2018 February 28 , 2018

Ref. KTB.ACC. 525/2018 February 28 , 2018 The President The Stock Exchange of Thailand Bangkok Dear Sir, Re : Submission of the Financial Statements K...

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Ref. KTB.ACC. 525/2018 February 28 , 2018 The President The Stock Exchange of Thailand Bangkok Dear Sir, Re : Submission of the Financial Statements Krung Thai Bank Public Company Limited (“The Bank”) hereby submits the audited financial statements of the Bank and its subsidiaries for the year ended December 31, 2017 together with the operating performance as follows: The Bank and its subsidiaries’ operating results for the year ended December 31, 2017 show the net interest income of Bt.85,778m, a decrease of Bt.1,188m or 1.37% over the Bt.86,966m of the corresponding period of 2016. Net profit before income tax and allowance for doubtful accounts of Bt.73,741m shows a decrease of Bt.316m or 0.43% over the Bt.74,057m of the corresponding period of 2016. After deducting income tax and allowance for doubtful accounts of Bt.49,631m, net profit is Bt.24,110m, a decrease of Bt.9,455m or 28.17% over the Bt.33,565m of the corresponding period of 2016. Net profit attributable to Equity holders of the Bank is Bt.22,440m, a decrease of Bt.9,864m or 30.53% over the Bt.32,304m of the corresponding period of 2016. The Bank and its subsidiaries’ gross non-performing loans (NPLs) as at December 31, 2017 are Bt.103,020m, an increase of Bt.11,892m or 13.05% from Bt.91,128m as at December 31, 2016. The ratio of NPLs to loans increased to 4.19% compared with 3.97% as at December 31, 2016. Net non-performing loans (NPLs) are Bt.42,506m and net NPLs ratio are 1.77%. In 2017, the Bank and its subsidiaries set aside provision for impairment loss of loans and debt securities amounted to Bt.44,833m, increased by Bt.11,404m (34.11%) compared to the year 2016. The bank set aside more provision to be a buffer for the increased NPLs, maintain its coverage ratio and gradually prepare for the new financial reporting standard or IFRS9 implemented in the future. Thus, the Banks and its subsidiaries’ coverage ratio was 121.71% slightly changed from 121.57% as at December 31, 2016 and also increased from 115.37% as at September 30, 2017. Please be advised accordingly. Sincerely yours, (Signed) Payong Srivanich Payong Srivanich President Accounting Department Tel. 0-2208-4730 ทะเบียนเลขที 0107537000882 35 ถนนสุขมุ วิท กรุงเทพฯ 10110 ตู้ ปณ.44 ศป. กท.10000 โทร. 0-2111-1111 www.ktb.co.th Registration No. 0107537000882 35 Sukhumvit Rd., Bangkok 10110 Thailand PO Box 44 BMC.10000 Tel +66 (0) 2111-1111 www.ktb.co.th



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(TRANSLATION) 7 KRUNG THAI BANK PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES STATEMENTS OF FINANCIAL POSITION AS AT 31 DECEMBER, 2017 ______________________________ (Thousand Baht) NOTE

CONSOLIDATED

THE BANK'S

FINANCIAL STATEMENTS DECEMBER 31, 2017

FINANCIAL STATEMENTS

DECEMBER 31, 2016

JANUARY 1, 2016

(RESTATED)

(BEGINNING BALANCE)

DECEMBER 31, 2017

DECEMBER 31, 2016

JANUARY 1, 2016

(RESTATED)

(BEGINNING BALANCE)

ASSETS CASH INTERBANK AND MONEY MARKET ITEMS, NET

73,572,868

72,106,416

71,470,113

73,334,740

71,929,866

71,294,408

7.2

549,669,529

431,638,413

397,357,971

549,180,025

431,350,214

397,061,378

58,521,800

21,421,700

13,494,400

58,521,800

21,421,700

13,494,400

7.3

33,833,398

30,063,046

34,039,142

33,842,515

30,084,832

34,088,515

CLAIMS ON SECURITIES DERIVATIVES ASSETS INVESTMENTS, NET

7.4

209,514,532

226,931,461

247,058,553

209,311,888

226,670,035

246,787,948

INVESTMENTS IN SUBSIDIARIES AND ASSOCIATES, NET

7.5

18,725,225

15,591,453

14,910,552

10,697,950

10,687,703

10,687,703

LOANS TO CUSTOMERS AND ACCRUED INTEREST RECEIVABLES, NET

7.6 1,939,927,818

1,907,821,949

2,033,250,476

1,865,483,424

1,837,243,223

1,969,827,420

LOANS TO CUSTOMERS ACCRUED INTEREST RECEIVABLES TOTAL LOANS TO CUSTOMERS AND ACCRUED INTEREST RECEIVABLES

LESS DEFERRED REVENUE

5,211,737

5,270,682

5,900,902

4,691,079

4,774,560

5,462,813

1,945,139,555

1,913,092,631

2,039,151,378

1,870,174,503

1,842,017,783

1,975,290,233

(1,846,301)

(3,733,253)

(5,810,002)

(87,092)

(122,922)

(165,766)

LESS ALLOWANCE FOR DOUBTFUL ACCOUNTS

7.7

(125,363,725)

(110,719,616)

(85,823,934)

(116,726,345)

(102,859,894)

(77,221,061)

LESS REVALUATION ALLOWANCE FOR DEBT RESTRUCTURING

7.8

(17,264)

(61,619)

(132,627)

(17,264)

(61,619)

(132,627)

1,817,912,265

1,798,578,143

1,947,384,815

1,753,343,802

1,738,973,348

1,897,770,779

152,852

45,949

1,567,806

152,852

45,949

1,567,806

TOTAL LOANS TO CUSTOMERS AND ACCRUED INTEREST RECEIVABLES, NET

CUSTOMERS' LIABILITIES UNDER ACCEPTANCES PROPERTIES FOR SALE, NET

7.9

35,509,936

35,743,634

30,008,144

35,486,341

35,668,551

29,909,856

PREMISES AND EQUIPMENT, NET

7.10

26,019,406

27,312,663

26,354,526

24,413,806

25,239,008

21,376,845

OTHER INTANGIBLE ASSETS, NET

7.11

3,906,494

4,210,901

4,571,604

895,359

870,720

897,367

DEFERRED TAX ASSETS

7.12

4,592,766

4,496,456

6,996,109

2,130,345

2,321,669

5,020,583

3,476,209

2,853,937

3,788,212

3,188,162

2,589,233

3,578,869

7.13

18,802,727

18,709,178

16,564,767

17,082,986

16,945,112

15,071,377

2,854,210,007

2,689,703,350

2,815,566,714

2,771,582,571

2,614,797,940

2,748,607,834

ACCRUED INCOME OTHER ASSETS, NET TOTAL ASSETS

LIABILITIES AND EQUITY DEPOSITS

7.14

2,070,874,680

1,972,403,532

2,135,498,511

2,073,594,012

1,975,157,675

2,137,446,488

INTERBANK AND MONEY MARKET ITEMS, NET

7.15

228,691,395

211,171,312

200,897,842

219,066,748

201,716,003

184,356,199

LIABILITIES PAYABLE ON DEMAND

5,291,692

5,082,471

6,121,116

5,291,692

5,082,471

6,121,116

LIABILITIES TO DELIVER SECURITIES

58,521,804

21,421,700

13,494,400

58,521,804

21,421,700

13,494,400

DERIVATIVES LIABILITIES

7.3

30,284,422

31,516,693

37,232,572

30,284,422

31,516,693

37,234,793

DEBT ISSUED AND BORROWINGS

7.16

110,626,429

112,685,859

109,585,463

67,271,429

71,262,859

80,282,975

152,852

45,949

1,567,806

152,852

45,949

1,567,806

BANK'S LIABILITIES UNDER ACCEPTANCES PROVISIONS

7.17

12,625,672

11,152,279

14,424,688

11,524,569

10,163,418

13,634,737

OTHER LIABILITIES

7.18

42,922,118

44,818,915

46,209,922

35,745,892

37,976,431

39,997,788

2,559,991,064

2,410,298,710

2,565,032,320

2,501,453,420

2,354,343,199

2,514,136,302

TOTAL LIABILITIES

NOTES TO THE FINANCIAL STATEMENTS ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.

(TRANSLATION) 8 KRUNG THAI BANK PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES STATEMENTS OF FINANCIAL POSITION (CONTINUED) AS AT 31 DECEMBER, 2017 ______________________________ (Thousand Baht) NOTE

CONSOLIDATED

THE BANK'S

FINANCIAL STATEMENTS DECEMBER 31, 2017

FINANCIAL STATEMENTS

DECEMBER 31, 2016

JANUARY 1, 2016

(RESTATED)

(BEGINNING BALANCE)

DECEMBER 31, 2017

DECEMBER 31, 2016

JANUARY 1, 2016

(RESTATED)

(BEGINNING BALANCE)

LIABILITIES AND EQUITY (CONTINUED) EQUITY SHARE CAPITAL

7.19

AUTHORIZED SHARE CAPITAL 5,500,000 PREFERRED SHARES OF BAHT 5.15 EACH 13,976,061,250 ORDINARY SHARES OF BAHT 5.15 EACH

28,325

28,325

28,325

28,325

28,325

28,325

71,976,715

71,976,715

71,976,715

71,976,715

71,976,715

71,976,715

ISSUED AND PAID-UP SHARE CAPITAL 5,500,000 PREFERRED SHARES OF BAHT 5.15 EACH 13,976,061,250 ORDINARY SHARES OF BAHT 5.15 EACH

28,325

28,325

28,325

28,325

28,325

28,325

71,976,715

71,976,715

71,976,715

71,976,715

71,976,715

71,976,715

20,833,734

20,833,734

20,833,734

20,833,734

20,833,734

20,833,734

21,918,740

17,748,818

10,643,441

15,015,969

13,729,430

6,407,413

PREMIUM ON SHARE CAPITAL PREMIUM ON ORDINARY SHARE OTHER COMPONENTS OF EQUITY RETAINED EARNINGS APPROPRIATED LEGAL RESERVE

7.20

UNAPPROPRIATED TOTAL EQUITY ATTRIBUTABLE TO EQUITY HOLDERS OF THE BANK NON-CONTROLLING INTEREST TOTAL EQUITY TOTAL LIABILITIES AND EQUITY

7,200,504

7,200,504

7,200,504

7,200,504

7,200,504

7,200,504

165,903,237

156,398,935

135,437,101

155,073,904

146,686,033

128,024,841

287,861,255

274,187,031

246,119,820

270,129,151

260,454,741

234,471,532

6,357,688

5,217,609

4,414,574

294,218,943

279,404,640

250,534,394

270,129,151

260,454,741

234,471,532

2,854,210,007

2,689,703,350

2,815,566,714

2,771,582,571

2,614,797,940

2,748,607,834

NOTES TO THE FINANCIAL STATEMENTS ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.

(Signed) Somchai Sujjapongse

(Signed) Payong Srivanich

SOMCHAI SUJJAPONGSE

PAYONG SRIVANICH

CHAIRMAN OF THE BOARD OF DIRECTORS

PRESIDENT

(TRANSLATION) 9 KRUNG THAI BANK PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED DECEMBER 31, 2017 _______________________ NOTE

CONSOLIDATED FINANCIAL STATEMENTS 2017 2016

(Thousand Baht) THE BANK'S FINANCIAL STATEMENTS 2017 2016

(RESTATED)

INTEREST INCOME INTEREST EXPENSES INTEREST INCOME, NET FEES AND SERVICE INCOME FEES AND SERVICE EXPENSES FEES AND SERVICE INCOME, NET GAINS ON TRADINGS AND FOREIGN EXCHANGE TRANSACTIONS, NET GAINS ON INVESTMENTS, NET SHARE OF PROFIT FROM INVESTMENTS FOR USING EQUITY METHOD DIVIDEND INCOME REVENUES FROM LITIGATION COMPENSATION OTHER OPERATING INCOME TOTAL OPERATING INCOME OTHER OPERATING EXPENSES EMPLOYEES' EXPENSES DIRECTORS' REMUNERATION PREMISES AND EQUIPMENT EXPENSES TAXES AND DUTIES OTHERS TOTAL OTHER OPERATING EXPENSES IMPAIRMENT LOSS OF LOANS AND DEBT SECURITIES OPERATING PROFIT BEFORE INCOME TAX EXPENSES INCOME TAX EXPENSES NET PROFIT

7.27 7.28

7.29 7.30 7.31

7.37.1

7.32 7.33

122,507,449 36,729,408 85,778,041 28,638,265 4,617,113 24,021,152 4,316,920 928,659 2,264,089 415,452 1,635,735 3,776,846 123,136,894

129,229,887 42,264,056 86,965,831 25,931,448 3,889,459 22,041,989 6,827,507 694,573 3,103,776 481,744 4,573,025 124,688,445

108,995,574 35,132,892 73,862,682 23,357,785 3,094,940 20,262,845 4,305,798 924,966 3,435,393 1,635,735 908,382 105,335,801

116,257,345 40,784,204 75,473,141 21,260,651 2,482,700 18,777,951 6,802,133 694,573 3,561,154 1,626,956 106,935,908

27,439,450 99,238 8,560,565 4,364,252 8,932,387 49,395,892 44,833,388 28,907,614 4,797,336 24,110,278

27,946,699 105,924 8,829,528 4,526,003 9,223,322 50,631,476 33,429,379 40,627,590 7,063,097 33,564,493

21,996,338 71,983 4,971,059 3,878,956 11,785,667 42,704,003 37,499,849 25,131,949 3,819,483 21,312,466

22,726,102 78,196 5,101,364 4,072,890 11,714,621 43,693,173 26,996,155 36,246,580 6,278,794 29,967,786

NOTES TO THE FINANCIAL STATEMENTS ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.

(TRANSLATION) 10 KRUNG THAI BANK PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED DECEMBER 31, 2017 _______________________ NOTE

CONSOLIDATED FINANCIAL STATEMENTS 2017 2016

(Thousand Baht) THE BANK'S FINANCIAL STATEMENTS 2017 2016

(RESTATED)

OTHER COMPREHENSIVE INCOME ITEMS THAT WILL BE RECLASSIFIED SUBSEQUENTLY TO PROFIT OR LOSS GAINS ON REMEASURING AVAILABLE-FOR-SALE INVESTMENTS GAINS FROM RECLASSIFICATION OF INVESTMENTS GAINS (LOSSES) ARISING FROM TRANSLATING THE FINANCIAL STATEMENTS OF FOREIGN OPERATIONS

SHARE OF OTHER COMPREHENSIVE INCOME OF ASSOCIATES (EQUITY METHOD) FOR ITEMS THAT WILL BE RECLASSIFIED SUBSEQUENTLY TO PROFIT OR LOSS RELATED INCOME TAX EXPENSES FOR ITEMS THAT WILL BE RECLASSIFIED SUBSEQUENTLY TO PROFIT OR LOSS ITEMS THAT WILL NOT BE RECLASSIFIED SUBSEQUENTLY TO PROFIT OR LOSS CHANGES IN REVALUATION SURPLUS ON ASSETS ACTUARIAL LOSSES ON DEFINED BENEFIT PLANS RELATED INCOME TAX EXPENSES FOR ITEMS THAT WILL NOT BE RECLASSIFIED SUBSEQUENTLY TO PROFIT OR LOSS

OTHER COMPREHENSIVE INCOME, NET TOTAL COMPREHENSIVE INCOME NET PROFIT ATTRIBUTABLE EQUITY HOLDERS OF THE BANK NON-CONTROLLING INTEREST TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE EQUITY HOLDERS OF THE BANK NON-CONTROLLING INTEREST EARNINGS PER SHARE OF PARENT COMPANY BASIC EARNINGS PER SHARE (BAHT)

7.34

574,929 805,442 192,586

6,724,383 (79,909)

574,929 805,442 192,586

6,724,383 (79,909)

2,883,383

(216,640)

-

(276,074)

(1,344,876)

(276,074)

(1,344,876)

(12,928) (1,149,468)

2,528,024 (936,608)

(12,928) (1,124,505)

2,528,024 (849,697)

232,478 3,250,348 27,360,626

(318,284) 6,356,090 39,920,583

227,486 386,936 21,699,402

(335,665) 6,642,260 36,610,046

22,440,009 1,670,269

32,303,655 1,260,838

21,312,466

29,967,786

25,699,216 1,661,410

38,694,048 1,226,535

21,699,402

36,610,046

1.61

2.31

-

UNAUDITED UNAUDITED UNAUDITED

1.52 UNAUDITED 2.14 UNAUDITED UNAUDITED UNAUDITED UNAUDITED UNAUDITED

NOTES TO THE FINANCIAL STATEMENTS ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.

