K-IRQ: 3Q16 Page1

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KBank IR Consensus Survey

From October 3-6, 2016, the Investor Relations Unit conducted the 3Q16 consensus survey among local and foreign analysts to document their opinions, recommendations, and earnings estimates for KBank, and to get their general views on the Thai banking industry. Thirty-three analysts, from 41 brokerage firms that currently cover KBank shares, responded to the survey. Ten analysts did not provide a 3Q16 earnings forecast. The results are shown below. 3Q16 Earnings Forecasts

Third Quarter 2016

V o l . 2 N o . 4

At a glance

K B a n k I n t e r e s t r a t e s

Deposits (%) (%) Effective Date

Savings 0.50 14 Mar 14

Fixed-3m 0.90 11 Oct 16

Fixed-6m 1.15 11 Oct 16

Fixed-12m 1.30 11 Oct 16

Fixed-24m 1.45 11 Oct 16

Fixed-36m 1.60 11 Oct 16

Lending (%) Effective Date

MLR 6.25 25 Apr 16

MOR 7.12 25 Apr 16

MRR 7.62 25 Apr 16

Max rate MRR+5.00 25 Apr 16 Note: Interest rates above are for domestic retail customers

K B a n k N P L g r o s s

Bank Consol

Bt bn % Bt bn %

3Q15 44.2 2.52 46.0 2.62

4Q15 47.6 2.61 49.5 2.70

1Q16 51.1 2.72 52.9 2.81

2Q16 54.8 2.80 56.7 2.89

3Q16* n.a. n.a. 64.9 3.35 Note: * In 3Q16, KBank NPL net stood at 1.75% on the consolidated basis. NPL net is NPL after allowance for doubtful account of NPL.

I n d u s t r y ( 1 9 T h a i b a n k s )

Sep 16 (Bt bn) Chg(%)

Bank only YoY MoM

Loans 11,233 3.1 0.8

Assets 15,755 1.8 -0.6

Deposits 11,239 1.4 -0.6

Equity 1,844 9.4 0.8

NPL gross 389

NPL gross% 3.1

NPL net 183

NPL net % 1.5

LDR (%) 100.0

Source: Bank of Thailand

K B a n k P r ice P er f or m a nc e

Close 09/11/16

SET Index 1,509.43

Bank Sector Index 481.66

KBANK/L (Bt) 170.50

3 Months (% chg) -15.17

6 Months (% chg) 4.60

1 Year (% chg) -3.40

KBANK/F (Bt) 170.50

3 Months (% chg) -15.17

6 Months (% chg) 3.96

1 Year (% chg) -4.48

KBank Mkt. Cap. (Bt bn) 408

Note: Outstanding shares = 2,393,260,193 as of April 17, 2008. Source: KBank

KBank Price Performance (3Q16)

Source: Bloomberg

3000

No. of analysts

Bt bn

Note: KBank’s 3Q16 actual profit was Bt10,856mn, on the consolidated basis

N = 23 Mean = Bt10.4bn SD = Bt581mn

From CIRO

Dear KBank investors and analysts, KBank posted 3Q16 net profits of Bt10,856mn, showing an increase of 15.16% QoQ and 7.31% YoY, mainly because KBank has set a lower allowance for impairment loss on loans. Loans continued to grow in line with economic growth, at 3.83% YTD, driven mainly by corporate and SME business. NIM stood at 3.45% in 3Q16 and 3.55% in 9M16. Non-interest income in 3Q16 dropped 0.48% QoQ and 3.60% YoY while 9M16 non-interest income rose 1.25%YoY, from net fees and service income and gains on investment. Net premium earned-net dropped in line with the pace of the economy. Overall asset quality remained manageable. NPL ratio in 3Q16 was 3.35%, increasing from 2.89% in the previous quarter. NPL will start to fall in 4Q16 and stabilize and move within a narrow range in 2017. Credit cost in 3Q16 dropped to 165bps from 213bps in 2Q16, resulting in 9M16 credit cost standing at 218bps. However, credit cost will lag behind NPL movement and peak in 2017. 3Q16 coverage ratio stood at 127.27%. Cost to income ratio was 41.79% in 3Q16 and 40.13% in 9M16, as a result of cost and productivity management. Capital Adequacy Ratio (CAR) in 3Q16, according to the Basel III Accord, stood at 19.46% with a Tier 1 capital ratio of 15.69%, remaining sufficient to support business growth. Recently, KBank conducted the Annual Analyst and Thai Fund Manager meeting and held the Annual Non-deal Roadshow to meet our shareholders and investors in Singapore, Hong Kong, the UK, and the US. KBank’s 2017 financial targets have been announced, as shown in Investor Presentation: October 2016. More details on 2017 Financial Targets can be found on page 4 of this K-IRQ or on our website at: http://www.kasikornbank.com/EN//Investors/PresentationJournal/pages/PresentationWebCast.aspx The Thai economy is expected to grow 3.3% (range of 3.0-3.6%) in 2017, driven by domestic demand with the expectation of a crowding-in effect of public investment and private investment. An improvement in commodity prices will positively contribute to exports amid global economic risks. The key summaries of KBank’s 2017 financial targets are as follows: 1. 4-6% loan growth, in line with the pace of economic growth 2. Up to 5% non-interest income growth, reflecting a large base effect, in line with the economy and uncertainty

