs by understanding customers’ behavior and anticipating their wants. Correspondingly, customer satisfaction is also measured and monitored to continuously improve the Bank’s financial products and services as well as customer experience. Since the start of the COVID-19 pandemic, ttb has been giving support to our customers who have been negatively impacted. 2. Build Deposits and Transactional Banking Product Excellence The Bank uses the deposit-led strategy to differentiate customer value propositions in deposit products and transactional banking services. The Bank will continue to focus on developing flagship deposit products that will help build lasting relationships with customers and enhance customer experience in hopes that ttb will eventually become the customers’ main bank of choice. 3. Continue Leading in Auto Loan and Lending Products After merging with Thanachart Bank, ttb has capitalized on the strength of Thanachart Bank’s auto loan, which is equipped with available personnel, car dealer networks, and Thanachart Bank’s brand strength to further expand the business and cater to customer’s needs. Thanachart Bank’s auto loans offered to ttb’s customers consist of comprehensive financial product offerings and services. This will strengthen the Bank’s ability to cope with changes in the market, thus, maintaining its leadership position in the auto lending industry. 4. Build Sustainable and Recurring Non-interest Income This past year, ttb has been continuously emphasizing on bui lding sustainable, non-interest income capability to effectively manage capital due to its minimum capital requirement when compared to credit-related income. Non-interest income, such as bancassurance products and mutual fund products, also ensures a sustainable bottom l ine throughout i ts business cycles . Subsequently, ttb also applied the distributor business model and the open architecture model to cater to different customers’ needs bycollaboratingwithsuitablebusinesspartners and sourcing the best financial products.
10 Introduction Customers Social Governance Appendix Environment Sustainability Report 2021 5. Optimize Capital Utilization and Liquidity Management The Bank is strongly committed to delivering the level of profit expected by investors and has established a target to earn the same level of ROE as Thailand’s top bank performers within the next three to five years. To achieve this, the Bank cont inues to focus on selectively growing the balance sheet to generate incremental return. 6. Enhance Digital Capability and Solutions The shift in customer behavior towards a more digitally-led lifestyle and rapid technological development is reflected in the increased preference for financial transactions that are conducted throughdigital channels. Meanwhile, the COVID-19 pandemic also played a role in accelerating this transformation by creating a heightened awareness of existing digital financial services offered by the Bank. In response, ttb has been investing in the development of the Bank’s IT infrastructure, cyber security systems, customer data privacy systems, and employee competency to build a corporate culture centered on digitized working procedures and operations; thiswould acceleratetheproductandservicedevelopment cycle and enhance customer experience. The Bank also places importance on digital capabilities by continued investments into the digital platform and related technologies to become Thailand’s top three digital banking serviceproviders-oneof ttb’s business priorities. ttbhas since rolledout a “Digital Frist” operating model to drive digital adoption while pursuing continuous improvements of the omni-channel customer journeyinorder tocopewithcustomers behavioral shift. Subsequently, the Bank has also been moving towards a decentralized innovation process that fosters a more rapid launch of new solutions across the Bank. This will not only help increase the Bank’s agility in driving innovation but also decrease the cost-to-serve. The Bank then aims to digitize and migrate in-branch services to a specific digital channel under the Digital-first” concept by creating a humanized touch in each branch-presence which is also referred to as the “humanized digital banking”. To provide the best possible customer engagement in response to consumers’ evolving behavior and increased expectations, ttb’s digital strategy has moved beyond traditional banking services to incorporate ecosystem play, which was developed with ttb’s strategic partners. The ecosystem play will be built around the Bank’s strong market presence and competitive advantage such as the automotive industrywhere ttb is themarket leader in automotive lending that has a high network coverage of dealers and automotive supply chain. The ecosystemplay will also act as an engagement tool for our customers to lessen the burden for owing a car. 7. Capture Synergy Realization Capturing realized benefits derived from post-merger integration include benefits from balance sheet synergies, cost synergies, and revenue synergies. 1) Balance sheet synergies are captured through balance sheet optimization, which allows the Bank to efficiently utilize its assets and raise funds. 2) Cost synergies arise from a greater economy of scale, specifically through the integration of key business support areas, namely, IT infrastructure investment, business operations, overlapped retail branches, and redundant back-office employees. 3) Revenue synergies foster the ability to introduceamoreextensive rangeof financial products and services to cater to customer needs and serve a larger customer base of more than 10 million, which will strengthen the Bank’s ability to maximize its income generation. The EBT (Entire Business Transfer) was completed in July 2021, after which the Bank sets its target to maximize the revenue potential which al igns with the newly, integrated customer base. This is done by focusing on our customers’ financial well-being and a stronger value proposition delivered by our top-tier digital platform.
