OUR VISION To be the Bank of Choice for our customers, shareholders, employees and community. INDEX

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2 OUR VISION To be the Bank of Choice for our customers, shareholders, employees and community. Cover Photo: SCB s 1,000 th Branch at Paradise Park Shopping Complex, Bangkok. INDEX 1 Vision and Mission 4 History 6 SCB Today 8 Change Program 10 SCB s Human Sigma 14 Leading Market Positions 17 SCB Group 18 Distribution Network 22 Financial Performance 28 CSR at SCB 30 Award in 2010 OUR MISSION To be recognized as The Premier Universal Bank through leveraging SCB s financial services franchise; and An exemplary corporate citizen. 1

3 SCB s Siam Paragon Branch Increasingly, glitzy new shopping malls have become a retail shopping beacon for Thais from all segments of the community. SCB s Siam Paragon Branch, like other shopping mall branches, provides an ultra modern, convenient and extended hours service to its customers. Today, SCB has more branches at shopping malls all across the nation than any other bank in Thailand. The Siam Paragon branch, located at one of Asia s most fashionable shopping locations, is open 7 days a week and is very popular with the Bank s customers. It is my privilege to ensure that all our customers leave our branch premises highly satisfied. Pakawan Kraithep Teller, Siam Paragon Branch

4 History In its 104-year history, SCB has grown from a small organization of just 18 employees to one of the largest banks in Thailand with a group employee base over 20,000. The bank has survived times of great adversity, which have included economic depression, bank failures, revolutions and wars. Under circumstances not entirely of its own making, SCB has come close to the brink on more than one occasion, but was able to continue to re-establish itself through the hard work of its employees and the perseverance of its shareholders and customers. Mostly, the bank has enjoyed stunning growth and prosperity, reflecting the country s emergence as a regional economic power. First Thai Bank with Unique Heritage SCB was established by Royal Charter as the first Thai bank in It has a unique heritage and a long history of providing exemplary service to its customers. Founded in an era of geological change, as Europe s powers jostled for position in Asia, SCB was a significant stepping stone in the modernisation of the country set in motion by the great Siamese Kings, Rama IV and Rama V. In the domestic sphere, it was a response to the lack of credible banking services that local businesses and the population at large could rely on. At a time when pawnbrokers were still the predominant source of borrowing for a Siamese people unfamiliar with the notion of a bank, SCB would help to spearhead the change to the local mindset and facilitate the nation s move towards a modern economy. We established our vision some nine years ago, as we started our transformation journey under the SCB Change Program. This vision continues to serve as a beacon to all the employees as we strive, collectively, to be the preferred choice of our customers, investors, and our community. Implicit in the vision is the deeply entrenched desire to establish the Bank as one of the region s great workplaces. We have made great progress towards attaining this vision but in an ever changing landscape, we remain mindful that much more needs to be done to attain this vision. Dr. Vichit Suraphongchai Chairman of the Executive Committee 4 5

5 SCB Today The Bank has 4 business groups: the Wholesale Banking Group; the Business Banking Group (serving SME clients); the Retail Banking Group (serving individuals and small businesses); and the Special Assets Group (mainly facilitating loan restructuring and NPL workout). Also, the Bank has 4 major subsidiaries and associated companies: SCB Securities Co., Ltd.; SCB Asset Management Co., Ltd.; Siam Commercial Samaggi insurance (PLC); and Siam Commercial New York Life Insurance (PCL). Each of these companies provides a unique mix of financial services to meet the needs of its customers. Siam Commercial Bank (PCL) is the leading universal banking group in Thailand, providing a wide array of financial products and services to meet the various needs of its customers across many segments. SCB has the largest footprint (by branch) and highest by market capitalization of all Thai financial institutions. Continuous Transformation through the Change Program Given the highly competitive financial services environment in Thailand, in 2001 SCB adopted a transformational change agenda that has resulted in deep-rooted and fundamental changes to the Bank s business model, structures, processes, systems, and culture. The aim was to re-position the Bank s franchise so that it can excel in each market it competes in and as a result, it is positioned today as a pillar of strength and stability in the Thai economic landscape. With a vision of being the Bank of Choice for our customers, shareholders, employees and community, SCB today has successfully implemented market leading strategies, pursued uncompromising customer satisfaction and engagement standards, and is dedicated to growing exceptional people. Our long history and cherished foundation have placed SCB at the forefront of financial institutions in Thailand. All of us at the Bank are proud of this heritage and mindful of the special obligations it confers on us. Accordingly, we are pledged to enhance our banking franchise across all segments of the Thai people, through innovative products, exemplary service levels and, above all, through galvanizing the spirit of all our employees to deliver a compelling value proposition to all our customers and shareholders. Together, we can. Mrs. Kannikar Chalitaporn President 6 7