factors e.g. National e-payment 3. Mid-40s cost to income ratio, focusing on cost management under pressure from income slowdown 4. Peak credit cost in 2017, lagging NPL movement, in the range of 200-225bps 5. Stabilized NPL ratio, moving in a narrow range of 3.3-3.4% We hope you find this publication useful and insightful. Please feel free to contact the KBank IR team directly with any inquiries you may have. Comments and suggestions are always welcome. Best regards, Adit Laixuthai, Ph.D. Senior Executive Vice President and Corporate Secretary Chief Investor Relations Officer

K-IRQ: 3Q16 Page2

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Bank Financial Summary (Consolidated) 3Q16

Balance Sheet

3Q16 2Q16 QoQ 3Q15 YoY

(Bt mn) (Bt mn) %Chg (Bt mn) %Chg Cash 50,548 47,940 5.4 38,869 30.0

Interbank & Money Market Items 351,110 378,597 (7.3) 311,705 12.6

Claims on security 8 5 76.1 0 3,001.1

Derivatives assets 26,799 30,117 (11.0) 47,280 (43.3)

Investments 584,136 524,168 11.4 475,932 22.7

Loans* 1,671,545 1,663,968 0.5 1,577,780 5.9

Accrued interest receivables (AIR) 3,398 3,254 4.4 3,003 13.2

Total Reserves 82,628 77,281 6.9 60,597 36.4

Loans & AIR - net 1,592,314 1,589,940 0.1 1,520,186 4.7

Properties foreclosed 14,787 14,834 (0.3) 12,923 14.4

Premises & equipment 49,491 49,650 (0.3) 45,132 9.7

Intangible assets 23,615 23,718 (0.4) 26,394 (10.5)

Deferred tax assets 4,364 4,195 4.0 4,655 (6.3)

Other assets 35,235 31,099 13.3 35,731 (1.4)

Total Assets 2,742,207 2,705,154 1.4 2,538,678 8.0

Deposits 1,774,377 1,742,114 1.9 1,677,008 5.8

Interbank & Money Market items 145,170 166,347 (12.7) 112,319 29.2

Derivatives liabilities 28,529 32,632 (12.6) 51,386 (44.5)

Debt issued and borrowings 81,079 80,268 1.0 79,099 2.5

Provisions 24,171 23,872 1.3 21,028 14.9

Deferred tax liabilities 1,865 1,882 (0.9) 1,908 (2.3)