11 Introduction Customers Social Governance Appendix Environment Sustainability Report 2021 TheBank strives to integratesustainability into our business and to ensure that our strategic objectives do not only fulfill short-term goals but also contribute to long-term sustainable growth. The Nomination, Remuneration andCorporate Governance Committee and the Chief Executive Committee have oversight of sustainabi l ity management and its effectiveness across the organization. At the working level, the Sustainability Department works with relevant business functions to elevate the Bank’s sustainable practice standards and improve awareness among employees across four key areas: business sustainability, environmental sustainability, social sustainability, and corporate governance and business ethics. Sustainability at ttb Sustainability Framework
12 Introduction Customers Social Governance Appendix Environment Sustainability Report 2021 Sustainability KPIs In 2021, ttb incorporated sustainability-related key performance indicators (KPIs) into corporate KPIs to drive our business towards sustainable growth. Sustainability Ratings Point of Contact Sustainability Framework 2021 Key Performance Indicators 2021 Target 2021 Performance Corporate Governance and Business Ethics Good corporate governance and effectiveness of the Board of Directors Over 93% of corporate governance report score 94% of corporate governance report score Data breach cases with customer impact 0 case 0 case Business Sustainability Customer Net Promoter Score (NPS) 65% 64% Environmental Sustainability Green loan setup 1,200 million Baht 2,309 million Baht Energy and water intensity reduction 10% compared to 2019 Energy intensity reduction by 35.8% and water intensity reduction by 39.7% from 2019 Social Sustainability SME loans with positive social impact 300 million Baht 228 million Baht Healthy Borrower Program 100 million Baht 1,076 million Baht Talent attrition 6% 7.6% Sustainability Department TMBThanachart Bank Public Company Limited Head Office, 3000 Phahonyothin Road, Chom Phon, Chatuchak, Bangkok 10900 Tel. 0 2299 1111 Email: firstname.lastname@example.org S&P Global’s Corporate Sustainability Assessment (CSA) Bloomberg Gender-Equality Index (GEI) Thailand Sustainability Investment (THSI) Fair Finance Thailand FTSE4Good Index IOD’s Corporate Report of Thai Listed Companies (CGR)
13 Introduction Customers Social Governance Appendix Environment Sustainability Report 2021 ttb creates sustainable value throughout our value chain... …providing exceptional products and services that enhance customer experience... 636 domestic branches 1 overseas branch 3,043 ATMs 598 ADMs 253 All in Ones 53 million Baht in CSR contribution > 4,000 people benefited from the fai-fah program NPS Score of 64 Overall satisfaction for complaint handling: 27% and 46% for retail and commercial customers respectively Total operating income of 65,537 million Baht ROE 5.1% EPS 0.1086 Baht 15,102 total employees 10 million customers Net profit of 10,474 million Baht 118,614 shareholders as of April 2021 …and giving back to our shareholders and the wider society.