6 Change Program The Change Program, initiated in 2001, was the Group's agenda for far-reaching, deep-rooted, and continuous transformation, with the aim of substantively repositioning the SCB franchise. The Change Program has driven the competitive success of the Bank in recent years towards its goal of being the Bank of Choice for our customers, shareholders, employees and community. Phase I: Foundation (Year ) Developed new strategic thrust Implemented new structure and systems Enhanced process efficiency Phase II: Growth (Year ) Refined business model Accelerated development of employee capabilities Institutionalized risk management as core competency Phase III: Differentiation (Year ) Pursed differentiated capability building to develop a unique competitive edge Adopted a new governance model to exploit group synergies Phase IV: Power of One (Year 2009+) Together, we can Change Program IV: Next Level Accelerated building of new capabilities and better leverage from group-wide synergies 8 9

7 SCB s Human Sigma High employee engagement levels have translated into better business performance Building on the employee-customer engagement levels to reach the highest level of Human Sigma. Human Sigma is a measure of effectiveness for the employeecustomer encounter and this measure has a high correlation with financial performance. Taken together, Employee and Customer Engagement are the twin bedrocks of our competitive edge. CE 11 Customer Engagement HS1 HS2 HS3 HS4 HS5 HS6 Maximum Optimization Optimized Emerging Optimization Partial Optimization Marginal Sub-Optimal CE 11 Customer Engagement HS1 HS2 HS3 HS4 HS5 HS6 87.7% 9.4% 2.9% 2006 Continued efforts have driven radical improvement to the Bank's Human Sigma level. Q 12 Employee Engagement Q 12 Employee Engagement 2004 The initial measurement indicated that our positioning was clearly not satisfactory. CE 11 Customer Engagement HS4 HS3 HS2 HS1 Q 12 Employee Engagement HS5 HS6 7.4% 16.8% 75.8% CE 11 Customer Engagement HS4 HS3 HS2 HS1 Q 12 Employee Engagement HS5 HS6 HS6 HS5 HS4 HS3 HS2 HS1 97.1% 1.8% 1.1% 2010 The Bank has now reached a well optimized level of Human Sigma. Figures in boxes are % of branches in each segment = customer/employee engagement per branch (Measured by Gallup Survey) Figures in boxes are % of branches in each segment = customer/employee engagement per branch (Measured by Gallup Survey) 10 11

8 A Business Relationship Center at Bang Kapi (Sukhumvit 45) The 72 business relationship centers of SCB provide a holistic service, with a strong personal touch, to a broad range of SME customers of the Bank. Getting to know our customers, anticipating their needs, and helping them overcome the challenges in growing their businesses are at the heart of our SME business model. Geographical proximity to our customers, attractive products, and proactive services help us better partner with them and assist them in attaining their business aspirations. Paiboon Tangkanokpairoj Regional Manager, Medium-Sized Business Bangkok Region 1 Business Banking

9 Leading Market Positions #1 Mortgage Loan Provider #1 Bancassurance Channel Mortgage Lending : Maintained dominance with approximately 29% market share 1/ among commercial banks. Housing Loans 2/ % yoy 281 Total Bancassurance Premiums 1/ % yoy 20.4 Bancassurance: #1 with 22.5% market share FY06 FY07 FY08 FY09 FY10 5 1/ Market Share for Mortgage portfolio comprised of housing loans and consumer loans 2/ Classified by product, including NPLS 1/ Total life premiums which include individual life and credit life (new premium and renewals) #1 Credit Card Issuer #1 Business Cash Manager Credit Card: #1 in terms of total card spending with 16.6% market share. Credit Card Spending % yoy 135 Key Product Innovation Top-of-Mind Customer Recognition with 4-year in row recognition as Best Cash Management Bank by Asiamoney polls The most innovative electronic banking channels Sophisticated E-Reservation and Payment Solutions Advanced liquidity management systems Key Service Quality Indisputable excellence of service quality with Moneyback guarantee Six Sigma principles to ensure high service quality and process efficiency # 1 position in Product Innovation and Service Quality