Life policy reserve 292,075 281,091 3.9 239,184 22.1

Other liabilities 53,106 47,140 12.7 49,933 6.4

Total Liabilities 2,400,372 2,375,345 1.1 2,231,867 7.5

Fully paid-up share capital 23,933 23,933 0.0 23,933 0.0

Premium on common share 18,103 18,103 0.0 18,103 0.0

Other reserves 20,363 19,678 3.5 15,157 34.3

Retained earnings 248,180 238,318 4.1 223,689 10.9

Total Shareholders' Equity 341,835 329,810 3.6 306,812 11.4

- Owners of the Bank 310,579 300,031 3.5 280,882 10.6

- Non-controlling interest 31,256 29,778 5.0 25,930 20.5

Liab & Shareholders' Equity 2,742,207 2,705,154 1.4 2,538,678 8.0

Income Statement 3Q16 2Q16 QoQ 3Q15 YoY (Bt mn) (Bt mn) %Chg (Bt mn) %Chg

Net interest income 22,351 22,123 1.0 21,094 6.0

Net Fee and service income 9,924 9,411 5.4 9,401 5.6

Other income 24,306 26,615 (8.7) 22,637 7.4

Underwriting expenses 18,756 20,479 (8.4) 15,987 17.3

Net operating income 37,824 37,670 0.4 37,145 1.8

Total other operating expenses 15,808 15,647 1.0 15,460 2.3

Provision expenses 6,867 8,721 (21.3) 7,507 (8.5)

Profit before income tax 15,149 13,302 13.9 14,178 6.8

Income tax expense 2,958 2,440 21.3 2,743 7.9

Net profit attributable to:

- Owners of the Bank 10,856 9,427 15.2 10,117 7.3

- Non-controlling interest 1,334 1,435 (7.0) 1,318 1.2

EPS 4.54 3.94 15.2 4.23 7.3

Other income 3Q16 2Q16 QoQ 3Q15 YoY (Bt mn (Bt mn) %Chg (Bt mn) %Chg

Gain (loss) on trading and foreign exchange

transactions 2,368 1,624 45.8 2,718 (12.9)

Gains (loss) on financial liabilities designated at fair

value through profit or loss 2 0 (983.3) (1) (456.7)

Gain (loss) on investments 358 147 143.5 244 46.9

Share of profit from investment using equity method 40 24 67.2 21 88.5

Dividend income 396 600 (34.1) 417 (5.0)

Net premiums earned 20,866 23,796 (12.3) 18,963 10.0

Other operating income 274 424 (35.3) 275 (0.4)

Total other income 24,306 26,615 (8.7) 22,637 7.4

Total other operating expenses 3Q16 2Q16 QoQ 3Q15 YoY (Bt mn) (Bt mn) %Chg (Bt mn) %Chg

Employee's expenses 7,910 7,073 11.8 7,043 12.3

Directors' remuneration 23 80 (70.8) 22 4.6

Premises and equipment expenses 2,954 3,211 (8.0) 3,275 (9.8)

Taxes and duties 1,104 1,101 0.3 992 11.3

Others 3,816 4,183 (8.8) 4,127 (7.5)

Total other operating expenses 15,808 15,647 1.0 15,460 (2.3)

Notes: * Loans = Loans to customers less deferred revenue

Performance (%) 3Q16 2Q16 1Q16 4Q15 3Q15 ROA 1.59 1.41 1.48 0.86 1.60

ROE 14.22 12.79 13.41 7.73 14.62

Interest spread 3.15 3.19 3.32 3.35 3.24

NIM 3.45 3.49 3.62 3.66 3.57

Cost-to-Income Ratio 41.79 41.54 37.21 54.55 41.62 Notes: 1) ROA, ROE and NIM are calculated using QoQ averages of total assets, total shareholders’ equities and total earning assets, respectively, as denominators

Asset Quality &

CAR (%) 3Q16 2Q16 1Q16 4Q15 3Q15

Asset Quality (%)

Total reserve / Loans 4.9 4.6 4.4 4.0 3.8

Total reserve / NPL gross 127.3 136.2 135.1 130.0 131.6

CAR (%)*

Tier I 15.69 14.69 14.88 14.53 14.61

> Common Equity Tier I 15.69 14.69 14.88 14.53 14.61

Tier II 3.77 3.43 3.48 3.47 3.12

CAR 19.46 18.12 18.36 18.00 17.73 Note: *Capital Adequacy Ratio (CAR) has been reported in accordance with Basel III Capital Requirement from 1 January 2013 onwards. CAR is based on KASIKORNBANK FINANCIAL CONGLOMERATE. Deposit Structure (%) 3Q16 2Q16 1Q16 4Q15 3Q15