14 Introduction Customers Social Governance Appendix Environment Sustainability Report 2021 As a financial institution, ttb creates financial value for both investors and employees through dividends and compensation while playing a significant role in stimulating national economic growth and uplifting people’s financial well-being through responsible, inclusive, and accessible products and services. Our customers derive value from our products and services. As such, the Bank invests in digital technologies and IT infrastructure to provide a better financial experience for our customers so that they experience faster, more convenient, easily accessible, and inclusive service. ttb provides training and career development programs for employees with the aimof promoting career growth and opportunities within the Bank. Such value creation in terms of human capital development is not only beneficial to employees, but also to shareholders, investors and society, as it creates a skilled and well-trained workforce. The Bank engages with all stakeholders on a regular basis. Stakeholders’ perspectives are taken into account and their concerns addressed appropriately. We believe that having a robust relationship with our stakeholders will enable us to operate responsibly and deliver innovative need-based products and services to customers and society. The Bank is continuously mitigating its direct environmental impacts and also its consumption of natural resources while complying with environmental regulations in order to alleviate the Bank’s impact on climate change. Input Output Financial Capital All financial assets including assets, deposits and equity. Manufactured Capital External resources such as suppliers and contractors are required for business operations; and product and service development. Human and Intellectual Capital Time, skills and knowledge of our workforce; systems; technology; and innovation which contribute to business operations. Social and Relationship Capital Engagement and relationship building with stakeholders including customers, employees, investors, shareholders, regulators, and society. Natural Capital The consumption of natural resources by business activities, i.e., energy consumption and water withdrawal. Financial Capital • 65,537 million Baht of operating income • 10,474 million Baht of net profit • Return on equity: 5.1% Manufactured Capital • 60% increase in ttb touch active users compared to 2020 • Zero data breach cases with customer impacts Human and Intellectual Capital • Development programs such as ttb Hackathon, Objective and Key Results (OKR), etc. • Financial well-being Awards and Digital Enabled Awards • Launch of new products and services such as Business ONE, Cash Your Car, Cash Your Home Social and Relationship Capital • The Bank’s NPS score: 64 • 1,131 volunteers for 2,640 hours • Community investment of 53 million baht Natural Capital • GHG Scope 1 emissions: 297.9 tonnes of carbon dioxide equivalent • GHG Scope 2 emissions: 5,731.9 tonnes of carbon dioxide equivalent • GHG Scope 3 emissions: 116.0 tonnes of carbon dioxide equivalent** • GHG emissions from R22 refrigerant: 10.6 tonnes of carbon dioxide equivalent ttb inspires people to Make REAL Change by using our financial expertise to address the needs of our customers for better financial well-being. ttb strategic intents: • Focus on customer centricity • Build deposit and transactional banking products excellence • Continue leading in auto loan and lending products • Build sustainable and recurring non-interest income • Optimize capital utilization and liquidity management • Enhance digital capability and solutions • Capture synergy realization ttb value creation Value to Stakeholders ** GHG Scope 3 emissions are calculated from activities: business travel (fleet cars) operated by external parties, paper usage and water consumption.
15 Introduction Customers Social Governance Appendix Environment Sustainability Report 2021 Customers
16 Introduction Customers Social Governance Appendix Environment Sustainability Report 2021 Getting through COVID-19 Together TheBank hasbeendiligentlycollaborating with stakeholders across the board in the midst of the ongoing COVID-19 pandemic to support customers, employees, and communities inmanaging the pandemic’s uncertainties and impacts. Customers TheBank continues to support customers with financial difficulties perpetuatedby the pandemic throughour debt relief programs and measures. At the beginning of April 2021, the Bank saw increasing customer requests for financial assistance during Thailand’s third wave of COVID-19 as a result of the government’s stringent measures ontravelandbusinessoperations to curb the spread of the pandemic. In response to customer’s demands and under the guidance of Bank of Thailand’s mandate, ttb rolled out phase three of the debt relief program, which has been extended until the end of December. Concurrently, ttb’s Guiding Principle of Post Relief Risk Schemes was also applied tobetter assess andunderstandcustomer’s needs as well as individually support impacted customers. By the end of 2021, approximately 12% of the total loan portfolio wasunderthereliefprogram,whichremained relatively stable since September 2021, whencomparedto40%duringthecountry’s full lockdown in June 2020. Although there were early signs of economic recovery, some sectors have been negatively affected more than others; namely, the real estate and hospitality sector. Hence, a financial rehabilitation measure called AssetWarehousingwas introduced in2021 with the objective to provide financial relief for impacted businesses so that