(Signed) Somchai Sujjapongse SOMCHAI SUJJAPONGSE CHAIRMAN OF THE BOARD OF DIRECTORS

(Signed) Payong Srivanich PAYONG SRIVANICH PRESIDENT

7.21

-

72,005,040

-

-

72,005,040

-

20,833,734

-

-

20,833,734

-

20,833,734

20,833,734

-

-

20,833,734

NOTES TO THE FINANCIAL STATEMENTS ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.

ENDING BALANCE AS AT DECEMBER 31, 2017

TOTAL COMPREHENSIVE INCOME

DIVIDEND PAID

BALANCE AFTER ADJUSTMENT AS AT JANUARY 1, 2017

EFFECTS OF RETROSPECTIVE RESTATEMENT

72,005,040

BALANCE BEFORE ADJUSTMENT AS AT JANUARY 1, 2017

-

-

72,005,040

-

72,005,040

6.1

7.21

6.1

CAPITAL

20,833,734

CAPITAL

SHARE

72,005,040

ON SHARE

PAID-UP

PREMIUM

ISSUED AND

ENDING BALANCE AS AT DECEMBER 31, 2016

TOTAL COMPREHENSIVE INCOME

DIVIDEND PAID

BALANCE AFTER ADJUSTMENT AS AT JANUARY 1, 2016

EFFECTS OF RETROSPECTIVE RESTATEMENT

BALANCE BEFORE ADJUSTMENT AS AT JANUARY 1, 2016

NOTE

8,356,992

(10,343)

-

8,367,335

-

8,367,335

8,367,335

2,022,419

-

6,344,916

-

6,090,218

459,943

-

5,630,275

-

5,630,275

5,630,275

5,379,507

-

250,768

-

250,768

ON INVESTMENTS

ON ASSETS

6,344,916

(DEFICIT)

SURPLUS

REVALUATION

(DEFICIT)

SURPLUS

APPRAISAL

-

-

-

-

-

-

-

-

-

-

644,353

644,353

OF INVESTMENTS

RECLASSIFICATION

GAINS (LOSS) FROM

107,479

192,586

-

(85,107)

-

(85,107)

(85,107)

(79,909)

-

(5,198)

-

(5,198)

STATEMENTS

THE FINANCIAL

TRANSLATING

GAIN (LOSS) FROM

OTHER COMPONENTS OF EQUITY

ATTRIBUTABLE TO EQUITY HOLDERS OF THE BANK

CONSOLIDATED FINANCIAL STATEMENTS

____________________________________

FOR THE YEAR ENDED DECEMBER 31, 2017

STATEMENTS OF CHANGES IN EQUITY

KRUNG THAI BANK PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES

(TRANSLATION) 11

SHARE OF OTHER

6,719,698

2,883,383

-

3,836,315

-

3,836,315

3,836,315

(216,640)

-

4,052,955

-

4,052,955

ASSOCIATES

INCOME OF

COMPREHENSIVE

173,103,741

21,529,294

(12,024,992)

163,599,439

257,697

163,341,742

163,599,439

31,588,671

(10,626,837)

142,637,605

237,068

142,400,537

EARNINGS

RETAINED

287,861,255

25,699,216

(12,024,992)

274,187,031

257,697

273,929,334

274,187,031

38,694,048

(10,626,837)

246,119,820

237,068

245,882,752

THE BANK

HOLDERS OF

TO EQUITY

ATTRIBUTABLE

TOTAL EQUITY

6,357,688

1,661,410

(521,331)

5,217,609

-

5,217,609

5,217,609

1,226,535

(423,500)

4,414,574

-

4,414,574

INTEREST

CONTROLLING

NON-

294,218,943

27,360,626

(12,546,323)

279,404,640

257,697

279,146,943

279,404,640

39,920,583

(11,050,337)

250,534,394

237,068

250,297,326

TOTAL

(Thousand Baht)

72,005,040

-

-

20,833,734

-

20,833,734

20,833,734

PAYONG SRIVANICH PRESIDENT

CHAIRMAN OF THE BOARD OF DIRECTORS

644,353 644,353

-

-

-

-

SOMCHAI SUJJAPONGSE

459,943 5,907,145

-

5,447,202

5,379,507 5,447,202

-

-

OF INVESTMENTS

RECLASSIFICATION

GAINS (LOSS) FROM

(Signed) Payong Srivanich

(10,343) 8,356,992

-

8,367,335

2,022,419 8,367,335

-

67,695

ON INVESTMENTS

ON ASSETS

6,344,916

(DEFICIT)

SURPLUS

REVALUATION

(DEFICIT)

SURPLUS

APPRAISAL

OTHER COMPONENTS OF EQUITY

THE BANK'S FINANCIAL STATEMENTS

(Signed) Somchai Sujjapongse

NOTES TO THE FINANCIAL STATEMENTS ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.

TOTAL COMPREHENSIVE INCOME ENDING BALANCE AS AT DECEMBER 31, 2017

DIVIDEND PAID

72,005,040

-

BEGINNING BALANCE AS AT JANUARY 1, 2017 7.21

CAPITAL

CAPITAL

72,005,040

7.21

SHARE

SHARE

20,833,734

ON

PAID-UP

72,005,040

PREMIUM

ISSUED AND

TOTAL COMPREHENSIVE INCOME ENDING BALANCE AS AT DECEMBER 31, 2016

DIVIDEND PAID

BEGINNING BALANCE AS AT JANUARY 1, 2016

NOTE

_______________________________

FOR THE YEAR ENDED DECEMBER 31, 2017

STATEMENTS OF CHANGES IN EQUITY

KRUNG THAI BANK PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES

(TRANSLATION) 12

192,586 107,479

-

(85,107)

(79,909) (85,107)

-

(5,198)

STATEMENTS

THE FINANCIAL

TRANSLATING

GAIN (LOSS) FROM

20,412,863 162,274,408

(12,024,992)

153,886,537

29,288,029 153,886,537

(10,626,837)

135,225,345

EARNINGS

RETAINED

21,699,402 270,129,151

(12,024,992)

260,454,741

36,610,046 260,454,741

(10,626,837)

234,471,532

TOTAL

(Thousand Baht)

(TRANSLATION) 13 KRUNG THAI BANK PUBLIC COMPANY LIMITED AND SUBSIDIARIES STATEMENTS OF CASH FLOWS FOR THE YEAR ENDED DECEMBER 31, 2017 __________________________________________ CONSOLIDATED FINANCIAL STATEMENTS 2017 2016 (RESTATED) CASH FLOWS FROM OPERATING ACTIVITIES OPERATING PROFIT BEFORE INCOME TAX EXPENSES ADJUSTMENTS TO RECONCILE OPERATING PROFIT BEFORE INCOME TAX EXPENSES TO NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES DEPRECIATION AND AMORTIZATION EXPENSES BAD DEBTS, DOUBTFUL ACCOUNTS AND LOSS ON IMPAIRMENT SHARE OF PROFIT FROM INVESTMENTS FOR USING EQUITY METHOD (GAIN) LOSS ON DISPOSAL OF ASSETS GAIN ON LIQUIDATION OF INVESTMENTS IN SUBSIDIARY COMPANY GAIN ON DISPOSAL OF INVESTMENTS (GAIN) LOSS ON REVALUATION OF INVESTMENTS LOSS (REVERSAL) ON IMPAIRMENT OF PROPERTIES FOR SALE REVERSAL ON IMPAIRMENT OF INVESTMENTS REVERSAL ON IMPAIRMENT OF PREMISES AND EQUIPMENT LOSS ON IMPAIRMENT OF OTHER ASSETS AMORTIZATION OF DISCOUNT ON INVESTMENTS LOSS (GAIN) ON FOREIGN CURRENCY TRANSLATION INCREASE (DECREASE) IN PROVISIONS INCREASE IN OTHER ACCRUED INCOME INCREASE (DECREASE) IN OTHER ACCRUED EXPENSES INTEREST INCOME, NET DIVIDEND INCOME PROCEEDS FROM INTEREST INCOME CASH PAID ON INTEREST EXPENSES PROCEEDS FROM DIVIDEND INCOME CASH PAID ON INCOME TAX EXPENSES OPERATING INCOME BEFORE CHANGES IN OPERATING ASSETS AND LIABILITIES (INCREASE) DECREASE IN OPERATING ASSETS INTERBANK AND MONEY MARKET ITEMS CLAIMS ON SECURITIES INVESTMENTS IN TRADING SECURITIES LOANS TO CUSTOMERS PROPERTIES FOR SALE OTHER ASSETS INCREASE (DECREASE) IN OPERATING LIABILITIES DEPOSITS INTERBANK AND MONEY MARKET ITEMS LIABILITIES PAYABLE ON DEMAND LIABILITIES TO DELIVER SECURITIES DEBT ISSUED AND SHORT-TERM BORROWINGS OTHER LIABILITIES NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES NOTES TO THE FINANCIAL STATEMENTS ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.

(Thousand Baht) THE BANK'S FINANCIAL STATEMENTS 2017 2016 (RESTATED)

28,907,614

40,627,590

25,131,949

36,246,580

2,954,393 44,833,388 (2,264,089) (4,511) (663,756) (85,736) (1,825) (12,651) 95,175 (167,230) (43,408) 241,919 (780,652) (2,508,938) 70,499,693 (85,778,041) (415,452) 122,784,458 (37,203,217) 415,452 (5,192,682)

3,339,561 33,429,379 (3,103,776) 147,358 (670,322) 26,096 827,466 (24,253) (703,493) 49,101 (211,595) 1,658,724 (4,061,338) (82,995) 1,241,056 72,488,559 (86,965,831) (481,744) 130,943,952 (43,825,712) 481,744 (5,029,927)

1,405,051 37,499,849 (1,978) (252,253) (663,756) (85,736) (12,900) (8,957) 95,175 (164,531) (41,859) 83,822 (757,308) (2,575,328) 59,651,240 (73,862,682) (3,435,393) 109,297,119 (35,622,640) 415,452 (3,963,815)

1,459,325 26,996,155 (475) (670,322) 26,096 846,167 (24,251) (703,493) 49,101 (208,338) 1,658,786 (4,294,489) (27,634) 1,019,077 62,372,285 (75,473,141) (3,561,154) 118,029,444 (42,352,644) 481,744 (3,933,799)

65,110,211

67,611,041

52,479,281

55,562,735

(118,090,802) (37,100,100) 8,704,406 (72,349,087) 4,694,565 (887,001)

(34,347,017) (7,927,300) 8,599,092 101,586,374 5,616,984 3,546,249

(117,889,497) (37,100,100) 8,720,927 (60,076,417) 4,647,574 (919,875)

(34,355,411) (7,927,300) 8,579,558 117,952,325 5,575,077 3,844,837

98,471,149 17,520,083 209,221 37,100,104 (278,694) 3,104,055

(163,094,979) 10,273,470 (1,038,645) 7,927,300 (60,154) (8,625,051) (9,932,636)

98,436,338 17,350,745 209,221 37,100,104 (377,808) 2,580,493

(162,288,814) 17,359,805 (1,038,645) 7,927,300 (1,174) (8,941,551) 2,248,742

(TRANSLATION) 14 KRUNG THAI BANK PUBLIC COMPANY LIMITED AND SUBSIDIARIES STATEMENTS OF CASH FLOWS (CONTINUED) FOR THE YEAR ENDED DECEMBER 31, 2017 __________________________________________

CASH FLOWS FROM INVESTING ACTIVITIES PURCHASES OF AVAILABLE FOR SALE SECURITIES PROCEEDS FROM DISPOSAL OF AVAILABLE FOR SALE SECURITIES PURCHASES OF HELD TO MATURITY DEBT SECURITIES PROCEEDS FROM DISPOSAL OF HELD TO MATURITY DEBT SECURITIES PURCHASES OF GENERAL INVESTMENTS PROCEEDS FROM DISPOSAL OF GENERAL INVESTMENTS PURCHASES OF INVESTMENTS IN ASSOCIATED COMPANIES PROCEEDS FROM LIQUIDATION OF INVESTMENTS IN SUBSIDIARY COMPANY PROCEEDS FROM DIVIDEND INCOME FROM SUBSIDIARIES AND ASSOCIATES PURCHASES OF INTANGIBLE ASSETS PURCHASES OF PREMISES AND EQUIPMENT PROCEEDS FROM DISPOSAL OF PREMISES AND EQUIPMENT NET CASH PROVIDED BY INVESTING ACTIVITIES CASH FLOWS FROM FINANCING ACTIVITIES PROCEEDS FROM DEBT ISSUED AND LONG-TERM BORROWINGS REPAYMENTS OF DEBT ISSUED AND LONG-TERM BORROWINGS DIVIDEND PAID-ORDINARY SHARE DIVIDEND PAID-PREFERRED SHARE DIVIDEND PAID TO NON-CONTROLLING INTEREST NET CASH USED IN FINANCING ACTIVITIES GAIN (LOSS) ON ARISING FROM TRANSLATING THE FINANCIAL STATEMENTS OF FOREIGN OPERATIONS

NET INCREASE IN CASH AND CASH EQUIVALENTS BEGINNING BALANCE OF CASH AND CASH EQUIVALENTS ENDING BALANCE OF CASH AND CASH EQUIVALENTS

CONSOLIDATED FINANCIAL STATEMENTS 2017 2016 (RESTATED)

(Thousand Baht) THE BANK'S FINANCIAL STATEMENTS 2017 2016 (RESTATED)

(143,931,576) 133,965,418 (1,194,485) 19,369,774 (358,369) 536,991 (14,942) 2,028,641 (512,027) (895,010) 78,039 9,072,454

(114,193,503) 107,902,226 (6,711,625) 28,409,987 (348,458) 288,485 2,206,235 (471,217) (1,514,570) 1,989,913 17,557,473

(143,931,576) 133,965,418 (316,487) 18,413,774 (358,369) 536,991 (14,942) 253,253 3,019,941 (171,753) (453,364) 2,221 10,945,107

(114,193,503) 107,902,226 (5,890,528) 27,595,987 (348,458) 288,485 3,079,410 (108,779) (1,173,753) 663 17,151,750

31,500,000 (29,856,320) (12,019,412) (5,580) (521,331) (10,902,643) 192,586 1,466,452 72,106,416 73,572,868

19,850,000 (15,708,288) (10,621,807) (5,030) (423,500) (6,908,625) (79,909) 636,303 71,470,113 72,106,416

20,000,000 (20,288,320) (12,019,412) (5,580) (12,313,312) 192,586 1,404,874 71,929,866 73,334,740

(8,058,288) (10,621,807) (5,030) (18,685,125) (79,909) 635,458 71,294,408 71,929,866

NOTES TO THE FINANCIAL STATEMENTS ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.