10 Leading Market Positions (cont.) SCB Group Mutual Funds: #2 with 25% market share #2 Asset Manager Mutual Fund Asset Under Management (AUM) % yoy 472 Universal Banking Platform of SCB Group The SCB Group has the most complete financial services franchise in Thailand. Through effective leverage of this franchise, it is positioned to emerge as the Premier Universal Bank in the country. SCB Group % 94.7% 100% 59.6% 0 SCB Securities Co., Ltd. (SCBS) SCB Life Assurance Pcl. (SCBLIFE) SCB Asset Management Co., Ltd. (SCBAM) Siam Commercial Samaggi Insurance Pcl. (SCSMG) Continue to be the market leader in Capital Markets as ranked by the Thai Bond Market Association. Capital Market Leader Market share 2010 No. 1 Custodian business 44% No. 1 Lead Underwriter 26% No. 1 Registrar 25% No. 2 Dealer 13% Broad range of financial advisory and securities brokerage services for local and foreign institutional and retail investors. A market leader in bancassurance products. Market leader for mutual, provident, and private funds. SCB Products and Services A provider of non-life products to both SCB and non-scb customers. Retail Banking Treasury Trade Finance Securities Wholesale Banking Business Banking Private Banking Cash Management Hire Purchase Life-Insurance Capital Market Investment General Insurance Corporate Finance Asset Management Factoring 16 17

11 Distribution Network #1 Branch Network in Thailand #1 ATM Network in Thailand SCB has maintained the #1 position in branch and ATM networks among Thai commercial banks since 2005, and continues to have the largest network in ,200 1, , ,000 7,500 6,000 4,500 3,000 1, ,006 7,129 6,030 4,833 3,828 We like Siam Commercial Bank (SCB) for its strong network and retail franchise, on top of strong execution. The bank has successfully developed a retail-banking franchise and controls the largest branch/atm network in the country Bangkok Non - Bangkok #1 FX Booths Network in Thailand ACL Securities / BNP Paribas 4 January

12 A Foreign Exchange Booth at Suvarnabhumi Airport With over 20 foreign exchange booths at Thailand s major international gateway, the SCB Exchange booths provide a much needed 24x7 service to both tourists and business travelers. With 21 different locations, many open on a 24x7 basis, providing an exchange service in 25 different currencies, and deploying Thailand s only foreign currency dispensing ATMs is a tremendous challenge for the Bank at Thailand s major gateway. For me, it is a privilege to support Thailand s tourist industry at this flagship gateway. Hathairat Kumarj Retail Exchange Booth Officer

13 Financial Performance Net Profit ROE & ROA Loan Growth SCB s premium valuation is justified by its strongest deposit franchise, superior ROE of 17% next year, and expanding loan market shares Tisco Securities/Deutsche Bank 3 December 2010 Net Profit 13.3 FY FY FY FY % yoy 24.2 FY ROE (%) ROA (%) FY FY FY FY FY10 Robust profitability with highest ROE and ROA among the big Thai banks Loan growth was broad based, which was the direct result of the Bank s market share growth strategies Loans % yoy 1,059 We are positive on SCB s growth momentum, having seen signs of strong growth after the setback last year. SCB is expected to have continued strong retail and coporate loan growth, while SMEs should continue to contribute to its recovery after the new strategies being implemented Operating Profit Market Capitalization Net Interest Margin NIM widened in 2010 alongside strong loan growth and rising interest rates Phatra Securities/ Merrill Lynch 30 September 2010 Operating Profit 15.0% yoy Market Capitalization Net Interest Margin (%) FY06 FY07 FY08 FY09 FY10 FY06 FY07 FY08 FY09 FY The solid increase in net profit was driven by market share growth in all segments Highest market capitalization among Thai banks