they are able to remain open, maintain employment, and recover financially in the future. In a nutshell, Asset Warehousing allowed businesses to suspend their repayment on both principal and interest by using their assets as loan collaterals with a buy-back agreement. Businesses can then lease their assets from the Bank to continue their business operations and maintain employment. Through this program, the Bank was able to help more than 18 clients. Employees The health, safety, and well-being of our employees are the Bank’s top most priority. Several COVID-19 preventive measures have been implemented to safeguard our employees’ health and ensure safety at the workplace. Since the beginning of the pandemic, the Bank has taken proactive steps to provide access to COVID-19 vaccines for all employees, particularlyhigh-risk frontline employees, covering 80% of high-risk employees in Bangkok and 50% across the country. Simultaneously, the Bank has been strongly encouraging employees to receiveCOVID-19vaccinationthat isprovided by the government and private hospitals. As of 2021, 98% of total employees have been vaccinated and currently, booster shots are being acquired by the Bank for further employee vaccination. During the height of the pandemic where several hospitals were at its full capacity, ttb collaborated with partner hospitals to ensure that employees who were COVID-19 infected would have access to hospitalization, hospitel, telemedicine, and medical assistance as needed. Moreover, theBankperiodicallyconducted COVID-19 screening at all office buildings such as Wongsawang Building, Rama 7. 750,000 customers utilized the debt relief program 18 of clients applied for Asset Warehousing program
17 Introduction Customers Social Governance Appendix Environment Sustainability Report 2021 To further safeguard the health and well-being of employees during this time, the Bank deployed the Bubble and Seal measure for two months which was implemented specifically for the Contact Center teamconsisting of 120 employees. TheBubble andSeal providedan alternative working location with full accommodation to reduce commuting and fallboard services as well as facilities for employees to relax outside of work hours. Split Operation was still on-going in three locations with objectives to reduce employee density at the workplace and ensure business continuity. The Bank elevated workplace safety measures, strengthened social distancing protocol, arranged in-depth workplace cleaning on a weekly basis, and installed filters to reduce the risk of airborne transmission of COVID-19 in office buildings. Community The Bank’s continued support of local communities and the wider society is reflected in the company’s corporate social responsibi l i ty programs. The fai-fah project for instance, encompasses several initiatives such as the Care Box initiative and the entrepreneurial class initiative. The Care Box provides youth and local communities with food and medical supplies through the donation of medical boxes and food boxes to communities in need. This also serves as a source of income for local food vendorsat thecompany’sHeadquarters who supplied food to the Bank’s Care Box initiative. In 2021, a total of 600 medical boxes consisting of basic medical supplies—masks and rubbing alcohol were sent to youth and 24,000 food boxes were sent to 20 communities. The entrepreneurial class initiative, which is part of the fai -fah project , was created in partnershipwithMakroHeroAcademy to support unemployed workers as well as low-income communities who were negatively impacted by the pandemic through skill-building programsandclasses.Theentrepreneurial class was led by a group of restaurant industry experts and professional chefs to help participants build and improve their cooking skills as well as create and strengthen their entrepreneurial knowledge and know-how, setting them up for future career opportunities. Two seasons of the entrepreneurial class were conducted in 2021 with over 500 participants completing the program. Building, and ttbHeadquarters tomitigate the spread of COVID-19 infection. Rapid Antigen Test kits were also distributed to all buildings and split operations in case of emergency. 600 were sent to youth medical boxes 24,000 food boxes were sent to 20 communities
18 Introduction Customers Social Governance Appendix Environment Sustainability Report 2021 Financial Well-being The Bank’s mission to improve our customers’ financial well-being will allow customers to comfortably meet their current commitments and ensure financial resilience into the future. Our goal is to become a trusted advisor by building a long-term relationship and focusing on creating value for customers through the provision of lifelong financial solutions that improve financial well-being. Mindful Spending & Start Saving Buildfinancial discipline tocreate afinancial foundationandsecurity that provides a safety net in case of future emergencies. ttb all free is a transactional account, allowingmore financial management freedom with no transactional feeswhileproviding free necessary protections such as l i fe and accident insurance. ttb no fixed is a savings account with high-interest rates and no fixed term of deposit to help maximize savings. Healthy Borrowing Being in debt is acceptable as long as loans are appropriate and suitable tools are used to ensure that there is a right balance between today’s needs and future liabilities. ttb debt consolidation programs such as ttb cash your home and ttb cash your car combine debts accumulated from credit cards, car loans and personal loans into a single