(Signed) Somchai Sujjapongse SOMCHAI SUJJAPONGSE CHAIRMAN OF THE BOARD OF DIRECTORS

(Signed) Payong Srivanich PAYONG SRIVANICH PRESIDENT

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KRUNG THAI BANK PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2017 1. GENERAL INFORMATION Krung Thai Bank Public Company Limited (the Bank) is a public company limited registered in the Kingdom of Thailand with its head office located at 35 Sukhumvit Road, Klongtoey Nua, Wattana, Bangkok. The Bank engages in commercial banking business and conducts its business through a nationwide branch network and in certain major centers of the world. 2. BASIS OF PRESENTATION OF THE FINANCIAL STATEMENTS 2.1 Basis of Preparation of the Consolidated and the Bank's Financial Statements The consolidated and the Bank's financial statements are presented in accordance with the Notification of the Bank of Thailand (BoT) No. SOR NOR SOR.21/2558 dated December 4, 2015, regarding the Preparation and Announcement of Financial Statements of Commercial Bank and a Holding Company that is the Parent Company of a Financial Group , including any other supplementary BoT’s notifications; and with the regulations of the Stock Exchange of Thailand (SET) dated October 2, 2017, regarding the Preparation and Submission of Financial Statements, Financial reports and operating results of Business Operations of Listed Companies, B.E. 2560 (2017). Moreover, these financial statements are prepared in conformity with generally accepted accounting principles, under Accounting Act B.E. 2543 (2000). The Consolidated Financial Statements The consolidated financial statements comprise with the Bank and its subsidiaries financial statements in which the Bank is a controlling interest after eliminating material intercompany transactions and balances. The 7 consolidated subsidiaries are KTB Law Co., Ltd., KTB General Services and Security Co., Ltd., Krung Thai Asset Management Pcl., KTB Computer Services Co., Ltd., KTB Leasing Co., Ltd., KTB Advisory Co., Ltd., and Krungthai Card Pcl. Percentages of shareholdings and investments in the Bank's subsidiaries and associates are shown in Note 7.5. Investments in associates are accounted in the consolidated financial statements using the equity method. The Bank's Financial Statements Investments in subsidiaries and associates are accounted in the Bank’s financial statements using the cost method. The Bank's financial statements for the years ended December 31, 2017 and 2016 included the accounts of domestic and foreign branches, after eliminating the effects of all interbranch transactions. The English Translation of Financial Statements This English translation of financial statements has been prepared from the statutory financial statements that were issued in Thai language. In case of a conflict or a difference in interpretation between the two languages, the Thai language statutory financial statements shall prevail.

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2.2 Thai Accounting Standards (TAS) and Thai Financial Reporting Standards (TFRS) Effective in Current Period The Bank has adopted Thai Accounting Standards (TAS), Thai Financial Reporting Standards (TFRS), TSIC Interpretations and TFRIC Interpretations that announced and revised in accordance with the Federation of Accounting Professions, those are effective for the financial statements of the periods beginning on or after January 1, 2017. The Bank's managements have already considered that they have no significant impacts on the Bank's accounting policies, and the Bank’s and its subsidiaries’ financial statements. 2.3 The New and Revised Thai Accounting Standards (TAS) and Thai Financial Reporting Standards (TFRS) Announced but not yet Effective The Federation of Accounting Professions has announced Thai Accounting Standards (TAS), Thai Financial Reporting Standards (TFRS), TSIC Interpretations and TFRIC Interpretations, those are effective for the financial statements periods beginning on or after January 1, 2018 that are relevant to the Bank as follows: TAS 1 (revised 2017) TAS 7 (revised 2017) TAS 8 (revised 2017) TAS 10 (revised 2017) TAS 12 (revised 2017) TAS 16 (revised 2017) TAS 17 (revised 2017) TAS 18 (revised 2017) TAS 19 (revised 2017) TAS 20 (revised 2017) TAS 21 (revised 2017) TAS 23 (revised 2017) TAS 24 (revised 2017) TAS 26 (revised 2017) TAS 27 (revised 2017) TAS 28 (revised 2017) TAS 29 (revised 2017) TAS 33 (revised 2017) TAS 34 (revised 2017) TAS 36 (revised 2017) TAS 37 (revised 2017) TAS 38 (revised 2017) TAS 40 (revised 2017)

Presentation of Financial Statements Statements of Cash Flows Accounting Policies, Changes in Accounting Estimates and Errors Events after the Reporting Period Income Taxes Property, Plant and Equipment Leases Revenue Employee Benefits Accounting for Government Grants and Disclosure of Government Assistance The Effects of Changes in Foreign Exchange Rates Borrowing Costs Related Party Disclosures Accounting and Reporting by Retirement Benefit Plans Separate Financial Statements Investments in Associates and Joint Ventures Financial Reporting in Hyperinflationary Economies Earnings per Share Interim Financial Reporting Impairment of Assets Provisions, Contingent Liabilities and Contingent Assets Intangible Assets Investment Property

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2.3 The New and Revised Thai Accounting Standards (TAS) and Thai Financial Reporting Standards (TFRS) Announced but not yet Effective (Continued) TFRS 2 (revised 2017) TFRS 3 (revised 2017) TFRS 4 (revised 2017) TFRS 5 (revised 2017) TFRS 8 (revised 2017) TFRS 10 (revised 2017) TFRS 11 (revised 2017) TFRS 12 (revised 2017) TFRS 13 (revised 2017) TSIC 10 (revised 2017) TSIC 15 (revised 2017) TSIC 25 (revised 2017) TSIC 27 (revised 2017) TSIC 31 (revised 2017) TSIC 32 (revised 2017) TFRIC 1 (revised 2017) TFRIC 4 (revised 2017) TFRIC 5 (revised 2017) TFRIC 7 (revised 2017) TFRIC 10 (revised 2017) TFRIC 13 (revised 2017) TFRIC 14 (revised 2017) TFRIC 17 (revised 2017) TFRIC 18 (revised 2017) TFRIC 21 (revised 2017)

Share-based Payment Business Combinations Insurance Contracts Non-current Assets Held for Sale and Discontinued Operations Operating Segments Consolidated Financial Statements Joint Arrangements Disclosure of Interests in Other Entities Fair Value Measurement Government Assistance-No Specific Relation to Operating Activities Operating Leases-Incentives Income Taxes-Changes in the Tax Status of an Entity or its Shareholders Evaluating the Substance of Transactions Involving the Legal Form of a Lease Revenue-Barter Transactions Involving Advertising Services Intangible Assets-Web Site Costs Changes in Existing Decommissioning, Restoration and Similar Liabilities Determining whether an Arrangement contains a Lease Rights to Interests arising from Decommissioning, Restoration and Environmental Rehabilitation Funds Applying the Restatements Approach under TAS 29 (revised 2017) Financial Reporting in Hyperinflationary Economies Interim Financial Reporting and Impairment Customer Loyalty Programmes TAS 19 (revised 2017) – The Limit on a Defined Benefit Asset, Minimum Distributions of Non-cash Assets to Owners Transfers of Assets from Customers Levies

The Bank has been preparing for adopting related TAS, TFRS, TSIC Interpretations and TFRIC Interpretations mentioned above. The Bank’s management has considered that there is no material impact on accounting policies and financial statements of the Bank and subsidiaries.

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3. SIGNIFICANT ACCOUNTING POLICIES 3.1 Recognition of Income 3.1.1 Interest Income Interest income is recognized on an accrual basis, except for interest on loans classified as delinquent over 3 months and interest on loans under troubled debt restructuring contract which would be reversed. In accordance with the BoT's regulations, interest income on delinquent loans over 3 months from the due date already recognized as an income since January 1, 2000 would be reversed and recognized as income when received. 3.1.2 Fees and Service Income Fees and Service Income is recognized when the related services are performed. 3.1.3 Dividend Income Dividend income from investments is recognized when declared. 3.1.4 Lease Income The lease income of the Bank and its subsidiaries is recognized as follows: - Interest income from hire-purchase and financial lease is recognized by using effective interest rate throughout the term of the lease. Interest on defaulted lease over 3 months is ceased to recognize and reversed from the due date, and interest income will be recognized on an accrual basis when received all overdue payments. - Income from operating lease contract is recognized on a straight-line basis over the term of lease. 3.2 Recognition of Expenses Interest expenses, fees and service expenses, and other operating expenses, are recognized on an accrual basis. 3.3 Cash and Cash Equivalents Cash and cash equivalents represent cash in hand and cash on collection. 3.4 Derivatives Accounting for derivative transactions depends on their purposes as follows: 1) Trading Derivatives The Bank measures derivatives at fair value and recognizes gains or losses arising from changes in fair value in gains (losses) on tradings and foreign exchange transactions, net in the statements of profit or loss and other comprehensive income along with assets or liabilities in the statements of financial position. 2) Hedging Derivatives The Bank measures derivatives with the same manner of the hedged items.

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3.5 Embedded Derivatives The Bank records accounting for embedded derivatives namely Credit Derivative and Structured Note in line with the IAS 39 Financial Instruments: Recognition and Measurement as follows: 1) For not closely related embedded derivatives, those could be separated from their host contracts; if the Bank is able to measure them separately; their gains (losses) will be recognized at fair value through gains (losses) on tradings and foreign exchange transactions, net in the statements of profit or loss and other comprehensive income. For the host contracts, the Bank will apply to related accounting standards. Conversely, the Bank is unable to measure the embedded derivatives separately, the Bank will revalue the entire combined contract and designate as trading booked at fair value through profit or loss, which also be recognized the gains or losses arising from changes in fair value in the statements of profit or loss and other comprehensive income. 2) For closely related embedded derivatives, the Bank will not separate them from their host contracts and will recognize the entire combined contract in accordance with related accounting standards. 3.6 Investments 3.6.1 Basis of Classification of Investments The Bank and its subsidiaries classify their investments in debt securities and equity securities as trading securities, available-for-sale securities, held-to-maturity debt securities, or investments in subsidiaries and associates. Non-marketable equity securities are classified as general investments. 3.6.2 Basis of Valuation of Investments Investments in marketable debt or equity securities classified as trading securities are stated at fair value. Unrealized gains or losses arising from the revaluation are recorded through gains (losses) on tradings and foreign exchange transactions, net in the statements of profit or loss and other comprehensive income. Investments in marketable debt or equity securities classified as available-for-sale securities are stated at fair value, net of allowance for impairment (if any). Unrealized gains or losses arising from the revaluation are separately shown in other components of equity and realized gains or losses after the disposal. Investments in debt securities classified as held-to-maturity are stated at the amortized cost, net of allowance for impairment (if any). Premiums or discounts on held-to-maturity debt securities are adjusted to interest income at the end of each month by using the straight-line method which is immaterially different from using the effective interest rate method. General investments are stated at cost, net of allowance for impairment (if any). Losses on impairment are realized through gains (losses) on investments, net in the statements of profit or loss and other comprehensive income. Investments in marketable unit trust classified as trading and available-for-sale securities are stated at fair value whereas investments in non-marketable unit trust are stated at net asset value. Investments in foreign asset-backed debt securities classified as trading securities-current investments are stated at fair value.

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3.6 Investments (Continued) 3.6.2 Basis of Valuation of Investments (Continued) Investments in subsidiaries and associates, shown in the Bank's financial statements, are accounted for by the cost method, net of allowance for impairment (if any). Moreover, investments in associates, shown in the consolidated financial statements, are accounted for by the equity method (the Bank uses financial information from unaudited/unreviewed financial statements of the associates). The cost of disposed investments is calculated by the weighted-average method. Gains or losses on disposal of investments are presented in gains (losses) on investments, net in the statements of profit or loss and other comprehensive income, except for trading securities are presented in gains on tradings and foreign exchange transactions, net. 3.7 Loans Loans represent the outstanding principal amounts, except for overdrafts including accrued interest receivables. Deferred revenue is presented as deduction from the loans. Hire-purchase and financial lease receivables represent the outstanding amounts, less deferred interest receivables, and deferred commission, plus amortized direct expenses. 3.8 Allowance for Doubtful Accounts The Bank and its subsidiaries which operate the loan provider business recognize allowance for doubtful accounts compliance with the BoT's Notification No. SOR NOR SOR.5/2559 dated June 10, 2016, regarding Regulations on Assets Classification and Provision of Financial Institutions based on the BoT's Regulations on Valuation and Appraisal of Collateral and Immovable Properties for Sale acquired through Debt Repayment, Loan Collateral or Public Auction of Financial Institution dated June 10, 2016 summarized as follows: 1) The Bank has set aside provision for normal and special mention categories at 1 percent and 2 percent, respectively, in accordance with the BoT’s regulations. The Bank also applies collective approach to set aside provision for each debtor group, grouping by similar credit risk. 2) Provision for impaired-debtors is at 100 percent of the difference between the book value of loans and the present value of expected cash flows from the disposals of collateral as to the practice stipulated by the BoT. 3) Collateral using for calculating the present value of expected cash flows from disposals are such as immovable properties and leasehold rights (e.g. the present value of the expected cash flows from disposals of immovable properties which are collateral of debtors under the litigation process equal to 62.03 percent of the appraisal value and the present value of the expected cash flows from disposals of immovable properties which are collateral of debtors under the public auction process equal to 66.38 percent of the appraisal value). Other types of collateral are calculated by using the valuation rate stipulated by the BoT. 4) Collateral valuation has been conducted according to the BoT's regulations relating to types of collateral, valuation methodology, valuation frequency, and values of collateral that could be deductible from loans balances before provisioning as follows: - As for normal and special mention categories, the underlying collateral is required to reappraise or revalue on a 3-years basis excluding collateral of credit lines of housing loans and other loans in the charge of retail business and network support team, will be reappraised or revalued when changed to sub-standard, doubtful and doubtful of loss, as well as the collateral which have been reappraised or revalued over the past 3 years.

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3.8 Allowance for Doubtful Accounts (Continued) - As for sub-standard, doubtful and doubtful of loss categories are required to reappraise or revalue collaterals by using the methods stipulated by the BoT. Immovable properties collaterals are required to reappraise or revalue on a 3-years basis as minimum. In case of near cash collateral such as marketable securities, is required to reappraise or revalue at the end of the accounting period. Bad debts written-off and bad debts recovered are either deducted from or added to the allowance for doubtful accounts, whichever the case may be. The Bank defines debt write off guidelines which any debtors classified as doubtful of loss are written off at the underlying value of irrecoverable provision in line with the BoT's debt write off regulations. 3.9 Troubled Debt Restructuring and Losses on Troubled Debt Restructuring (TDR) The Bank’s debt restructuring methodology includes the reduction of principal and/or accrued interest receivables already recorded as revenue, interest rate reduction, debt-equity conversion or debt-convertible securities conversion, repayment period extension, debt type modification, grace period permission for principal and/or interest, collateral assets transfers, noncollateral assets transfers, and assets transfers with buy back contracts. Losses arising from debt restructuring are determined as follows: 1) In case of relaxation of the debt repayment conditions without reducing of principal and accrued interest receivables prior to troubled debt, the present value of expected cash flow received is discounted by using the interest rate under the conditions specified in the TDR contract. Where such interest rate is lower than financial cost rate, the financial cost rate will be used instead. If the present value computed is lower than the book value (the principal amount plus accrued interest receivables included in the outstanding balance of restructured debt), an allowance for losses on troubled debt restructuring will be fully recognized in the statements of profit or loss and other comprehensive income for the relevant period. The component of financial costs features the weighted average cost of deposits and borrowings, contributions to the BoT and the Deposit Protection Agency (DPA), and expenses incurred to maintain liquidity. 2) In case of debt repayment through the transfer of assets, financial instruments or debtors’ equity from debt-equity conversion, the Bank has entirely written off. Losses on debt restructuring are charged to the statements of profit or loss and other comprehensive income instantly upon the transfer of assets considering together with the original allowance for doubtful accounts. Thus, the value of transferred assets shall be recorded not higher than the book value of the debt plus accrued interest receivables entitled by the Bank. In case of partial debt repayment through the transfer of assets, financial instruments or debtors’ equity from debt-equity conversion, the Bank's will follow no. 2) in the first place. For the remaining amount of debt, if there is the relaxation of the repayment condition, the Bank will follow no. 1). 3.10 Properties for Sale Properties for sale are immovable and movable properties which are stated at lower of cost or market value less allowance for impairment (if any). Losses on impairment or reversal of losses on impairment are recognized as other operating expenses or income in the statements of profit or loss and other comprehensive income. Gains or losses on disposals of those properties after deducting selling expenses are recognized as other operating income or expenses in the statements of profit or loss and other comprehensive income.