14 Financial Performance (cont.) Non Interest Income Asset Quality We believe that SCB s focus on the consumer segment should help increase the proportion of fee income in its revenue mix, thus translating to better profitability HSBC Global Research 14 January 2011 The growth of non-nii in 2010 was mainly due to robust growth in fee income and higher gain on investments Non-NII 19.6 FY06 Other Income Underwriting Income FY07 FY08 Gain (Loss) on Investment Gain on Exchange % yoy FY09 FY10 Fees & Service Income Significant improvement in asset quality as shown by the decline in NPL ratio Gross NPLs 7.9% % % % % 38.7 NPL ratio (%) 10% 8% 6% 4% 2% continued disposal of legacy NPLs and a slow down in expensive branch build-out will provide structural support to ROA expansion Credit Suisse 4 August 2010 Operating Expenses Capital Adequacy Ratio Operating expenses rose 8.6% yoy but cost to income ratio fell to 50.0% Strong capital base to support growth and emerging regulatory requirements Operating Expense 52.7 % 53.0 % 49.4 % 51.5 % Cost to Income Ratio (%) +8.6% yoy 50.0 % 60 % 55 % 50 % Capital Adequacy Ratio Basel II Standardized Approach 20% 15% 10% 14.4% 3.0% 13.1% 2.5% 15.2% 4.2% 16.5% 4.2% 15.5% 3.9% % 5% 11.4% 10.6% 11.0% 12.3% 11.6% % 0% 24 25

15 SCB's Electronic Banking SCB launched the first internet banking service in Thailand more than 11 years ago. Today it is a leader in electronic banking for both retail and business customers. SCB s range of electronic banking services is convenient and functionally rich. The 24x7 internet channel (SCB Easy Net), telephone banking (SCB Easy Phone), and mobile banking (SCB Mobile Banking and SCB SMS Alert) allow me a 24x7 service, together with anywhere access to my accounts. Woradej Hongsrisuwan SCB Electronic Banking Customer

16 CSR at SCB SCB Challenge SCB Blood Donation Drive Art Therapy for Youth Underpriviledged Children Outing SCB regards Corporate Social Responsibility (CSR) activities as a core element of its overall vision, and has consistently supported and participated in public service and charitable activities. Importantly, the Bank continues to set aside more than Baht 200 million of the Bank's annual net profit to support CSR Programs. The campaigns dedicated to CSR projects include the following: SCB Challenge Every year, more than 7,000 youths nationwide gather to express their creativity, knowledge, capabilities, potential, and team spirit in 3 challenging competitions organized by the Bank: Painting competition for elementary schools Quiz competition for secondary schools Community project competition for universities SCB Let's Do Good Campaign Establishing civic awareness and a spirit of voluntarism among SCB staff is one of the key goals in encouraging social responsibility at every level within the Bank. SCB encourages such awareness building among its employees in order to foster greater responsibility for the well being of the community. Activities under the SCB Let's Do Good campaign include: SCB blood donation drive Art Therapy for the Youth Underprivileged children s outing Libraries for schools in remote areas Shred to Share used paper recycling campaign Mangrove reforestation project 28 29

17 Awards in 2010 Overall Performance Best Emerging Market Bank (Best Bank) in Thailand (Global Finance) Best Domestic Bank in Thailand (The Asset) Best Bank in Thailand (Alpha South East Asia) Business / IT Excellence Award (IDC) Corporate Governance Asia Recognition Award (Corporate Governance Asia) Asia's Best Employer Brand Award (Employer Branding Institute) Trusted Brand Gold Award in Bank (Reader's Digest) 30 31

18 Awards in 2010 (cont.) Business Units Retail Banking Group Excellence in Mortgage and Home Loans Award 2009 in Asia (The Asian Banker) Best Local Private Bank (Euromoney) Best Wealth Management Bank (Alpha South East Asia) Trusted Brand Gold Award in Credit Card Issuing Bank (Reader's Digest) Wholesale Banking Group Capital Markets Best Transaction Bank in Thailand (The Asset) Best Domestic Custodian in Thailand (The Asset) Best Domestic Bond House in Thailand (The Asset) Best Debt House in Thailand (Asiamoney) Best Bond House in Thailand (Finance Asia) Excellence Award EURO and US Dollar STP Remittance (Deutsche Bank AG) Top Underwriter 2009 (Thai Bond Market Association) MOF Award 2009 (Thai Bond Market Association) Deal of the Year 2009 (Thai Bond Market Association) Business Cash Management Services Best Local Cash Management Bank (Asiamoney) Best Local Currency Cash Management Services (Asiamoney) Best Cash Management Bank in Thailand (The Asset) Best Cash Management Bank (Alpha South East Asia) Treasury Best Foreign Exchange Bank in Thailand (FinanceAsia) Best Foreign Exchange Bank in Thailand (Global Finance) Subsidiaries Best Equity Fund Award 2009 (SCB Asset Management) (Morningstar Group and Money & Wealth) The Siam Commercial Bank PCL. Investor Relations 9 Ratchadapisek Road, Jatujak, Bangkok 10900, Thailand Tel: Investor.relations@scb.co.th 32