low-interest rate loan that uses the customer’s house or car as collateral. Investing for Future Investment through proper asset allocation by using risk profiles is a crucial step for managing savings to prepare for the future and foster lifelong stability. ttb smart port is a full-service investmentportfoliomanagement for all customers to promote smart investment and financial inclusion. In 2021, the Bank improved this service to become even more inclusive and accessible by a l l owi ng a minimum investment of 1 Baht. Sufficient Protection Recognize the importance of insurance as a tool to mitigate risksandselect relevant insurance that addresses the changing needs of each stages in life. ttb the treasure is a life insurance that assists customers and their families in building lifelong financial stability and financial wealth. With a short payment period of 8 years, customers receive 8% of their pay-back money every year and l ife insuranceuptotheir88th birthday. Once the insurance term is completed, customers receive 888%of their insurancepremium, passing down their wealth to their children. The 4 Pillars of Financial Well-being The Bank defines financial well-being into four fundamental pillars, which underpin the way we work and how our products and services are designed. Highlight products for each pillar
19 Introduction Customers Social Governance Appendix Environment Sustainability Report 2021 Guided by the four pillars of financial well-being, ttb believes that our products and services should provide great functionality to foster our customers’ financial well-being. Rather than focusing on the number of products and services, ttb strives to deliver quality products and holistic solutions to uplift our customers’ financial well-being instead. Our products are designed to complement each other so that they can be tailored to personalize financial solut ions by addressing the needs of our customers through all stages of life. The Bank categorizes customers into four stages of l ife: first jobber, starting a family, successful career, and retirement. Four Stages of Life with Different Needs ttb reserve ttb the treasure ttb ultimate care ttb smart port ttb up and up First Jobber Bu i l d up necessary savings to ensure quality living and pursue their dreams, such as starting own business. Starting a Family Accumulate wealth to build financial stability to ensure that their families have a good quality of life. Successful Career Maximize wealth from a successful career and secure wealth for their children as well as their retirement period. Retirement Maintain wealth, enjoy retirement life, receive health protection, and hand down wealth to their children. ttb reserve ttb smart port ttb the treasure ttb flexi care ttb up and up ttb all free ttb no fixed ttb credit cards ttb smart port ttb all free ttb no fixed ttb credit cards (absolute) ttb smart port Debt consolidation such as CYC/CYH/ cash2care An example of financial solution for each life-stage:
20 Introduction Customers Social Governance Appendix Environment Sustainability Report 2021 Digital Transformation In response to the rise of digital banking accelerated by the COVID-19 pandemic and subsequently, the change in consumer behavior, ttbhasexpeditedtheorganization’s digital transformation through various digital solutions to enhance customer experience and foster their financial well-being. The Bank’s aspirations to be positioned in Thailand’s top three digital banking platforms and deliver a better customer experience through focusing on the digital aspect of omnichannel offerings, have led to the development of TheDigital First operatingmodel launched in 2020. The model was created to drive the adoption of digital solutions while pursuing continuous improvements of the omnichannel customer journey and experience. Essentially, ttb digital banking offers services beyond the convenience of dailybankingoperationsbypersonalizing solutions tailored to customers’ needs in hopes of strengthening customer engagement and relationships with the Bank. >70% ttb touch active users serviced transactions via ttb touch 95% of bill payment 99% of transfer Retail product purchases completed over ttb touch 4.3 ttb smart portfolio increased by times 2.6 Number of savings account increased by times 4.2 Credit card and Cash2Go application increased by times
21 Introduction Customers Social Governance Appendix Environment Sustainability Report 2021 2021 Highlights of Our Digital Solutions Dollar-Cost Averaging and Personal Insurance Features on ttb touch The Bank has been continuously improvingttb touch features to promote customers’ financial well-being by making financial management more convenient and easier. Customers can now do the following: • Invest with dollar-cost averaging (DCA) method to help build savings and wealth over a long period. • Find product details, purchase personal insurance, and pay insurance premium via ttb touch. DRIVE Connect Platform Drive Connect Platform is a free online marketing platform designed for car dealers to create their marketing content via Facebook. The one-cl ick cross-channel can be used to create an account that manages onl ine marketing campaigns across different social media channels; namely, Facebook and Instagram with storefront managemen t and i nven to ry management tools. Data analytics are implemented to analyze customer data and to provide insights to better tailor marketing advertisement. Cost-effectiveness is enhanced through the execut ion of the 24-hour AI monitoring systemwhich searches for target customers that can increase investment efficiency. Lead management is employed to manage custome rs t h rough easy-to-understand functions with real-time lead distribution and notification systems by providing measurable results. Intelligent Dashboard is used for analyzing all marketing campaigns and providing an overview of advertisement performance by focusing on key performance metrics such as returnon investment (ROI), inventorystatus, andcustomer profile. 1 2 4 5 3