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3.10 Properties for Sale (Continued) The Bank has followed the BoT's Notification No. SOR NOR SOR.20/2558 dated December 4, 2015, regarding Regulations on Accounting of Financial Institutions Section 1, Accounting for the Sales of Foreclosed Assets, SOR NOR SOR.5/2559 dated June 10, 2016, regarding Regulations on Assets Classification and Provision of Financial Institutions, SOR NOR SOR.22/2552 dated December 11, 2009, regarding Immovable Properties for Sale, and SOR NOR SOR.23/2552 dated December 11, 2009, regarding the Rules of the Purchase and Holding of Immovable Properties Used as Premises for the Business or as Facilities for its Officers and Employees of Financial Institutions. According to the BoT's Policy No. THOR POR THOR. PHOR NOR SOR. (23) WOR.745/2559 dated June 10, 2016, regarding Delivery Policy of Appraisal Guarantee and Properties for Sale acquired through Debt Repayment, Loan Collateral or Public Auction of Financial Institutions, the properties for sale in the amount exceeding Baht 50 million are appraised by the external appraisers, and the amount of not exceeding Baht 50 million are considered to appraise by internal or external appraisers depending on the Bank. 3.11 Land, Premises, Equipment, and Depreciation Land is presented at revalued amount. Premises and equipment are stated at cost less accumulated depreciation and allowance for impairment (if any). Land is revalued on a 3-5 years basis by independent appraisers in accordance with the BoT’s regulations. In case that revaluation result decreased or decreased more than surplus on land revaluation which had been recognized in other components of equity, the Bank will recognize deficit in the statements of profit or loss and other comprehensive income. In case that revaluation result increased, the Bank will recognize surplus through appraisal surplus on assets in other components of equity. Except for the case that the Bank revalued decreased on land and already recognized loss in the statements of profit or loss and other comprehensive income, the Bank will recognize only surplus amounts that excess of the deficit amounts used to recognized of such land. Depreciation of premises is calculated on the straight-line basis over their useful lives. Since April 1, 2012, depreciation of premises is calculated on the straight-line basis over their residual useful lives not over 50 years which appraised by independent expert appraisers. Before April 1, 2012, depreciation of premises is calculated on the straight-line basis over their useful lives of 20 years. Depreciation of equipment is calculated on the straight-line basis over their useful lives of 5 years. Equipment with an acquisition cost not exceeding Baht 3,000 is charged directly to expense in the period of acquisition. The amounts of those transactions have no significant effect to the Bank's financial statements. Depreciation method, useful lives, and residual value are annually reviewed. Depreciation of premises and equipment in foreign countries is at the legal rates applicable in each locality. 3.12 Intangible Assets Intangible assets, comprising software, licenses, and computer system development costs, are presented at cost net accumulated amortization and allowance for impairment (if any). Amortization is calculated by the straight-line basis over their useful lives and recognized as expense in the statements of profit or loss and other comprehensive income. Amortization of intangible assets in foreign countries is at the legal rates applicable in each locality.

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3.13 Deferred Tax Assets or Liabilities Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding taxes basis used in the computation of taxable profit (tax base). The Bank recognized deferred tax assets arising from such temporary differences to the extent that it is probable that taxable profit will be available against those temporary differences could be utilized. The carrying amounts of deferred tax assets are reviewed at each reporting date and shall be reduced to the extent that the tax benefit will be realized. The Bank and its subsidiaries recognize deferred tax in the statements of profit or loss and other comprehensive income, except for the extent that relates to items recognized in equity, shall be recognized directly in equity. The Bank and its subsidiaries calculate amounts of deferred tax assets and liabilities by using tax rates enacted or substantively enacted at the reporting date. Deferred tax assets and deferred tax liabilities are offset, if the Bank has a legally enforceable right to offset current tax assets and current tax liabilities, and they relate to income taxes levied by the same tax authority on the same taxable entity. 3.14 Leaseholds Leaseholds, which are included in other assets, are stated at cost less accumulated amortization. Amortization charge is calculated by the straight-line basis over the lease period between 3 – 30 years and recognized as expense in the statements of profit or loss and other comprehensive income. 3.15 Impairment of Assets For outstanding balances of assets as at the end of period, the Bank and its subsidiaries review the impairment of assets by items when there is an indication that the book value of those assets is higher than the expected recoverable amounts. As such, losses on impairment will be realized as other operating expenses. The reversal of losses on impair ment will be recorded only when there is an indication that such impairment no longer exists or shown at a declining balance, if any, and reversed to other operating income in the statements of profit or loss and other comprehensive income. Except for the case that reversal of the revalued increased of the same assets that used to be recognized in equity, when impairment occurred latterly it will be recognized in equity. 3.16 Foreign Currency Translation 3.16.1 Presentation Currency The consolidated and the Bank’s financial statements are presented in Baht. 3.16.2 Foreign Currency Translation Items denominated in foreign currencies are translated into the functional currency at the exchange rates prevailing at the transaction dates. Balances of monetary assets and liabilities are translated by using the reference exchange rates of BoT as at the reporting date. Balances of non-monetary assets and liabilities are translated by using the exchange rates prevailing at the transaction dates or exchange rates at the date when the fair value was measured. Gains or losses on foreign currency exchange and foreign currency translation are presented in the statements of profit or loss and other comprehensive income as gains (losses) on trading and foreign exchange transactions, net.

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3.16 Foreign Currency Translation (Continued) 3.16.3 Foreign Currency Translation of Foreign Branches' Financial Statements Items on the foreign branches' statements of financial position are translated into Baht by using the reference exchange rates of BoT as at the reporting date. The statements of profit or loss and other comprehensive income are translated into Baht by using the exchange rate prevailing at the transaction dates or average exchange rates of that accounting period. Gains or losses on translation of foreign branches' financial statements are presented in equity through other comprehensive income. 3.17 Employees Benefit 3.17.1 Employees Provident Fund The Bank established a Provident Fund under the Provident Fund Act B.E. 2530 (1987) and entered to the registered fund approved by the Ministry of Finance in June 25, 1992. The Provident Fund is managed by an external fund manager. Permanent employees of the Bank are entitled to apply for membership according to the registered KTB Provident Fund regulations. Employees could opt to contribute to the Fund at the rate of either 3, 6, 10, 12 or 15 percent of their basic salaries while the Bank's supplemental contribution is at 10 percent of each employees' basic salary. 3.17.2 Defined Benefit Plan The Bank and its subsidiaries have defined benefit plan to pay their employees under the employment agreements. The estimate of employee benefits obligations are calculated by using the actuarial techniques called the Projected Unit Credit Method. This method uses statistical data as a factor to estimate the present value of expected future payments and discounts by using market yields on high quality corporate bonds with the approximate maturity of those obligations. The estimate amount is shown in a part of the provisions. The actuarial gains (losses) are recognized in other comprehensive income and transferred immediately to the retained earnings. 3.18 Income Taxes Income taxes comprise of current tax and deferred tax. Current tax is the amount expected to be paid to the tax authorities by calculating from taxable profit for the period under Revenue Code. 3.19 Earnings per Share Basic earnings per share are calculated by dividing the net profit attributable to ordinary equity holders of the Bank by the weighted average number of ordinary shares outstanding.

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3.20 Provisions The BoT's Notification No. SOR NOR SOR.5/2559 dated June 10, 2016, regarding Regulations on Assets Classification and Provision of Financial Institutions prescribed regulations to set aside provisions for off-the statements of financial position obligations in conformity with TAS 37 (revised 2016): Provisions, Contingent Liabilities and Contingent Assets. The Bank is required to set aside provisions for off-the statements of financial position obligations when satisfied all of the following criteria: 1) Off-the statements of financial position obligations classified as substandard, doubtful, doubtful of loss, and loss. 2) Off-the statements of financial position obligations which the Bank should recognize provisions according to TAS 37 (revised 2016), paragraph 14 when satisfied all of the following criteria: 2.1 A present obligation (a legal or a constructive obligation) resulting from past events. 2.2 It is possibly certain that there will be a future outflow of resources embodying economic benefit to settle such obligation and 2.3 An estimate of obligation can be reliably made. 3) Off-the statements of financial position obligations engage in high credit risk such as guarantees on borrowings, aval to bills or irrevocable obligations whereby the Credit Conversion Factor stipulated by the BoT in calculating Capital Fund to be maintained is equal to 1.0. 3.21 Customer Loyalty Programme The Bank‘s subsidiaries have customer loyalty programme by offering reward points to customer together with services entitling customers to redeem those reward points to gifts or discount in the future. The Bank’s subsidiaries also allocate rewards or accrued rewards to the points by referring from fair value of accumulated points. Then, they are recognized to deferred revenue under “other liabilities” in the statements of financial position and shall be recognized to fees and service income when customers redeem. 3.22 Fair Value Measurement Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Bank and its subsidiaries have considered fair value of individual financial instrument. Fair value of financial instruments are quoted price (unadjusted) for similar assets or liabilities in active markets that the Bank and its subsidiaries are able to access. In case of there is no quoted price in active markets, the Bank and its subsidiaries will use general accepted valuation technique by maximizing observable inputs and minimizing unobservable inputs in commonly used models or the Bank’s models. Those models are approved by the management and also regularly reviewed and updated.

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4. RISK MANAGEMENT 4.1 The Bank's Risk Information Credit Risk Credit risk is the risk that a counterparty or borrower fails to comply with conditions and covenants as stated in the mutual agreement or the deterioration of assets' quality resulting in non-repayment debts as set out in the loan contract and an adverse effect over the Bank's income and capital funds. The assets on the statements of financial position, net of allowance for doubtful accounts, represent the Bank's credit risk exposure. The Bank concerns about the contingent credit risk at all time. The Bank continually evaluate and follow up situations both inside and outside country in order to assess the risk that may impact on solvency of the debtors and the Bank’s loan portfolio. The Bank focuses on a credit expansion to both existing and new customers with high potentiality and appropriate yield. The Bank highly concentrates on customer evaluation, business potential, ability to repay debt, and obvious objective of loan purpose. The Bank develops risk management tool for better evaluation of customer business performance in order to notice credit department and set the loan policy guideline to prevent the debtors become NPLs. Moreover, the Bank has regularly improved credit risk management by reviewing/adjusting credit policies and other policies related to the credit risk management for the purpose of complying with economic situation and the Bank’s business operation as well as being in consonant with risk management guidance prescribed by the BOT. The credit risk management policies and guidelines are reviewed/improved at least once a year in order to match with current situation. The Bank also concentrates on economic and business research that related to the Bank’s loan portfolio in order to monitor loan portfolio efficiently and effectively, such as Industry Direction in managing Stress Testing and Industry Indicators as a tool for better loan portfolio management. The Bank manages credit risk management of the companies in financial business group of the Bank under the BoT’s regulations. The credit risk management policies and guidelines of those companies are also reviewed/ improved annually and/or when significantly changed event occurs and affects credit risk management. The Bank monitors and reports risk management results with the intention to control credit risk to be in compliance with the Bank's risk management plan, the BoT's supervision policy and other regulators' rules. The risk management results reports are normally submitted to the Risk Management Committee and the Audit Committee at least once a month and to the Board of Directors at least quarterly. To follow up and manage the quality of credit, the Bank closely monitors the customers whose credits are approved in order to ensure that they are in comply with the terms and conditions of loan agreements by carrying out NPLs reduction project. The watch list debtors with weak performance will be monitored and controlled to prevent such loans becomes NPLs. However, in case those debtors become NPLs, the measure for debt restructuring shall be set up together with legal process. With this regards, the NPLs reduction project shall help stipulating the implementation plan to become clearer and more effective for the NPLs problem solving. Thus, the regular progress shall be reported regularly in order to expedite debt repayment with minimum loss. In assessing the adequacy of provision as prescribed by the BoT, the Bank is required to examine the accuracy and completeness of loan classification, debt-restructuring and collateral data as type and value of collateral. Such associated data potentially has significant impacts on the allowance for doubtful accounts of the Bank.

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4.1 The Bank's Risk Information (Continued) According to assets written-off, the Bank has policy to write off any assets classified as doubtful of loss with 100 percent provision; however, the Bank still closely follow up uncollectible amounts or taken legal proceedings to the final action. The credit review is established to ensure the compliance with standard operation procedures in relation to credit approval and debt restructuring. In addition, the qualitative assessment for loan and other related assets are conducted for loan classification as prescribed by the BoT. Market Risk Market risk is the risk that the Bank may affected by changes in value of position on the statements of financial position and off-the statements of financial position which is caused by fluctuation of interest rate, foreign exchange rate, equity securities price and commodity price resulting in negative impact on income and capital. The Bank monitors and controls the market risk in the trading book and banking book portfolio by comparing the existing risks with the approved risk limits/indicators, conducting the approval processes for the breach of the limits/indicators and reporting to the executives and the Risk Management Committee regularly. Interest Rate Risk Interest rate risk is the risk that income or capital is adversely affected by changes in interest rate of the asset, liability and off-the statements of financial position items which are Rate Sensitive Items. These may have negative impact on Net Interest Income, Economic Value, market values of Trading Account, and other income and expenses related to interest rate. The Bank’s significant financial assets and liabilities classified by periods of interest rate repricing are as follows: (Million Baht) December 31, 2017 Call to 1 month

Non-interest 1-3 Months 3-12 Months Over 1 year Bearing

Financial assets Interbank and money market items Investments* Loans to customers Total financial assets

522,794.48 30,848.88 1,357,047.26 1,910,690.62

7,077.87 9,753.61 204,878.81 221,710.29

5,367.09 10,825.23 163,255.01 179,447.33

1.56 133,922.83 40,578.57 174,502.96

17,721.97 19,991.57 1,086.38 38,799.92

Financial liabilities Deposits Interbank and money market items Debt issued and borrowings Total financial liabilities

1,462,873.53 151,649.33 0.70 1,614,523.56

132,820.09 12,041.79 144,861.88

255,548.29 8,359.92 16,335.70 280,243.91

126,012.48 38,600.44 50,935.03 215,547.95

96,339.62 8,415.27 104,754.89

NPLs

Total

98,637.39 98,637.39

552,962.97 205,342.12 1,865,483.42 2,623,788.51

-

2,073,594.01 219,066.75 67,271.43 2,359,932.19

*Included investments in subsidiaries and associates. (excluded trading securities, allowance for revaluation and impairment)

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4.1 The Bank's Risk Information (Continued) (Million Baht) December 31, 2016 Call to 1 month

Non-interest 1-3 Months 3-12 Months Over 1 year

Bearing

NPLs

Total

Financial assets 381,469.53

16,399.42

5,895.40

0.77

29,039.39

-

432,804.51

728.69

12,369.71

28,540.11

154,407.53

19,397.74

-

215,443.78

1,406,749.48

174,714.37

122,088.65

45,912.51

992.25

86,785.96

1,837,243.22

1,788,947.70

203,483.50

156,524.16

200,320.81

49,429.38

86,785.96

2,485,491.51

1,308,356.19

191,314.47

241,422.93

141,076.31

92,987.77

-

1,975,157.67

114,295.70

28,628.75

15,731.38

38,620.07

4,440.10

-

201,716.00

Debt issued and borrowings

0.70

5,155.00

15,133.32

50,973.84

-

71,262.86

Total financial liabilities

1,422,652.59

225,098.22

272,287.63

230,670.22

-

2,248,136.53

Interbank and money market items

Investments* Loans to customers Total financial assets Financial liabilities Deposits Interbank and money market items

97,427.87

*Included investments in subsidiaries and associates. (excluded trading securities, allowance for revaluation and impairment)

Foreign Exchange Rate Risk Foreign exchange rate risk is the risk that foreign exchange rate volatility giving adverse impact on income or capital due to having foreign currency transactions or having assets or liabilities in foreign currency, when converting all items on the Bank's financial statements to local currency, the book values decrease including decline of income or loss incurred from foreign exchange trading. Equity Securities Price Risk Equity securities price risk is the risk that income or capital is negatively affected by changes in equity securities prices. However, the Bank focuses on investing in potential securities which have growth performance and have opportunities to generate bank’s return. Commodity Price Risk This is the risk that income or capital is adversely affected by changes in commodity price. The Bank conducts commodity derivative transactions to accommodate customer hedging of risk. The Bank eliminates those risk exposures by doing back-to-back transactions.