Current 5.3 5.8 5.4 5.5 5.0

Savings 70.0 69.6 68.9 67.0 65.0

Fixed 3 - 5 months 10.3 8.1 9.7 12.0 9.4

Fixed 6 -11 months 7.3 9.5 8.9 5.3 5.1

Fixed 12 months and upward 7.2 7.0 7.1 10.2 15.5

Total 100.0 100.0 100.0 100.0 100.0

Loan Structure (%) 3Q16 2Q16 1Q16 4Q15 3Q15

Corporate Loans 31 31 29 29 30

SME Loans 38 38 38 38 38

Retail Loans 25 25 26 26 26

Other Loans 6 6 6 6 6

Total 100 100 100 100 100

3Q16 Performance: KBank recorded a 3Q16 net profit of Bt10,856mn, increasing 15.16% QoQ and 7.31% YoY. Net interest income increased by 1.03% QoQ, resulting in an NIM of 3.45% in 3Q16. Loans grew 3.83% YTD and 5.94% YoY, mainly from corporate and SME business. Non-interest income decreased 0.48% QoQ and 3.60% YoY, due to net premium earned-net dropping in line with the pace of the economy. Other operating expenses increased 1.03% QoQ, due to an increase in employee’s expenses, while promotion, advertising, and marketing expenses decreased. Cost to income ratio was at 41.79% in 3Q16 and 40.13% in 9M16, resulting from cost and productivity management; it will be seasonally higher in 2H16. KASIKORNBANK FINANCIAL CONGLOMERATE’s CAR, according to Basel III, was 19.46% with a Tier 1 ratio of 15.69%.

NPL Movement: NPL ratio increased from 2.89% in 2Q16 to 3.35% in 3Q16, and will start to fall in 4Q16. Asset quality remained manageable. 3Q16 credit cost dropped to 165bps, resulting in 9M16 credit cost standing at 218bps, prudent and aligned with the macro environment and credit cycle. Coverage ratio decreased to 127.27%.

K-IRQ: 3Q16 Page3

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3Q16 Performance Based on Consolidated Financial Statements

Interest Income Interest income increased 1.14% QoQ, and 1.56% YoY.

Interest income from investments was Bt3,849mn, increasing Bt467mn or 13.81% QoQ, mainly due to an increase in average volume of investments.

Interest income from loans to customers was Bt22,245mn, decreasing Bt162mn or 0.73% QoQ, due to a decrease in average interest rate on loans.

Interest Expenses Interest expenses increased 1.52% QoQ, but decreased 10.98% YoY.

Interest expenses from interbank and money market items was Bt549mn, increasing Bt108mn or 24.33% QoQ, mainly due to an increase in average volume of private REPO.

Non-interest Income Non-interest income decreased 0.48% QoQ, and 3.60% YoY.

Net fees and service income was Bt9,923mn, increasing Bt512mn or 5.45% QoQ, mainly due to brokerage fees, fees from money transfer, and fees from acceptance, aval, and guarantee.

Net insurance premiums was Bt2,109mn, decreasing Bt1,208mn or 36.39% QoQ, according to economic circumstances.

Other income was Bt3,441mn, increasing Bt622mn or 21.99% QoQ, mainly due to revenue from financial market products.

Total Other Operating Expenses Total other operating expenses increased 1.03% QoQ, due to an increase in employee’s expenses, while promotion,

advertising, and marketing expenses decreased. Employee's expenses were Bt7,910mn, increasing Bt837mn or 11.84% QoQ.

Impairment Loss on Loans and Debt Securities (Provision) Provisioning expenses decreased 21.26% QoQ

Provisioning expenses was Bt6,867mn, decreasing Bt1,854mn or 21.26% QoQ.

Credit cost decreased to 165bps in 3Q16 and 218bps in 9M16.

Coverage ratio decreased to 127.27% in 3Q16 from 136.21% in 2Q16.

Capital Funds Capital Adequacy Ratio (CAR): KBank is reporting the capital ratio in accordance with the Basel III Capital

Requirement since 2013; the Bank’s capital adequacy remains sufficient to support business growth.

Capital Adequacy Ratio (CAR): as of 3Q16, KASIKORNBANK FINANCIAL CONGLOMERATE’s CAR was at 19.46%, with a Tier 1 ratio of 15.69%.