22 Introduction Customers Social Governance Appendix Environment Sustainability Report 2021 TheBank’s digital hub, ttb spark, aspires tomake concrete change through implementing digital technology and creative ideas by focusing on agile working when developing solutions, services, and innovations in response to rapid change. The Bank expects to hire approximately 250-300 employees in 2022. Daring Agile Energetic Real fight for what we believe is right for customers fail fast, learn faster always fun & active whatever we do must be tangible Spark New Possibilities Correspondingly, the Bank’s digital transformation process is guided by three key principles focused on creating change from within the organization to deliver meaningful impact to stakeholders. The details of the three principles are as follows: 1. The conviction that a medium-sized bank can transform from within the organization. 2. End-to-end agile work management that fosters cross-functional collaboration across business units by breaking down silos and unlocking new business potential. 3. Extend digital capabilities to subsidiaries to foster economies of scale and ensure sufficient time for marketing financial goods and services. The implementation of the three principles is reflected in the ttb spark initiative, which is a newly founded internal tech unit that ramps up digital resources and focuses on new business development beyond banking solutions.
23 Introduction Customers Social Governance Appendix Environment Sustainability Report 2021 Our Award-winning Digital Transformation ttb business one Supply Chain E-Wallet for Mirt Phol Farmers Punboon.org • Internet banking platform for corporate clients and SMEs which provides a seamless experience to improve customers’ financial well-being and operational efficiency. • 3 Concepts: One Platform is a one-stop solution allowing customers to complete transactions; One toControl enables customers to simplymonitor cashflow in real-time; and One to Command is a single system that uses the Smart Dashboard to comprehensively manage finances. • 80% of clients now use ttb Business One instead of going to the Bank’s retail branches. • Received Best Digital Transformational Implementation Award fromTheAsian Banker ThailandAward 2021. • Supply chain financing solutions promote financial inclusion and financial well-being by enabling farmers to access funds and fertilizer support. • 23,400 farmers used the e-wallet where more than 18,000 transactions were generated. • Received Best Digital Financial Inclusion Project 2020 fromTheAsset TripleAAwards by TheAsset. • Adonationplatformtoconnectdonorsandfoundations. • 178 foundations on theplatformwith49,000donors. • 222,000 transactions to date. • Received Most Innovative Emerging Digital Technologies Project 2019 from The Asset Triple A Awards by The Asset.
24 Introduction Customers Social Governance Appendix Environment Sustainability Report 2021 Customer Experience Withthevisiontobecometherecommendedbankofchoice by our customers, customer is at the heart of our business where the Bank is committed to delivering them the best and most seamless experience, both online and offline. Focusing on ttb’s customer-centric business strategy, customer experience is paramount to determine how well the Bank is doing to fulfill its vision. Customer experience performance is reported monthly to the Customer Experience Management Committee, which is a management-level committee that has oversight of customer experience and ensures that customer complaints are properly managed. The committee is chaired by the CEO with members consisting of the President, Chief Retail Banking Officer, Chief Commercial Banking Officer, Chief Auto Officer, Chief Operating Officer, Chief Information Officer, and Chief Marketing and Experience Officer. Tounderstand ttb’s performanceoncustomer satisfaction, the Bank uses top-down Net Promotor Score (NPS) to measure the willingness of customers to recommend us to others and to gauge the customer’s overall satisfaction with the Bank. Moreover, the Bank uses transactional NPS to measure feedback at a more granular level after experiencing our services. This will enable us to better understand the Bank’s service quality and to identify areas of improvement in the customer journey, product Customer Satisfaction 2018 2019 2020 2021* 2021 Target* Top-Down NPS 54 57 61 61 65 *Note: For 2020-2021, the NPS survey was conducted biannually due to the merger & acquisition in 2020 and the integration of TMB and Thanachart Bank in 2021. and service, and banking channels. The result of transactional NPS in 2021 was at 64%, almost meeting the target of 65%. This past year proved to be full of challenges and changes as a result of the ongoing entire bank transfer between TMB Bank and Thanachart Bank where we strived for a seamless transition of customer transfer and customer onboarding. After the completion of the entire business transfer, the Bank experienced a surge in customer inquiries where our employees worked tirelessly to provide the best possible solutions. The Bank is determined to continuously improve our performance to ensure an excellent customer experience and become the recommended bank of choice by our customers.