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4.1 The Bank's Risk Information (Continued) The Bank's Market Risk Management Structure and Supervision The Bank has designated the Board of Directors and Risk Management Committee to formulate policy and market risk limit as follows: Board of Directors Board of Directors are responsible for the approval of market risk management policy and the limitation acceptance or threshold of Bank in order to control risk exposure that affects to the market risk and decentralized to relevant committees or responsible departments to supervise as appropriate. Risk Management Committee – RMC RMC is responsible for the determination of risk management policy to the Board of Directors, controlling, monitoring, assessing the result of risk management and supervising that the risk management policy and guidelines set by the Bank and the regulators have been implemented and observed. The Bank has designated the Market Risk Management Department, an independent business unit from front office, to supervision risk in order to create transparency and efficiency. Moreover, it conforms to the BoT's market risk supervision regulations and the Bank's market risk management policy. Besides, the Market Risk Management Department is responsible to follow up and supervise market risk not exceeding the limit specified by the Bank. Then, it reports to top-level executives and RMC. The Bank has set the risk management policy to be in line with the Bank's strategy and the BoT's market risk supervision regulations. For transactions in trading accounts, the Bank set the maximum acceptable risk limit such as investment value/position, maximum loss, including statistic risk measurement namely Value at Risk (VaR) and Sensitivity for the trading book portfolio. The Bank also regularly assesses market value and conducts stress testing for both trading book portfolio and banking book portfolio. Besides, the Bank prepares Product Programme while enhancing applications and tools used in risk assessment and control for higher efficiency capable of accommodate more complex transactions. The Bank regularly monitors the interest rate risk in the Banking book portfolio by simulating the net interest income change and economic value change. The Bank also regularly conduct stress testing and closely monitor whenever there are some changes in the interest rate market movement that affects of the Bank significantly.

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4.1 The Bank's Risk Information (Continued) Market Risk Management Structure and Supervision of the Financial Business Group The Bank has supervision of risk management of the financial business group and prescribes policy of risk management of the financial business group. The policy was approved by the Board of Directors determining the subsidiaries within the financial business group to complete all aspects of risk management in accordance with the Company’s significant risks and risk management policy which defines the organization chart that support the efficiency of risk management, including the determining of clearly authorization. The policy also determines the subsidiaries to complete and efficiently follow the monitoring process and internal control system by identifying, measuring, monitoring and controlling risk under the guideline prescribed in the risk management policy of the financial business group. Moreover, the subsidiaries are required to prepare their market risk management report and relating information for submission to the Bank in order that the Bank can monitor market risk and risk level of companies in the financial business group and assess effect to the Bank’s capital. The Bank’s financial business group has decentralized risk management that means companies within the financial business group manage their own risk and the Bank will consider and comment the companies’ key market risk indicators as appropriate. Liquidity Risk Liquidity risk is the risk that the Bank fails to repay liabilities or contingencies on due date because of inability to liquidate assets into cash or having insufficient funds or acquiring funds at a higher unacceptable cost thus affecting income and capital funds at present and in the future. The Bank's Liquidity Risk Management Structure and Supervision The Bank has designated the Board of Directors, Risk Management Committee, Assets and Liabilities Management Committee to prescribe policy and strategy of liquidity risk management as follows: Board of Directors Board of Directors is responsible for the approval of liquidity risk management policy and liquidity emergency plan and to approve the Bank's acceptable limit or trigger of liquidity risk. Risk Management Committee – RMC RMC is responsible for the determination of risk management policy to the Board of Directors, controlling, monitoring, assessing the result of risk management and supervising that the risk management policy and guidelines set by the Bank and the regulators have been implemented. RMC also submitted the operational report to the Audit Committee for acknowledgement and/or for considering on monthly basis and report to the Board of Directors for acknowledgement and/or for considering on quarterly basis. Assets and Liabilities Management Committee – ALCO ALCO is responsible for the determination of strategy to manage the Bank's assets, liabilities, and capital to be appropriate. ALCO monitors various external factors affecting the Bank's liquidity, specifies strategy to manage liquidity and interest rate risk and submits ALCO report to the Board of Executive Directors for acknowledgement and/or for considering.

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4.1 The Bank's Risk Information (Continued) Liquidity Risk Management Structure and Supervision of the Financial Business Group The Bank has supervision of risk management of the financial business group and prescribes policy of risk management of the financial business group. The policy was approved by the Board of Directors determining the subsidiaries within the financial business group to complete all aspects of risk management in accordance with risk management policy which defines the organization chart that supports the efficiency of risk management, including the determining of clearly authorization. The policy also determines the subsidiaries to complete and efficiently follow the monitoring process and internal control system by identifying, measuring, monitoring and controlling risk under the guideline prescribed in the risk management policy of the financial business group. Moreover, the group is required to prepare liquidity position report and relating information for submission to the Bank in order that the Bank can monitor liquidity position and risk level of companies in the financial business group and assess effect to the Bank's liquidity. The Bank's financial business group has decentralized risk management that means companies within the financial business group manage their own risk and the Bank will consider supporting their liquidity as appropriate. Structure of Sources and Uses of Funds Liquidity risk is the significant risk of commercial banks. The Bank's liquidity risk factors are the structure of sources and uses of funds. The Bank's sources of funds are from short-term deposits mostly less than one year including saving deposits, while uses of funds for lending have maturity date longer than the deposits. Therefore, the Bank's liquidity risk stems from asset to cash turning period not matching with liability's maturity date. Besides, cost of fund that higher than acceptable limit could affect to the Bank's income and capital at present and in the future. Thus, liquidity risk management process of the Bank is liquidity trend analysis by estimating the Bank's liquidity status and Net high-quality liquid assets to net liquidity gap ratio in order to evaluate the sufficiency of liquidity assets that supported short-term capital demand. The Bank also assigns the trigger to control liquidity risk and consistency report risk to the Risk Management Committee, the executive officers, and related parties. Liquidity Risk Management Tools Liquidity risk management tools are presented in several reports related to the Bank's liquidity to top-level executives and relating departments in order to efficiently apply to use of liquidity risk management. - The Bank prepares liquidity risk report to determine liquidity risk on a daily and monthly basis by comparing with the approved risk limit/indicators to manage and control the risk level to the prescribed limit. - Net liquidity position report is prepared on a daily basis in the first 14 calendar days to present daily details by showing estimated cash inflow and outflow information adjusted according to customer behavior, preceding cash flow model together with future trend considerations adhere to realistic and conservative principles. - Liquidity gap report presents estimates of future cash flows determined in accordance with the customer behavior assumptions in normal situation.

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4.1 The Bank's Risk Information (Continued) - Daily financial position report presents the Bank’s liquid assets in terms of balance amount of daily average deposits with the BoT. The BoT’s regulation requires maintaining sum of the average daily deposit balance and the average daily cash balance at the cash inventory management center not less than 1 percent of total customers’ deposit and other specified borrowings. Moreover, the report demonstrates high quality liquid assets in each asset category reserved as an operating liquidity for the Bank’s normal operations. - Liquidity coverage ratio (LCR) Report is reported to the Risk Management Committee and the Assets and Liabilities Management Committee on a monthly basis in accordance with BoT’s regulations. LCR is the liquidity risk measurement standard that aims to ensure that a bank has an adequate stock of unencumbered high quality liquid assets (HQLA) which consists of cash or assets that can be converted into cash at little or no loss of value in private markets to meet its liquidity needs for a 30 calendar day liquidity stress scenario. - Simulation liquidity risk stress testing report is submitted to the Risk Management Committee on a quarterly basis. Liquidity Risk Stress Testing The Bank sets quarterly liquidity risk stress testing in conformity with the Bank's stress testing policy by using the 3 situations which are (1) Institution-specific crisis (2) Market-wide crisis and (3) Combination of both. Each situation is based on assumptions such as withdrawing customers' deposit in different proportion, declining in the market liquidity of assets, decreasing in ability to reach large-sized sources of funds. The Bank also prepares contingency plan to support crisis by considering to stress test result of each model situation. The contingency plan is set warning triggers of liquidity crisis in order that the Bank can reduce negative impact from liquidity problems that may occur with reasonable expenses/costs. Liquidity Assets Ratio As at December 31, 2017, and 2016, the Bank has deposits at the BOT and cash at Cash Center Bank of Baht 19,507.24 million and Baht 29,235.90 million which the Bank has average fortnightly liquid assets not less than 1 percent of deposits and borrowings as prescribed by the BoT. Sources and Uses of Funds Sources and uses of funds As at December 31, 2017, the Bank and its subsidiaries' major sources of funds were deposits accounting for 72.56 percent of total funds. Other significant sources of funds included net interbank and money market items (liabilities) of 8.01 percent, debt issued and borrowings of 3.88 percent, and equity of 10.31 percent. The Bank and its subsidiaries' uses of funds were loans to customers 67.90 percent of total uses of funds. Other significant uses of funds included net interbank and money market items (assets) of 19.26 percent and net investments of 8.00 percent.

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4.1 The Bank's Risk Information (Continued) December 31, 2017 December 31, 2016 Sources of Funds Deposits Interbank and money market items, net Debt issued and borrowings Equity Uses of Funds Loans to customers Interbank and money market items, net Investments, net

72.56% 8.01% 3.88% 10.31%

73.33% 7.85% 4.19% 10.39%

67.90% 19.26% 8.00%

70.79% 16.05% 9.02%

Loans to Deposits Ratio On the consolidated financial statements as at December 31, 2017, the Bank has loans to deposits ratio of 93.59 percent which has decreased from 96.54 percent as at December 31, 2016. Loan to deposits ratio on the Bank’s financial statements as at December 31, 2017 is 89.96 percent which has decreased from 93.01 percent as at December 31, 2016. As a result of loan increased 1.54 percent and the reduction of deposits increased 4.98 percent from the end of the year 2016. December 31, 2017

December 31, 2016

Loans to deposits ratio (Consolidated financial statements)

93.59%

96.54%

Loans to deposits ratio (The Bank’s financial statements)

89.96%

93.01%

As at December 31, 2017 and December 31, 2016, the Bank's financial assets and liabilities are classified by remaining maturity as follows: (Million Baht) December 31, 2017 Less than 1 Month

Over 3 Months 1-3 Months

upto 1 Year

Over 1 Year

No Maturity

Total

436,285.59

32,790.72

65,811.50

14,292.22

Investments, net*

39,337.15

9,754.27

10,907.06

149,313.41

Loans to customers

110,911.92

101,363.25

408,884.17 1,244,324.08

586,534.66

143,908.24

485,602.73 1,407,929.71

1,557,499.12

134,289.86

252,969.41

128,835.62

-

2,073,594.01

163,604.12

8,558.36

8,303.53

38,600.74

-

219,066.75

16,335.70

50,935.03

-

67,271.43

277,608.64

218,371.39

-

2,359,932.19

Financial Assets Interbank and money market items, net

Total financial assets

10,697.95 -

549,180.03 220,009.84 1,865,483.42

10,697.95 2,634,673.29

Financial Liabilities Deposits Interbank and money market items, net Debt issued and borrowings

0.70

Total financial liabilities

1,721,103.94

*Included investments in subsidiaries and associates.

142,848.22

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4.1 The Bank's Risk Information (Continued) (Million Baht) December 31, 2016 Less than 1 Month

Over 3 Months 1-3 Months

upto 1 Year

Over 1 Year

31,422.10

101,101.20

23,062.35

58,816.44

167,853.60

No Maturity

Total

Financial Assets Interbank and money market items, net

275,764.56

Investments, net* Loans to customers

-

-

10,687.70

237,357.74

108,331.06

107,014.75

406,560.75 1,215,336.66

384,095.62

138,436.85

566,478.39 1,406,252.61

1,400,390.45

191,792.42

238,958.82

144,015.98

-

1,975,157.67

118,730.17

26,837.34

17,528.31

38,620.18

-

201,716.00

Debt issued and borrowings

0.70

5,155.00

15,133.32

50,973.84

-

71,262.86

Total financial liabilities

1,519,121.32

223,784.76

271,620.45

233,610.00

-

2,248,136.53

Total financial assets

-

431,350.21 1,837,243.22

10,687.70 2,505,951.17

Financial Liabilities Deposits Interbank and money market items, net

*Included investments in subsidiaries and associates. 4.2 Fair Value of Financial Instruments (Million Baht) Consolidated Financial Statements December 31, 2017 December 31, 2016 Book Value Fair Value Book Value Fair Value Financial Assets Cash Interbank and money market items, net Derivative assets Investments, net* Loans to customers and accrued interest receivables, net Total financial assets Financial Liabilities Deposits Interbank and money market items, net Liabilities payable on demand Derivative liabilities Debt issued and borrowings Total financial liabilities

*Included investments in subsidiaries and associates.

73,572.87 549,669.53 33,833.40 228,239.76 1,817,912.27 2,703,227.83

73,572.87 549,669.53 33,833.40 228,240.26 1,817,912.27 2,703,228.33

72,106.42 431,638.41 30,063.05 242,522.91 1,798,578.14 2,574,908.93

72,106.42 431,638.41 30,063.05 243,136.08 1,798,578.14 2,575,522.10

2,070,874.68 228,691.40 5,291.69 30,284.42 110,626.43 2,445,768.62

2,070,874.68 223,399.10 5,291.69 30,284.42 111,455.31 2,441,305.20

1,972,403.53 211,171.31 5,082.47 31,516.69 112,685.86 2,332,859.86

1,972,403.53 206,139.44 5,082.47 31,516.69 113,974.42 2,329,116.55

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4.2 Fair Value of Financial Instruments (Continued)

(Million Baht) The Bank's Financial Statements December 31, 2017 Book Value

Fair Value

December 31, 2016 Book Value

Fair Value

Financial Assets Cash

73,334.74

73,334.74

71,929.87

71,929.87

549,180.03

549,180.03

431,350.21

431,350.21

Derivative assets

33,842.51

33,842.51

30,084.83

30,084.83

Investments, net*

220,009.84

254,948.87

237,357.74

263,697.95

1,753,343.80

1,753,343.80

1,738,973.35

1,738,973.35

2,629,710.92

2,664,649.95

2,509,696.00

2,536,036.21

2,073,594.01

2,073,594.01

1,975,157.67

1,975,157.67

219,066.75

213,774.45

201,716.00

196,684.13

5,291.69

5,291.69

5,082.47

5,082.47

Derivative liabilities

30,284.42

30,284.42

31,516.69

31,516.69

Debt issued and borrowings

67,271.43

68,100.31

71,262.86

72,551.42

Total financial liabilities

2,395,508.30

2,391,044.88

2,284,735.69

2,280,992.38

Interbank and money market items, net

Loans to customers and accrued interest receivables, net Total financial assets Financial Liabilities Deposits Interbank and money market items, net Liabilities payable on demand

* Included investments in subsidiaries and associates. 4.3 Statutory Capital Fund As at December 31, 2017 and 2016 the Bank calculated capital fund based on Basel III framework of the BoT. Since 2016, BoT required commercial banks registered in Thailand to maintain a capital conservation buffer in additional the tier 1 capital fund ratios until completion of the increment to more than 2.5 percent of total risk weighted assets. It could be gradually increase and maintain the conservation buffer more than 0.625 percent per annum, beginning on January 1, 2016 onward until reaching full amounts on January 1, 2019. Capital Fund Ratios to Risk Weighted Assets 2017

2016

More than % More than % Tier 1 capital fund ratios - equity

5.75

5.125

Tier 1 capital fund ratios

7.25

6.625

Total capital fund ratios

9.75

9.125

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4.3 Statutory Capital Fund (Continued) The Bank also maintained capital fund and capital fund ratios to risk weighted assets in accordance with the BoT’s regulations as follows: (Million Baht) Financial Business Group December 31, 2017 December 31, 2016 Tier 1 capital fund - equity Paid-up share capital Premium on share capital Legal reserve Net income after appropriation Other components of equity Deduction items from Tier 1 capital fund - equity Tier 1 capital fund - financial instruments Total tier 1 capital fund Tier 2 capital fund Long-term subordinated debt Allowance for assets classified as pass Total tier 2 capital fund Total capital fund

72,005.04 20,833.74 7,200.50 156,895.32 20,937.26 (10,415.48) 1,149.97 268,606.35