Summary:

KBank’s net profits for 3Q16 totaled Bt10,856mn, increasing 15.16% QoQ and 7.31% YoY. NIM dropped to 3.45% in 3Q16, remaining top among large Thai banks. Non-interest income decreased 0.48% QoQ and 3.60% YoY; net fees and service income increased 5.45% QoQ and 5.56% YoY. 3Q16 loans grew 3.83%YTD and 5.94% YoY, mainly from corporate and SME business. In addition, total other operating expenses increased 1.03% QoQ, due to an increase in employee’s expenses, while promotion, advertising, and marketing expenses decreased. Cost to income ratio was at 41.79% in 3Q16 and 40.13% in 9M16, as a result of cost and productivity management; it will be seasonally higher in 2H16. NPL ratio increased from 2.89% in 2Q16 to 3.35% in 3Q16; asset quality remained manageable. Capital remains sufficient to support business growth, with CAR at 19.46% and a Tier 1 ratio of 15.69%.

K-IRQ: 3Q16 Page4

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Hot Stuffs

2017 Financial Targets Source: KBank

7

Consolidated 2015 Actual 9M16 Actual 2016 Targets 2017 Targets Notes

ROE 14.54% 13.38% N/A N/A

ROA 1.60% 1.51% N/A N/A

NIM 3.67% 3.55% 3.3-3.5% 3.3-3.5%Ranking maintained among large commercial

banks (Page 52)

Loan Growth 5.42% YoY3.83% YTD

5.94% YoY6-7% 4-6%

Decent and sustainable loan growth; in line with

economic growth; subject to the success of

government measures (Page 8 and 60-63)

Non-Interest Income Growth* 12.57% YoY 1.25% YoY Up to 10% Up to 5% Sensible growth from fee-driven businesses,

reflects large base effect; in line with the economy

and uncertainty factors, e.g. national e-payment

(Page 9 and 54-58) Non-Interest Income Ratio 42.37% 42.15% About 40% About 40%

Cost to Income Ratio** 45.19% 40.13% 45.0 – 47.0% Mid-40sFocus on cost management under pressure from

income slowdown (Page 11)

Credit Cost per year (bps) 168 bps 218 bps Up to 190 bps 200-225 bps NPL ratio will start to fall in 4Q16; stabilize and

move in a narrow range in 2017; credit cost will lag

the NPL movement, and peak in 2017

(Page 10, 42, 64-65)NPL Ratio (Gross)*** 2.70% 3.35% 3.5-3.6% 3.3-3.4%

* Non-Interest Income includes Net Premium Earned - net (Net Premium Earned less Underwriting Expenses) from Muang Thai Life Assurance PCL (MTL); KBank has a 38.25% economic interest in MTL; on the

consolidated basis, Bancassurance fees are not included in net fee income, due to the elimination of inter-company transactions (the accounting treatment from the Muang Thai Group Holding consolidation);

Non-Interest Income = Total Operating Income – net less Interest Income – net

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

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

calculation are loans to general customers and loans to financial institutions

2017 Financial Targets

Note:

Composition of Growth: Loans by Business Source: KBank

8

Composition of Growth: Loans by Business

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

Loan Definition (more details on loans can be found in App. page 61-62)

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

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

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

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

Moderate loan growth momentum in line with full-year target

9M16 2017 Outlook

Corporate

Loans Mainly from commerce, gems and jewelry, and utilities

Growth target from large public/private investment projects; focusing on

construction, construction materials, telecommunications, and real estate

Focus on industries related to domestic consumption and tourism

SME

Loans

Mainly from short-term domestic credits from construction and

construction materials, hotels and restaurants, food and

beverage, and automotive and parts

Growth target reflects domestic consumption demand, government stimulus

measures, and international trade benefits of AEC

Focus industries: construction, construction materials, automotive and parts,

and hardware

Retail

Loans

Mainly from mortgage loans, with cautious growth by selecting

high potential customers and proactively monitoring loan

portfolio quality

Sustainable growth target in line with industry; maintain lead market position in

key products

Focus on potential target customers with acceptable risk; proactively monitor

and strictly control loan portfolio quality

Loan Portfolio Loan Portfolio Structure

* December 2015 loan base is not comparable with previous reports, due to customer migration to larger segments and changes to comply with TFRS 8