25 Introduction Customers Social Governance Appendix Environment Sustainability Report 2021 The customer experience framework consists of four key pillars to ensuremonitoring, measurement, and improvement of the end-to-end process, not just touchpoints, in order to deliver an exceptional customer experience. The tracking dashboard, based on this framework, is used to monitor the overall performance and key indicators, and reported to the Customer ExperienceManagement Committee. Customer Experience Framework Operational KPIs by channels track operational performance of all banking channels including contact center, branch, and mobile internet banking. Transactional NPSmeasurement measure feedback at a more granular level after a customer has experienced our service. Complaint handling analyze root causesof complaints and develop corrective action plans. Voice of customers track and manage incoming inquiries and complaints in timely manner. Complaint handling Voice of customers Operational KPIs by channels Transactional NPS measurement
26 Introduction Customers Social Governance Appendix Environment Sustainability Report 2021 The Bank continues to support complaint management because we genuinely bel ieve that complaint management is an essential component of customer service. It provides valuable insights and helps us better understand the performance of our products and services with a view to improving customer satisfaction. In 2021, there was a structural reorganization of the Customer Care Center department to improve operational and process efficiency for better customer and complaint management. Moreover, a new dedicated function named Customer Complaint Improvement and Support was established to identify potential sources of complaints, tackle the root causes of problems, and correct or prevent those problems from recurring. Root cause analysis and corrective actions are regularly reported to the Customer Management Committee. In 2022, the Bank will focus on three initiatives; sales model revisit, branch efficiency and operational excel lence, and contact center and complaint management overhaul in our continuous efforts to improve customer journey and experience. Complaint Management Breakdown of complaints received by all channels in 2021: The complaints were categorized into three main issues: Institutions/bodies that customers have registered complaints to both direct and indirect: System: for example, transactional errors on ttb touch and ATM/CDM, ttb touch and ATM/CDM were out of services People: for example, queue management and inappropriate behaviors of employees Productandprocess: forexample,customer’s dissatisfaction of loan approval, process errors resulted in missing statements Bank of Thailand Office of The Consumer Protection Board Officer of Insurance Commission Securities and Exchange Commission 4% 4% 7% 85% Call Center Online Channel Branch & Corporate Office Others
27 Introduction Customers Social Governance Appendix Environment Sustainability Report 2021 Environment
28 Introduction Customers Social Governance Appendix Environment Sustainability Report 2021 The Bank manages indirect environmental and social impacts from our business operations through responsible lending and sustainable finance. The Bank has Environmental and Social Responsibility (ESR) Policy that defines an overarching approach to how the Bank manages and mitigatesenvironmental andsocial impacts. From our annual review, there was zero non-compliance to the ESR Policy. In2021, therewaszeroapplication required to develop corrective action plans to mitigate environmental and social risks to the acceptable level. Our Commitment The Bank will exit from the tobacco industry by 2023* * This does not apply to the entire tobacco value chain, specifically parties that are not fully involved in tobacco production (i.e., retailers that sell tobacco products, or companies engaged in transportation and packaging). The Bank will reduce down existing coal-fired power plant projects to zero by 2028 Share of lending by customer segment (% of lending portfolio) 35% Corporate Small SMEs 8% 1% 56% Retail New applications Application that underwent annual review General questionnaire Sector specific questionnaire 3,339 1,540 1,548 486 100% of commercial lending is in line with the ESR Policy Other Top 10 lending by business sector in 2021 (of total lending exclude personal consumption) Chemical Finance Foods Electricity and water supply Construction material Consumer goods retailers Auto wholesalers and parts Healthcare Business services Others 11 Projects were reviewed and approved (100% of total project finance) in alignment to ESR Policy 0 Project was declined Project Finance in 2021 Responsible Lending For more details of the ESR Policy, visit our website: https://www.ttbbank.com/en/sustainability/environmental-sustainability/responsible-lending