72,005.04 20,833.74 7,200.50 140,137.84 17,049.51 (8,938.83) 1,036.48 249,324.28

51,810.16 22,331.26 74,141.42 342,747.77

52,098.48 21,783.56 73,882.04 323,206.32

(Million Baht) The Bank's Financial Statements December 31, 2017 December 31, 2016 Tier 1 capital fund - equity Paid-up share capital Premium on share capital Legal reserve Net income after appropriation Other components of equity Deduction items from Tier 1 capital fund - equity Total tier 1 capital fund Tier 2 capital fund Long-term subordinated debt Allowance for assets classified as pass Total tier 2 capital fund Total capital fund

72,005.04 20,833.74 7,200.50 147,414.43 14,860.62 (5,886.76) 256,427.57

72,005.04 20,833.74 7,200.50 134,179.80 14,019.78 (4,984.63) 243,254.23

51,810.16 21,072.95 72,883.11 329,310.68

52,098.48 20,995.59 73,094.07 316,348.30

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4.3 Statutory Capital Fund (Continued) Capital Fund Ratios to Risk Weighted Assets Financial Business Group

The Bank's Financial Statements

December 31, 2017

December 31, 2016

December 31, 2017

December 31, 2016

Tier 1 capital fund ratios - equity

13.42

12.75

13.59

12.96

Tier 1 capital fund ratios

13.48

12.81

13.59

12.96

Total capital fund ratios

17.20

16.60

17.45

16.85

The Bank discloses information about capital maintenance of the Bank and financial business group under the BoT’s notifications on disclosure of capital maintenance for commercial banks and disclosure of capital maintenance for financial business group. Channel of disclosure

www.ktb.co.th>Investor Relations>Financial Information>Pillar III Disclosures

Date of disclosure

Within April 30, 2018

Information as at

December 31, 2017

5. ESTIMATES AND ASSUMPTIONS The preparation of financial statements in conformity with the Thai financial reporting standards requires managements to make estimates and assumptions that affect the application of policies and reported amounts of assets, liabilities, income and expenses. Actual results may differ from such estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which estimates are revised and in any future periods affected. Information about significant areas at estimation uncertainty and assumptions in applying accounting policies has significant effects on the amount recognized in the financial statements. 6. RETROSPECTIVE RESTATEMENT AND RECLASSIFICATION 6.1 Retrospective Restatement TAS 28 regarding the Investments in Associates and Joint Venture also defines an associate by reference to the concept of “significant influence”. The Bank has considered that the Bank has a “significant influence” on National ITMX Co., Ltd., as defines in TAS 28. The Bank presents the investment in ITMX Co., Ltd. as an associate company. By retrospective restatement that affects the financial statement as at December 31, 2016, January 1, 2016, and for the year ended December 31, 2016 as follows:

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6.1 Retrospective Restatement (Continued) (Million Baht) Consolidated Financial Statements December 31, 2016 January 1, 2016 Increase (Decrease) Statements of Financial Position Assets Investment, net Investment in subsidiaries and associates, net Liabilities and Equity Equity Unappropriated

The Bank's Financial Statements December 31, 2016 January 1, 2016 Increase (Decrease)

(23.11) 280.80

(23.11) 260.18

(23.11) 23.11

(23.11) 23.11

257.69

237.07

-

-

(Million Baht) Consolidated Financial Statements The Year Ended December 31, 2016 Increase (Decrease) Statements of Profit or Loss and Other Comprehensive Income Share of profit from investments for using equity method Net profit Total comprehensive income Net profit attributable Equity holders of bank Total comprehensive income attributable Equity holders of bank

20.63 20.63 20.63 20.63 20.63

6.2 Reclassification The Bank reclassified items in the statements of financial position as at December 31, 2016 and January 1, 2016 in order to be consistent and comparable with the statements of financial position as at the year ended December 30, 2017. This reclassification is ineffective to net profit and Equity holders of the Bank as follows.

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6.2 Reclassification (Continued) (Million Baht) Consolidated Financial Statements Before

Reclassification

reclassification

After

The Bank's Financial Statements Before

Reclassification

reclassification reclassification

After reclassification

Statements of Financial Position As at December 31, 2559 Liabilities and Equity Interbank and Money Market Items, Net

203,166.31

8,005.00

211,171.31

193,711.00

8,005.00

201,716.00

Debt Issued and Borrowing

120,690.86

(8,005.00)

112,685.86

79,267.86

(8,005.00)

71,262.86

Interbank and Money Market Items, Net

194,242.84

6,655.00

200,897.84

177,701.20

6,655.00

184,356.20

Debt Issued and Borrowing

116,240.46

(6,655.00)

109,585.46

86,937.98

(6,655.00)

80,282.98

As at January 1, 2559 Liabilities and Equity

7. SUPPLEMENTARY INFORMATION 7.1 Supplementary Information of Cash Flows Significant non-cash items for the years ended December 31, 2017 and 2016 are as follows: (Million Baht) Consolidated Financial Statements

The Bank's Financial Statements

December 31, 2017 December 31, 2016 December 31, 2017 December 31, 2016 Increase in revaluation surplus on available-for-sale investments net income tax expenses* Increase in properties for sale from loan payment

*Included Gains (Losses) from reclassification of investments

1,104.30

5,379.51

1,104.30

5,379.51

4,426.16

12,179.94

4,426.16

12,179.94

(TRANSLATION)

40

7.2 Interbank and Money Market Items, Net (Assets)

(Million Baht) Consolidated Financial Statements December 31, 2016

December 31, 2017 Demand

Time

Total

Demand

Time

Total

7.2.1 Domestic Items Bank of Thailand and Financial Institutions Development Fund

15,428.20

392,249.35

407,677.55

21,401.88

171,800.40

193,202.28

493.02

3,197.44

3,690.46

297.79

34,841.55

35,139.34

Special purpose financial institutions

19.94

4,649.23

4,669.17

21.34

32,017.82

32,039.16

Other financial institutions

30.54

105,798.38

105,828.92

92.54

130,922.44

131,014.98

15,971.70

505,894.40

521,866.10

21,813.55

369,582.21

391,395.76

Commercial banks

Total Add Accrued interest receivables

-

292.55

292.55

-

281.06

281.06

Less Deferred Revenue

-

(5.89)

(5.89)

-

-

-

(0.67)

(4,108.49)

(4,109.16)

(1.00)

(1,756.18)

(1,757.18)

15,971.03

502,072.57

518,043.60

21,812.55

368,107.09

389,919.64

11,390.45

15,272.45

26,662.90

9,929.93

24,715.74

34,645.67

Less Allowance for doubtful accounts Total domestic items

7.2.2 Foreign Items US Dollar Japanese Yen

219.79

-

219.79

3,032.45

-

3,032.45

Euro

688.82

-

688.82

263.14

-

263.14

Other currencies

1,768.26

2,246.60

4,014.86

1,670.22

2,085.46

3,755.68

14,067.32

17,519.05

31,586.37

14,895.74

26,801.20

41,696.94

Add Accrued interest receivables

0.31

179.68

179.99

0.23

250.94

251.17

Less Deferred revenue

-

(1.15)

(1.15)

-

(1.33)

(1.33)

-

(139.28)

(139.28)

-

(228.01)

(228.01)

Total

Allowance for doubtful accounts Total foreign items

14,067.63

17,558.30

31,625.93

14,895.97

26,822.80

41,718.77

Total domestic and foreign items

30,038.66

519,630.87

549,669.53

36,708.52

394,929.89

431,638.41

(TRANSLATION)

41

7.2 Interbank and Money Market Items, Net (Assets) (Continued) (Million Baht) The Bank's Financial Statements December 31, 2016

December 31, 2017 Demand

Time

Total

Demand

Time

Total

7.2.1 Domestic Items Bank of Thailand and Financial Institutions Development Fund Commercial banks Special purpose financial institutions Other financial institutions Total

15,428.20

392,249.35

407,677.55

21,401.88

171,800.40

193,202.28

23.46

3,197.44

3,220.90

30.93

34,841.55

34,872.48

-

4,649.23

4,649.23

-

32,017.82

32,017.82

30.54

105,798.38

105,828.92

92.54

130,922.44

131,014.98

15,482.20

505,894.40

521,376.60

21,525.35

369,582.21

391,107.56

Add Accrued interest receivables

-

292.55

292.55

-

281.06

281.06

Less Deferred Revenue

-

(5.89)

(5.89)

-

-

-

(0.67)

(4,108.49)

(4,109.16)

(1.00)

(1,756.18)

(1,757.18)

15,481.53

502,072.57

517,554.10

21,524.35

368,107.09

389,631.44

11,390.45

15,272.45

26,662.90

9,929.93

24,715.74

34,645.67

Allowance for doubtful accounts Total domestic items

7.2.2 Foreign Items US Dollar Japanese Yen

219.79

-

219.79

3,032.45

-

3,032.45

Euro

688.82

-

688.82

263.14

-

263.14

Other currencies

1,768.26

2,246.60

4,014.86

1,670.22

2,085.46

3,755.68

14,067.32

17,519.05

31,586.37

14,895.74

26,801.20

41,696.94

Add Accrued interest receivables

0.31

179.68

179.99

0.23

250.94

251.17

Less Deferred revenue

-

(1.15)

(1.15)

-

(1.33)

(1.33)

-

(139.28)

(139.28)

-

(228.01)

(228.01)

Total

Allowance for doubtful accounts Total foreign items

14,067.63

17,558.30

31,625.93

14,895.97

26,822.80

41,718.77

Total domestic and foreign items

29,549.16

519,630.87

549,180.03

36,420.32

394,929.89

431,350.21

(TRANSLATION)

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7.3 Derivatives Held for Trading The Fair Values and the Notional Amounts Classified by Type of Risk (Million Baht) Consolidated Financial Statements

Type of Risk Exchange rate Interest rate Others Total

December 31, 2017 Fair Value Assets Liabilities 24,337.94 20,486.77 4,913.34 4,736.26 4,582.12 5,061.39 33,833.40 30,284.42

December 31, 2016 Fair Value Notional Assets Liabilities Amounts 22,954.07 24,803.64 1,638,535.02 4,088.77 3,676.02 945,244.59 3,020.21 3,037.03 81,077.83 30,063.05 31,516.69 2,664,857.44

Notional Amounts 1,778,097.10 1,162,066.51 88,843.22 3,029,006.83

(Million Baht) The Bank's Financial Statements December 31, 2017

December 31, 2016

Fair Value Assets Liabilities

Notional Amounts

24,337.94

20,486.77

1,778,097.10

22,954.06

24,803.64

1,638,535.02

Interest rate

4,922.45

4,736.26

1,162,958.94

4,110.56

3,676.02

947,082.35

Others

4,582.12

5,061.39

88,843.22

3,020.21

3,037.03

81,077.83

33,842.51

30,284.42

3,029,899.26

30,084.83

31,516.69

2,666,695.20

Type of Risk Exchange rate

Total

Fair Value Assets Liabilities

Notional Amounts

The Proportion of Derivative Transactions Classified by Type of Counterparty based on the Notional Amounts Consolidated Financial Statements Counterparty

December 31, 2017 December 31, 2016 December 31, 2017 December 31, 2016 Proportion

Financial institutions Financial business group Third parties Total

The Bank's Financial Statements

Proportion

Proportion

Proportion

76.16%

79.65%

76.14%

79.60%

0.32%

0.12%

0.35%

0.19%

23.52%

20.23%

23.51%

20.21%

100.00%

100.00%

100.00%

100.00%

(TRANSLATION)

43

7.4 Investments, Net Consolidated Financial Statements December 31, 2017 December 31, 2016 Fair Value

7.4.1 Trading Securities Government & state enterprise securities Private enterprise debt securities Total 7.4.2 Available-for-Sale Securities Government & state enterprise securities Private enterprise debt securities Foreign debt securities Domestic marketable equity securities Foreign marketable equity securities Total

Fair Value

Fair Value

8,315.31 168.60 8,483.91

15,210.53 1,892.59 17,103.12

8,315.31 171.61 8,486.92

15,210.53 1,912.12 17,122.65

111,990.81 6,383.60 27,295.31

69,006.84 3,792.08 20,296.92

111,990.81 6,383.60 27,295.31

69,006.84 3,792.08 20,296.92

12,348.33

12,582.23

12,348.33

12,582.23

478.68 158,496.73

562.79 106,240.86

478.68 158,496.73

562.79 106,240.86

Cost/ Amortized Cost 7.4.3 Held-to-Maturity Debt Securities Government & state enterprise securities Private enterprise debt securities Foreign debt securities Total Less Allowance for impairment Total 7.4.4 General Investments Domestic non-marketable equity securities Foreign non-marketable equity securities Others Total Less Allowance for impairment Total Total investments, net

Fair Value

(Million Baht) The Bank's Financial Statements December 31, 2017 December 31, 2016

Cost/ Amortized Cost

Cost/ Amortized Cost

Cost/ Amortized Cost

35,510.74 295.96 6,066.15 41,872.85 (35.71) 41,837.14

86,837.65 2,692.12 13,261.61 102,791.38 (35.87) 102,755.51

35,305.14 295.96 6,066.15 41,667.25 (35.71) 41,631.54

86,556.74 2,692.12 13,261.61 102,510.47 (35.87) 102,474.60

1,862.19

1,943.22

1,862.14

1,943.17

3.97 0.82 1,866.98 (1,170.23) 696.75 209,514.53

70.73 0.90 2,014.85 (1,182.88) 831.97 226,931.46

3.97 0.82 1,866.93 (1,170.23) 696.70 209,311.89

70.73 0.90 2,014.80 (1,182.88) 831.92 226,670.03

(TRANSLATION)

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7.4 Investments, Net (Continued) As at December 31, 2017 and 2016, general investments which are domestic non-marketable equity securities of Baht 1,862.14 million and Baht 1,943.17 million respectively, included investments in the Islamic Bank of Thailand of Baht 1,048.15 million which the Bank reserved the full amount of allowance for impairment and included investment for government policy support by investing in Private Equity Trust for SME Growing Together of Baht 34.79 million. 7.4.5 As at December 31, 2017 and 2016 Unrealized gains or losses arising from the revaluation of available-for-sale securities are as follows: (Million Baht) Consolidated and The Bank's Financial Statements December 31, 2017

Cost 1 Available-for-Sale Securities

150,307.36

December 31, 2016

Unrealized

Unrealized

Fair

Gain 2

Loss 2

Value

9,253.48

(1,064.11) 158,496.73

1

Net of allowance for impairment

2

Included Gains (Losses) from reclassification of investments

Unrealized

Unrealized

Fair

Cost 1

Gain

Loss

Value

99,431.86

7,811.97

(1,002.97) 106,240.86

7.4.6 As at December 31, 2017 and 2016 the Bank had investments in foreign securities affected by foreign exchange rate, resulting in a decrease of the carrying amount of Baht 965.77 million and Baht 86.94 million, respectively. 7.4.7 In addition, the Bank has acquired the investments in other securities, whereby the Bank holds for equal to or over 10 percent of the paid-up capital, classified into industrial sector and stated at their fair value as follows : (Million Baht) Consolidated and The Bank's Financial Statements December 31, 2017 Manufacturing

-

December 31, 2016 1.00

Public utilities and services

1,474.17

1,737.48

Total

1,474.17

1,738.48

7.4.8 As at December 31, 2017, the Bank has investments in 2 listed companies in which their financial position and performance fall under SET's delisted criteria, cost of Baht 0.10 million which are reserved full amount of allowance for impairment.

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7.5 Investments in Subsidiaries and Associates, Net 7.5.1 The Bank's Financial Statements (Million Baht) December 31, 2017 Percentages of Name of Company

Type of Business

Investments

Type of Shares Shareholdings (Cost Method)

Dividend

Subsidiaries KTB Law Co., Ltd.

Legal Services

Ordinary

100.00

30.00

19.00

KTB General Services and Security Co., Ltd.

General Services

Ordinary

100.00

140.00

203.00

Krung Thai Asset Management Pcl.

Securities Business

Ordinary

100.00

210.90

232.00

KTB Computer Services Co., Ltd.