Bt bn Consolidated 9M16 9M16

Dec15* 9M16 Loan Growth Yield Range

(%YTD) (%) 2016 2017

Corporate Loans 468 511 9.1% 3-5% 4-6% 4-6%

SME Loans 618 642 3.9% 6-8% 5-7% 4-6%

Retail Loans 422 420 (0.6%) 5-7% 5-7% 5-7%

Other Loans 102 99 (2.4%)

Total Loans 1,610 1,672 3.8% 5.8% 6-7% 4-6%

Amount (Bt bn) Loan Growth Target

(%)

3 3 3 38 38

31 31

30 31

0

400

800

1,200

1,600

2,000

01 013 014 01 9M16

Corporate

SME

Retail

Others

1,327

1,5271,439

1,610 1,672

Note: These two slides can also be found on pages 7-8 of our latest investor presentation (Investor Presentation as of 3Q16: October 2016), available on our website at: http://www.kasikornbank.com/EN//Investors/PresentationJournal/pages/PresentationWebCast.aspx

K-IRQ: 3Q16 Page5

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KASIKORNBANK: What’s Up?

Corporate, SME, Retail, and World Businesses Highlights

August 16: KBank introduced the Green DNA program, inviting KBank employees to participate in voluntary activities benefitting the society and environment, a move to embed the concept of doing good deeds for sustainability into our collective conscience at the “DNA” level

September 16: KBank and Thai Ambassador to Myanmar jointly organized the seminar "Digital Revolution: A New Era of Banking" to exchange knowledge with the Myanmar public sector and financial institutions about digital payment systems and formulating financial guidelines and policies in the digital era

September 16: KBank opened “KBank Private Banking Academy – Class 2” program, under the theme of KBank Private Banking Next Generation 2016, held for successors of high net worth individuals, offering in-depth knowledge and analysis for investment in diverse assets, as well as asset allocation with systematic risk management

August 16: KBank and state-owned

Tokyo Metropolitan Small and Medium

Enterprise Support Center jointly

organized the “Present and Future of

‘Thailand Plus One’ Strategy: Moving

Forward to Business Prosperity”

seminar to share policies and views on

Japanese companies’ investment

expansion in Thailand

August 16: KBank arranged a seminar entitled “A Revamp for Thailand’s Construction SMEs in 2H16,” which was organized to equip local SME operators with insights into the construction industry, adjustment strategies, and fresh business ideas for the second half of this year

August 16: KBank launched Taweesup Extra, featuring a special fixed deposit that offers the highest interest rate in the market right now at 3.3% p.a. Depositors are required to make monthly deposits for two consecutive years and receive the principal plus interest upon maturity. Taweesup Extra offers customers good savings options as well as life insurance protection

August 16: KBank and the Football

Association of Thailand (FA Thailand)

introduced the ‘Chang-Suek’

KASIKORNTHAI Debit Card, offering

a variety of privileges while providing

an opportunity to support the Thai

football industry

September 16: KBank launched the Small Business Booster Package – a loan scheme specifically designed for our Small Business customers with an annual sales turnover of not more than 10 million baht who are in need of working capital or funding for business expansion

Awards and Recognition

July 16: KBank introduced the “House Purchase with Super Value for Money” campaign. Under this program, customers who apply for K-Home Loan and buy home loan insurance from August 1 to November 30, 2016 will be offered an interest-free installment plan for three months and credit limit of up to 100 percent of home value

September 16: KBank received Best Bank in Thailand 2016 in the Country Awards for Achievement 2016, organized by FinanceAsia

September 16: KBank received Domestic Retail Bank of the Year in Thailand and Digital Banking Initiative of the Year in Thailand, organized by Asian Banking & Finance Magazine

July 16: KBank received Best Mobile Banking Product in Thailand and Best Credit Card Product in Thailand, based on The Asian Banker Thailand Country Awards 2016 held by The Asian Banker