IT Services

Ordinary

100.00

1,300.00

27.30

KTB Leasing Co., Ltd.*

Hire Purchase

Ordinary

100.00

1,000.00

-

KTB Advisory Co., Ltd.

Financial Counseling &

Ordinary

100.00

40.00

-

Ordinary

49.45

1,994.60

510.00

4,715.50

991.30

(802.46)

-

3,913.04

991.30

Advisory Services Krungthai Card Pcl.***

Credit Card Business

Total Less Allowance for impairment**** Total

Associates Krungthai-AXA Life Insurance Pcl.

Life Insurance

Ordinary

50.00

4,071.77

1,825.00

Krungthai Panich Insurance Pcl.

Non-Life Insurance

Ordinary

45.00

1,518.82

158.40

Krung Thai IBJ Leasing Co., Ltd.

Hire Purchase

Ordinary

49.00

87.38

39.05

KT Zmico Securities Co., Ltd.

Securities Business

Ordinary

50.00

1,068.89

National ITMX Co., Ltd.

Service

Ordinary

21.13

38.05

6.19

6,784.91

2,028.64

10,697.95

3,019.94

Total Investments in subsidiaries and associates, net

-

(TRANSLATION)

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7.5 Investments in Subsidiaries and Associates, Net (Continued) 7.5.1 The Bank's Financial Statements (Continued) (Million Baht) December 31, 2016 Percentages of Name of Company

Type of Business

Investments

Type of Shares Shareholdings (Cost Method) Dividend

Subsidiaries KTB Law Co., Ltd.

Legal Services

Ordinary

100.00

30.00

15.00

KTB General Services and Security Co., Ltd.

General Services

Ordinary

100.00

140.00

205.80

Krung Thai Asset Management Pcl.

Securities Business

Ordinary

100.00

210.90

205.00

KTB Computer Services Co., Ltd.

IT Services

Ordinary

100.00

1,300.00

13.00

KTB Leasing Co., Ltd.*

Hire Purchase

Ordinary

100.00

1,000.00

-

KTB Capital Holding Co., Ltd.**

Holding

Ordinary

100.00

1.00

-

KTB Advisory Co., Ltd.

Financial Counseling &

Ordinary

100.00

40.00

20.00

Ordinary

49.45

1,994.60

414.38

4,716.50

873.18

Advisory Services Krungthai Card Pcl.***

Credit Card Business

Total

(798.77)

Less Allowance for impairment**** Total

3,917.73

873.18

Associates Krungthai-AXA Life Insurance Pcl.

Life Insurance

Ordinary

50.00

4,071.77

1,875.00

Krungthai Panich Insurance Pcl.

Non-Life Insurance

Ordinary

45.00

1,518.82

158.40

Krung Thai IBJ Leasing Co., Ltd.

Hire Purchase

Ordinary

49.00

87.38

34.20

KT Zmico Securities Co., Ltd.

Securities Business

Ordinary

50.00

1,068.89

138.63

National ITMX Co., Ltd.

Service

Ordinary

20.06

23.11

Total Investments in subsidiaries and associates, net

-

6,769.97

2,206.23

10,687.70

3,079.41

* Under consideration of business restructuring plan. ** Registered as the business dissolution on December 18, 2014 and completed registration of liquidation on September 13, 2017. *** The Bank has entity control. **** Allowance for impairment in subsidiaries occurs from cost higher than book value.

(TRANSLATION)

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7.5 Investments in Subsidiaries and Associates, Net (Continued) 7.5.2 The Consolidated Financial Statements (Million Baht)

Name of Company Associates Krungthai-AXA Life Insurance Pcl. Krungthai Panich Insurance Pcl. Krung Thai IBJ Leasing Co., Ltd. KT Zmico Securities Co., Ltd. National ITMX Co., Ltd. Total investments in associates, net

Type of Business Life Insurance Non-Life Insurance Hire Purchase Securities Business Service

Type of Shares Ordinary Ordinary Ordinary Ordinary Ordinary

December 31, 2017 Percentages of Investments Investments Shareholdings (Cost Method) (Equity Method) 50.00 45.00 49.00 50.00 21.13

593.57 971.30 87.38 1,068.89 38.05 2,759.19

13,906.41 2,674.67 617.15 1,220.55 306.44 18,725.22

(Million Baht)

Name of Company Associates Krungthai-AXA Life Insurance Pcl. Krungthai Panich Insurance Pcl. Krung Thai IBJ Leasing Co., Ltd. KT Zmico Securities Co., Ltd. National ITMX Co., Ltd. Total investments in associates, net

Type of Business Life Insurance Non-Life Insurance Hire Purchase Securities Business Service

Type of Shares Ordinary Ordinary Ordinary Ordinary Ordinary

December 31, 2016 Percentages of Investments Investments Shareholdings (Cost Method) (Equity Method) 50.00 45.00 49.00 50.00 20.06

593.57 971.30 87.38 1,068.89 23.11 2,744.25

10,893.64 2,614.41 577.29 1,225.31 280.80 15,591.45

Investments in associates are accounted in the consolidated financial statements using the equity method based on financial information from unaudited/unreviewed financial statements of the associates. 7.5.3 Financial Positions and Operations of Associates (Million Baht)

Name of Company Krungthai-AXA Life Insurance Pcl. Krungthai Panich Insurance Pcl. Krung Thai IBJ Leasing Co., Ltd. KT Zmico Securities Co., Ltd. National ITMX Co., Ltd.

Consolidated Financial Statements December 31, 2017 December 31, 2016 "Unaudited" "Audited" Total Assets Total Liabilities Shareholders' Equity Total Assets Total Liabilities Shareholders' Equity 244,733.14 216,920.32 27,812.82 201,598.62 179,811.33 21,787.29 9,182.15 3,238.44 5,943.71 8,961.00 3,243.16 5,717.84 9,760.35 8,500.86 1,259.49 9,008.12 7,836.85 1,171.27 8,908.78 6,467.68 2,441.10 10,707.75 8,272.51 2,435.24 1,602.84 153.95 1,448.89 1,627.84 228.01 1,399.83 274,187.26 235,281.25 38,906.01 231,903.33 199,391.86 32,511.47

(TRANSLATION)

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7.5 Investments in Subsidiaries and Associates, Net (Continued) 7.5.3 Financial Positions and Operations of Associates (Continued) (Million Baht) Consolidated Financial Statements December 31, 2017 December 31, 2016 "Unaudited" "Audited" Total Income Net Profit (Loss) Total Income Net Profit (Loss) 71,905.21 3,814.88 62,570.44 5,114.65 3,038.86 618.51 3,075.40 566.14 851.22 167.92 728.84 159.49 1,492.62 15.14 2,045.97 377.79 516.93 79.90 512.69 102.83 77,804.84 4,696.35 68,933.34 6,320.90

Name of Company Krungthai-AXA Life Insurance Pcl. Krungthai Panich Insurance Pcl. Krung Thai IBJ Leasing Co., Ltd. KT Zmico Securities Co., Ltd. National ITMX Co., Ltd.

7.6 Loans to Customers and Accrued Interest Receivables, Net 7.6.1 Classified by Type of Loans Consolidated Financial Statements December 31, 2017 December 31, 2016

Overdrafts Loans Bills Hire purchase receivables Financial lease receivables Others Less Deferred revenue Total loans to customers net of deferred revenue Add Accrued interest receivables Total loans to customers net of deferred revenue, plus accrued interest receivables Less Allowance for doubtful accounts 1. Minimum reserve under BoT's regulations Individual approach Collective approach 2. Excess allowance Less Revaluation allowance for debt restructuring Total loans to customers, net

(Million Baht) The Bank's Financial Statements December 31, 2017 December 31, 2016

168,278.16 1,295,457.88 450,791.70 18,514.79 4,352.46 2,532.83 (1,846.30) 1,938,081.52 5,211.74

170,948.74 1,294,499.04 398,860.88 33,065.85 7,742.24 2,705.20 (3,733.25) 1,904,088.70 5,270.68

168,278.16 1,237,594.66 458,391.70 1.74 1,217.16 (87.09) 1,865,396.33 4,691.08

170,948.74 1,258,147.90 406,420.88 4.54 1,721.16 (122.92) 1,837,120.30 4,774.56

1,943,293.26

1,909,359.38

1,870,087.41

1,841,894.86

(85,134.73) (3,803.50) (36,425.50) (17.26) 1,817,912.27

(84,302.74) (4,010.43) (22,406.45) (61.62) 1,798,578.14

(82,907.08) (33,819.27) (17.26) 1,753,343.80

(82,639.69) (20,220.20) (61.62) 1,738,973.35

As at December 31, 2017, the Bank has loans to accommodate the government policy program such as SMEs soft loans for working capital, SMEs soft loans for modifying the machine and optimizing production, Financial for supporting to people affected from the flood by the BoT’s measure, Financial for supporting to entrepreneurs in 3 Southern border provinces, The revolving financial project for energy conservation by financial institution phase 6 and Loan project for environmental totaling to Baht 38,462.58 millions.

(TRANSLATION)

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7.6 Loans to Customers and Accrued Interest Receivables, Net (Continued) 7.6.1 Classified by Type of Loans (Continued) As at December 31, 2017 and 2016, the Bank's other loans of Baht 1,217.16 million and Baht 1,721.16 million included debts resulting from the Bank's liabilities under acceptances or guarantees of Baht 1,163.72 million and Baht 1,646.99 million, respectively. 7.6.2 Classified by Currency and Customer's Residence (Million Baht) Consolidated Financial Statements December 31, 2017 Domestic

Foreign

December 31, 2016 Total

Domestic

Foreign

Total

Thai Baht

1,841,799.36

1.37

1,841,800.73

1,792,770.33

5.80

1,792,776.13

US Dollar

65,792.54

27,554.29

93,346.83

69,582.56

31,510.69

101,093.25

2,801.53

132.43

2,933.96

10,147.36

71.96

10,219.32

1,910,393.43

27,688.09

1,938,081.52

1,872,500.25

31,588.45

1,904,088.70

Other currencies Total

The Bank's Financial Statements December 31, 2017 Domestic

Foreign

December 31, 2016 Total

Domestic

Foreign

Total

Thai Baht

1,769,114.17

1.37

1,769,115.54

1,725,801.93

5.80

1,725,807.73

US Dollar

65,792.54

27,554.29

93,346.83

69,582.56

31,510.69

101,093.25

2,801.53

132.43

2,933.96

10,147.36

71.96

10,219.32

1,837,708.24

27,688.09

1,865,396.33

1,805,531.85

31,588.45

1,837,120.30

Other currencies Total

7.6.3 Classified by Business Types and Loan Classification (Million Baht) Consolidated Financial Statements December 31, 2017 Normal

Special Mention

Substandard

Doubtful

Doubtful of Loss

Total

26,110.94

1,780.74

246.10

10,275.71

782.07

39,195.56

474,662.38

34,147.33

5,018.44

13,058.77

24,680.61

551,567.53

Real estate and construction

88,839.74

5,472.79

406.89

2,881.74

7,996.12

105,597.28

Public utilities and services

293,552.42

16,019.45

663.85

4,383.22

5,730.66

320,349.60

Housing loans

327,161.82

6,143.16

2,845.77

3,205.40

10,566.70

349,922.85

Others

555,641.01

5,529.32

3,060.44

2,085.12

5,132.81

571,448.70

1,765,968.31

69,092.79

12,241.49

35,889.96

54,888.97

1,938,081.52

Agriculture and mining Manufacturing and commercial

Total

(TRANSLATION)

50

7.6 Loans to Customers and Accrued Interest Receivables, Net (Continued) 7.6.3 Classified by Business Types and Loan Classification (Continued) (Million Baht) Consolidated Financial Statements December 31, 2016 Normal

Special Mention

Substandard

Doubtful

Doubtful of Loss

Total

38,500.32

709.91

201.63

522.77

864.72

40,799.35

Manufacturing and commercial

500,018.36

34,910.32

5,311.79

6,436.80

27,527.34

574,204.61

Real estate and construction

109,088.22

7,104.43

718.16

1,853.40

8,416.61

127,180.82

Public utilities and services

237,383.95

15,281.84

2,568.43

2,998.21

5,768.78

264,001.21

Housing loans

338,321.25

6,211.63

3,214.09

3,000.13

11,022.30

361,769.40

Others

519,569.43

5,860.81

2,137.74

2,205.41

6,359.92

536,133.31

1,742,881.53

70,078.94

14,151.84

17,016.72

59,959.67

1,904,088.70

Agriculture and mining

Total

(Million Baht) The Bank's Financial Statements December 31, 2017 Normal

Special Mention

Substandard

Doubtful

Doubtful of Loss

Total

25,778.58

1,763.73

213.23

10,226.42

755.76

38,737.72

470,747.10

33,986.11

4,925.07

12,866.04

24,335.96

546,860.28

Real estate and construction

88,548.16

5,400.04

355.13

2,513.17

7,852.42

104,668.92

Public utilities and services

290,011.94

15,765.12

563.18

4,249.00

5,399.54

315,988.78

Housing loans

327,161.82

6,143.16

2,845.77

3,205.41

10,566.70

349,922.86

Others

498,070.34

3,382.84

2,746.93

1,847.41

3,170.25

509,217.77

1,700,317.94

66,441.00

11,649.31

34,907.45

52,080.63

1,865,396.33

Agriculture and mining Manufacturing and commercial

Total

(Million Baht)

Agriculture and mining Manufacturing and commercial Real estate and construction Public utilities and services Housing loans Others Total

Normal Special Mention 37,725.14 673.65 493,212.56 34,444.13 106,526.91 6,995.96 230,984.42 14,956.64 338,321.25 6,211.63 476,992.51 3,289.55 1,683,762.79 66,571.56

The Bank's Financial Statements December 31, 2016 Substandard Doubtful Doubtful of Loss 198.41 499.38 844.23 5,163.22 6,276.31 27,235.31 625.33 1,800.39 8,320.79 1,959.66 2,794.07 5,665.26 3,214.09 3,000.13 11,022.30 1,684.47 1,967.06 4,515.54 12,845.18 16,337.34 57,603.43

Total 39,940.81 566,331.53 124,269.38 256,360.05 361,769.40 488,449.13 1,837,120.30

(TRANSLATION)

51

7.6 Loans to Customers and Accrued Interest Receivables, Net (Continued) 7.6.4 Classified by Loan Classification (Million Baht)

Loans and Accrued Interest Receivables 1. Minimum reserve under BoT's regulations Normal Special mention Substandard Doubtful Doubtful of loss 2. Excess allowance Total

Consolidated Financial Statements December 31, 2017 Net Amount % Used for Set aside Used for Set aside the Allowance for the Allowance for Doubtful Accounts

1

1,770,815.82 69,361.72 12,242.99 35,890.08 54,982.65

884,654.34 28,189.24 7,265.67 23,198.05 19,924.29

1,943,293.26

963,231.59

Doubtful Accounts

Allowance for Doubtful 2

1 2 100 100 100

Accounts 11,067.33 17,305.19 7,289.59 25,029.24 28,246.88 36,425.50 125,363.73 (Million Baht)

Consolidated Financial Statements December 31, 2016 Net Amount % Loans and Used for Set aside Used for Set aside Allowance Accrued Interest the Allowance for the Allowance for for Doubtful 1 2 Receivables Doubtful Accounts Doubtful Accounts Accounts 1. Minimum reserve under BoT's regulations Normal Special mention Substandard Doubtful Doubtful of loss 2. Excess allowance Total

1,747,553.39 70,527.65 14,156.39 17,059.06 60,062.89

887,489.96 27,223.69 6,714.81 8,778.08 27,194.77

1,909,359.38

957,401.31

1 2 100 100 100

16,062.69 21,790.10 6,784.86 9,059.46 34,616.06 22,406.45 110,719.62 (Million Baht)

The Bank's Financial Statements December 31, 2017 Net Amount % Loans and Used for Set aside Used for Set aside Accrued Interest the Allowance for the Allowance for Receivables Doubtful Accounts1 Doubtful Accounts 1. Minimum reserve under BoT's regulations Normal Special mention Substandard Doubtful Doubtful of loss 2. Excess allowance Total