K-IRQ: 3Q16 Page6

6

Econ: Wrap-up

Economic Summary – September 2016

Source: Bank of Thailand

Jun 16

Jul 16

Aug 16

Sep 16

Industrial Capacity Utilization (%) 66.7 62.4 64.4 65.2

Consumer Price Index: (Headline)(%) 0.38 0.10 0.29 0.38

Consumer Price Index: (Core) (%) 0.80 0.76 0.79 0.75

Export (US$mn) 18,431 17,366 18,238 19,303

Export (%chg) 3.2 -5.0 2.7 3.5

Import (US$mn) 14,977 14,850 15,502 15,582

Import (%chg) -9.5 -8.5 -0.1 1.7

Trade Balance (US$mn) 3,455 2,516 2,736 3,721

Current Account Balance (US$mn) 3,116 3,557 3,805 2,929

Financial Account (US$mn) -77 -2,679 -937 -3,194

Balance of Payments (US$mn) 1,860 12 1,874 -1,108

Interbank Rate (%) 1.40 1.40 1.40 1.40

Official Reserves (US$bn) 178.7 180.2 180.8 180.5

Exchange Rate (Baht: US$) 35.13 34.82 34.61 34.66

Highlights for September 2016

Overall: The Thai economy expanded at a higher rate than last month. Public spending expanded as well and remained an important growth driver. Exports improved in

many categories, which helped compensate for the initial effects on tourism following the government’s regulation on zero-dollar tour operators. Private investment increased

somewhat in certain sectors as reflected by larger imported capital goods of export-oriented manufacturing sectors. Meanwhile, private consumption expanded at a lower rate

relative to earlier periods due to lower spending on non-durable goods.

Manufacturing production: Manufacturing activities gradually picked-up in line with exports.

Domestic spending: Private consumption expanded YoY, although at a slower pace than earlier periods, in accordance with spending on consumer products. Meanwhile,

supporting factors for overall consumption remained soft. Non-farm income stayed flat and consumer confidence slightly dropped from last month after accelerating due to the

referendum result to accept the draft constitution and the better-than-expected second quarter GDP figure.

Inflation: Headline inflation slightly increased MoM due to higher oil prices.

Trade Balance: Export value totaled USD19.3bn, up by 3.5% YoY or 3.9% YoY, excluding gold. The expansion was observed in many categories. Exports of electronic

products benefited from the production of new smartphone models. Exports of electrical appliances were driven by capacity expansion to meet rising demand from various

markets, especially CLMV, Europe, and the US. Import value totaled USD15.6bn, resulting in a trade surplus of USD3.7bn. The service and transfers account had a deficit of

USD0.8bn and the current account recorded a surplus of USD2.9bn.

Note: For more information on monthly economic conditions, please visit: https://www.bot.or.th/English/MonetaryPolicy/EconomicConditions/Pages/default.aspx

Economic Outlook for 2017 Source: KASIKORN RESEARCH CENTER CO., LTD. (September 28, 2016)

5

Key Points:

Risk Factors:

Operating Environment: Economic Outlook for 2017 Key GDP Forecasts and Assumptions

2.83.3 -

0.0

3.0

6.0

2016F 2017F

% Y

oY

Chinese economic uncertainty

Volatile funds flows

Geopolitical tension

Spillovers from BREXIT

% YoY

Range Base Case

GDP 2.8 3.3 3.0-3.6 3.3

Private Consumption 2.1 2.7 2.0-2.4 2.2

Government Consumption 2.2 3.6 3.0-3.4 3.2

Total Investment 4.7 3.8 3.0-5.0 4.4

- Public investment 29.8 11.5 6.5-10.5 8.5

- Private investment -2.0 1.3 1.8-2.7 2.3

Gov't Budget Deficit (% of GDP) -2.9 -2.9 -3.0 to -2.5 -2.7

Exports (Customs Basis) -5.8 -1.8 -2.0 to 2.3 0.8

Imports (Customs Basis) -11.0 -6.6 0.2-4.5 2.0

Current Account (USD bn) 32.1 39.5 30.2 - 45.0 39.6

Headline Inflation -0.9 0.3 1.3-2.3 1.8

Policy Interest Rate** 1.50 1.50 1.50

2016F*

2017F*

2015

Domestic demand will continue to drive Thai economic

growth in 2017, with the expectation of crowding in

effect of public investment on private investment

A rebound in commodity prices will positively contribute

to exports amid global economic risks

Given the high base effect in 2016, the projected base

case for GDP growth in 2017 is 3.3% (range 3.0-3.6%)

Notes: The current MPC’s policy rate is at 1.50%

Source: * KResearch (as of September 28, 2016)

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

K-IRQ: 3Q16 Page7

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