1,704,657.61 66,699.01 11,649.33 34,907.56 52,173.90

834,514.36 26,762.37 6,979.62 22,820.07 17,177.45

1,870,087.41

908,253.87

1 2 100 100 100

Allowance for Doubtful Accounts 8,948.50 16,803.74 7,003.55 24,651.26 25,500.03 33,819.27 116,726.35

(TRANSLATION)

52

7.6 Loans to Customers and Accrued Interest Receivables, Net (Continued) 7.6.4 Classified by Loan Classification (Continued) (Million Baht) The Bank's Financial Statements December 31, 2016 Net Amount

%

Loans and

Used for Set aside

Used for Set aside

Allowance

Accrued Interest

the Allowance for

the Allowance for

for Doubtful

Doubtful Accounts

Accounts

Receivables

Doubtful Accounts

1

1. Minimum reserve under BoT's regulations Normal

1,687,953.47

858,559.84

1

14,126.11

Special mention

67,008.34

25,605.38

2

21,232.11

Substandard

12,845.26

6,138.19

100

6,208.25

Doubtful

16,337.39

8,442.16

100

8,723.54

Doubtful of loss

57,750.40

24,928.40

100

32,349.68

2. Excess allowance Total

20,220.20 1,841,894.86

923,673.97

102,859.89

1

Net amount used for set aside the allowance for doubtful accounts represents outstanding amount of principal excluding accrued interest receivables after deducted collateral, or debts after deducted the present value of expected cash flows from debtors, or present value of expected cash flows from sale of collateral. 2 Included loss rate net of recovery. 7.6.5 Non-Performing Loans (NPLs) As at December 31, 2017 and 2016, the Bank and its subsidiaries had NPLs classified by the BoT’s notifications as substandard, doubtful, doubtful of loss, and loss. Those are included loans that are interbank and money market items but excluded accrued interest receivables. (Million Baht)

NPLs before deducting allowance for doubtful accounts NPLs percentage of total loans NPLs after deducting allowance for doubtful accounts NPLs percentage of net loans

Consolidated Financial Statements

The Bank's Financial Statements

December 31, 2017 December 31, 2016

December 31, 2017 December 31, 2016

103,020.42

91,128.23

98,637.39

86,785.96

4.19

3.97

4.14

3.89

42,506.32

40,757.88

41,532.26

39,591.50

1.77

1.81

1.78

1.81

For the years ended December 31, 2017 and 2016, impaired loans have been written off both principal and accrued interest receivables of Baht 23,738.68 million and Baht 1,508.74 million, respectively.

(TRANSLATION)

53

7.6 Loans to Customers and Accrued Interest Receivables, Net (Continued) 7.6.6 Non-Accrual Loans based on the Accrual Basis As at December 31, 2017 and 2016, the Bank and its subsidiaries have non-accrual loans based on the accrual basis and comply with the BoT’s regulations as follows:

Non-accrual loans Percentage of total loans

Consolidated Financial Statements December 31, 2017 December 31, 2016 103,020.42 91,128.23 4.19 3.97

(Million Baht) The Bank's Financial Statements December 31, 2017 December 31, 2016 98,637.39 86,785.96 4.14 3.89

7.6.7 Loans to Potential Delisted Companies As at December 31, 2017 and 2016, the Bank and its subsidiaries has loans and accrued interest receivables to 5 potential delisted companies of Baht 10,331.11 million, accrued interest receivables of Baht 0.12 million, totaling to Baht 10,331.23 million which an allowance for doubtful accounts of Baht 7,640.29 million. Moreover, there are 3 potential delisted companies of Baht 10,855.55 million, accrued interest receivables of Baht 0.09 million, totaling to Baht 10,855.64 million which after an allowance for doubtful accounts of Baht 7,643.52 million, respectively. 7.6.8 Troubled Debt Restructuring (TDR) For the year ended December 31, 2017 , the original loan value of the 9,424 troubled debt restructuring cases are Baht 63,019.02 million. The repayment for related interest and principal are Baht 11,291.61, whereas extended lending increased by Baht 49,657.77 million and Bad debts from troubled debt restructuring of Baht 2.88 million. TDR for the year ended December 31, 2017 is set out as follows: (Million Baht) The Bank's Financial Statements

Troubled Debt Restructuring Methods Transfers of assets Change of repayment conditions Debt restructuring in various forms

Outstanding

Type of

No. of

Debt before

Transferred

Cases

Restructuring

Assets

28

1,161.40 Land & Premises

401

26,542.34

8,995

35,315.28

9,424

63,019.02

Fair Value 1,161.40

As at December 31, 2017, the Bank has outstanding balance of loans to restructured debts for 36,555 cases of Baht 162,034.82 million, of which 13,097 cases of Baht 8,751.45 million, has been monitored under the new contractual agreements. The consolidated financial statements for the year ended December 31, 2017, the Bank restructured debts of 9,492 cases which the debts before restructuring were Baht 65,605.11 million. For year ended December 31, 2016, the Bank entered debts restructuring agreement of 11,662 cases, which the debts before restructuring were Baht 59,910.77 million, received from the principle repayments of Baht 27,350.82 million, additional lending of Baht 42,374.69 million and bad debts from debt restructuring of Baht 23.66 million.

(TRANSLATION)

54

7.6 Loans to Customers and Accrued Interest Receivables, Net (Continued) 7.6.8 Troubled Debt Restructuring (TDR) (Continued) TDR for the year ended December 31, 2016 was set out as follows: (Million Baht) The Bank's Financial Statements

Troubled Debt Restructuring Methods Transfers of assets

Outstanding

Type of

No. of

Debt before

Transferred

Cases

Restructuring

Assets

25

Change of repayment conditions Debt restructuring in various forms

Fair Value

731.47 Land & Premises

544

15,396.92

11,093

43,782.38

11,662

59,910.77

716.59

As at December 31, 2016 the Bank has outstanding balance of loans to restructured debts for 34,314 cases of Baht 124,053.72 million, of which 9,348 cases of Baht 11,645.62 million, has been monitored under the new contractual agreements. The consolidated financial statements for the year ended December 31, 2016, the Bank restructured debts of 11,996 cases which the debts before restructuring were Baht 61,406.17 million. 7.6.9 Financial Lease Receivables (Including Hire Purchase Receivables and Financial Lease Receivables) (Million Baht) Consolidated Financial Statements

Gross investment of leases payment

December 31, 2017

December 31, 2016

Amount Due of the Contract

Amount Due of the Contract

Not Over

Over

Over

1 Year

1 - 5 Years

5 Years

12,762.83 10,069.96

Total

34.46 22,867.25

Not Over

Over

Over

1 Year

1 - 5 Years

5 Years

19,392.43 20,973.33

Total

442.33 40,808.09

Less Unearned financial income

(1,759.45)

(3,611.89)

Present value of minimum leases payment

21,107.80

37,196.20

Less Allowance for doubtful accounts

(1,841.17)

(1,863.93)

Financial lease receivables, net

19,266.63

35,332.27

(TRANSLATION)

55

7.6 Loans to Customers and Accrued Interest Receivables, Net (Continued) 7.6.9 Financial Lease Receivables (Including Hire Purchase Receivables and Financial Lease Receivables) (Continued) (Million Baht) The Bank's Financial Statements

Gross investment of leases payment

December 31, 2017

December 31, 2016

Amount Due of the Contract

Amount Due of the Contract

Not Over

Over

Over

1 Year

1 - 5 Years

5 Years

1.74

-

Not Over

Over

Over

1 Year

1 - 5 Years

5 Years

Total

-

1.74

4.54

-

-

Total 4.54

Less Unearned financial income

(0.24)

(0.55)

Present value of minimum leases payment

1.50

3.99

Less Allowance for doubtful accounts

(1.46)

(2.98)

Financial lease receivables, net

0.04

1.01

7.7 Allowance for Doubtful Accounts (Million Baht) Consolidated Financial Statements December 31, 2017 Allowance in Excess of Special Substandard Doubtful

Doubtful

BoT's

of Loss

Regulations

Normal

Mention

Total

Beginning balances

16,062.69

21,790.10

6,784.86

9,059.46

34,616.06

22,406.45 110,719.62

Doubtful accounts

(2,603.05)

(3,601.68)

5,359.53

16,165.46

15,362.30

14,019.05

44,701.61

Allowance for doubtful accounts transferred from allowance for debt restructuring revaluation

-

44.36

-

-

Bad debt recovered

-

-

-

-

Bad debt written-off

(191.72)

(864.93)

(2,200.59)

(62.66)

11,067.33

17,305.19

Others Ending balances

(4,854.80) 7,289.59

-

44.36

2,493.41

-

2,493.41

(195.68) (24,182.01)

-

(30,289.14)

-

(2,306.13)

25,029.24

-

(42.88) 28,246.88

36,425.50 125,363.73

(TRANSLATION)

56

7.7 Allowance for Doubtful Accounts (Continued) (Million Baht) Consolidated Financial Statements December 31, 2016 Allowance in Excess of Special Substandard

Doubtful

Doubtful

BoT's

of Loss

Regulations

Normal

Mention

Total

Beginning balances

15,163.11

11,014.83

8,975.04

9,715.25

17,068.79

23,886.91

85,823.93

Doubtful accounts

1,214.02

11,611.67

2,164.53

(196.86)

19,950.18

(1,480.46)

33,263.08

130.50

(59.49)

-

-

Bad debt recovered

-

-

-

-

Bad debt written-off

(205.66)

(750.96)

Others

(239.28)

(25.95)

16,062.69

21,790.10

Allowance for doubtful accounts transferred from (to) allowance for debt restructuring revaluation

Ending balances

(4,354.71) 6,784.86

-

71.01

1,279.89

-

1,279.89

(458.93)

(2,903.77)

-

(8,674.03)

-

(779.03)

-

(1,044.26)

9,059.46

-

34,616.06

22,406.45 110,719.62

(Million Baht) The Bank's Financial Statements December 31, 2017 Allowance in Excess of Special Substandard Doubtful

Doubtful

BoT's

of Loss

Regulations

Normal

Mention

Total

Beginning balances

14,126.11

21,232.11

6,208.25

8,723.54

32,349.68

20,220.20 102,859.89

Doubtful accounts

(2,977.02)

(4,410.07)

795.30

15,927.72

14,565.00

13,599.07

37,500.00

Allowance for doubtful accounts transferred from allowance for debt restructuring revaluation

-

44.36

-

-

Bad debt recovered

-

-

-

-

Bad debt written-off

-

-

-

(2,200.59)

(62.66)

-

8,948.50

16,803.74

Others Ending balances

7,003.55

-

44.36

2,366.91

-

2,366.91

-

(23,738.68)

-

(23,738.68)

-

(42.88)

-

(2,306.13)

24,651.26

-

25,500.03

33,819.27 116,726.35

(TRANSLATION)

57

7.7 Allowance for Doubtful Accounts (Continued) (Million Baht) The Bank's Financial Statements December 31, 2016 Allowance in Excess of Special Substandard

Doubtful

Doubtful

BoT's

of Loss

Regulations

Normal

Mention

Total

Beginning balances

13,190.30

10,240.94

8,413.17

9,332.64

14,220.78

21,823.23

77,221.06

Doubtful accounts

1,044.59

11,076.61

(2,204.92)

(609.10)

19,295.85

(1,603.03)

27,000.00

130.50

(59.49)

-

-

Bad debt recovered

-

-

-

-

Bad debt written-off

-

-

-

(239.28)

(25.95)

-

14,126.11

21,232.11

Allowance for doubtful accounts transferred from (to) allowance for debt restructuring revaluation

Others Ending balances

6,208.25

-

71.01

1,120.82

-

1,120.82

-

(1,508.74)

-

(1,508.74)

-

(779.03)

-

(1,044.26)

8,723.54

-

32,349.68

20,220.20 102,859.89

For the year ended December 31, 2017, the Bank has set aside allowance for doubtful accounts of Baht 37,500 million, including with the case that the Bank decided to set aside allowance for doubtful accounts in full amount of loans to the major group of debtor. The core business of the debtor group is agriculture and mining. For the year ended December 31, 2016, the Bank has set aside allowance for doubtful accounts of Baht 27,000 million. 7.8 Revaluation Allowance for Debt Restructuring (Million Baht) Consolidated and the Bank's Financial Statements December 31, 2017

December 31, 2016

Beginning balances

61.62

132.63

Transfer to allowance for doubtful accounts

(44.36)

(71.01)

Ending balances

17.26

61.62

The revaluation allowance for debt restructuring was transferred from allowance for doubtful accounts for restructured debtors, and transferred to allowance for doubtful accounts when the debtors failed to comply with the new troubled debt restructuring agreement. The revaluation allowance for debt restructuring has not been amortized and recognized as income upon receipt of debt repayment but transferred to allowance for doubtful accounts instead as the restructured debts may again become non-performing.

(TRANSLATION)

58

7.9 Properties for Sale, Net (Million Baht) Consolidated Financial Statements December 31, 2017 Beginning Type of Properties for Sale

Balances

Additions

Disposals

December 31, 2016 Ending

Beginning

Ending

Balances

Balances

Additions

Disposals

Balances

Assets from debt repayment Immovable properties Appraised by external appraisers

34,387.27

4,498.03

6,882.90

32,002.40

29,363.28

11,677.83

6,653.84

34,387.27

Appraised by internal appraisers

2,399.19

1,896.99

105.49

4,190.69

846.42

1,628.89

76.12

2,399.19

276.85

250.05

290.46

236.44

318.75

575.10

617.00

276.85

37,063.31

6,645.07

7,278.85

36,429.53

30,528.45

13,881.82

7,346.96

37,063.31

42.31

26.31

-

68.62

46.19

-

3.88

42.31

454.06

826.01

454.06

826.01

422.08

454.06

422.08

454.06

37,559.68

7,497.39

7,732.91

37,324.16

30,996.72

14,335.88

7,772.92

37,559.68

(1.83)

(1,814.22)

(988.58)

(827.47)

7,731.08

35,509.94

30,008.14

13,508.41

Movable properties Total Others (closed branches) Properties for sale in transit Total Less Allowance for impairment

(1,816.05)

Properties for sale, net

35,743.63

7,497.39

7,772.92

(1,816.05) 35,743.63

(Million Baht) The Bank's Financial Statements December 31, 2017 Type of Properties for Sale Assets from debt repayment Immovable properties Appraised by external appraisers Appraised by internal appraisers

Movable properties Total Others (closed branches) Properties for sale in transit Total Less Allowance for impairment Properties for sale, net

Beginning Balances

Additions

34,387.27 2,399.19 110.60 36,897.06 42.31 454.06 37,393.43 (1,724.88) 35,668.55

4,498.03 1,896.99 6,395.02 26.31 826.01 7,247.34 7,247.34

Disposals

6,882.90 105.49 6,988.39 454.06 7,442.45 (12.90) 7,429.55

December 31, 2016 Ending Balances

Beginning Balances

Additions

32,002.40 4,190.69 110.60 36,303.69 68.62 826.01 37,198.32 (1,711.98) 35,486.34

29,363.28 846.42 110.60 30,320.30 46.19 422.08 30,788.57 (878.71) 29,909.86

11,677.83 1,628.89 13,306.72 454.06 13,760.78 (846.17) 12,914.61

Disposals

6,653.84 76.12 6,729.96 3.88 422.08 7,155.92 7,155.92

Ending Balances

34,387.27 2,399.19 110.60 36,897.06 42.31 454.06 37,393.43 (1,724.88) 35,668.55

As at December 31, 2017 and 2016, the Bank's allowance for impairment of properties for sale has decreased by Baht 12.90 million and increased by Baht 846.17 million, respectively, from reversal or additional of loss on impairment. For the years ended December 31, 2017 and 2016, the Bank generated gains on sale of properties for sale of Baht 896.18 million and Baht 1,023.03 million, respectively (before deduction of selling expenses of Baht 448.52 million and Baht 539.36 million, respectively).

(TRANSLATION)

59

7.10 Premises and Equipment, Net Premises and equipment As at December 31, 2017 and 2016 are as follows:

(Million Baht) Consolidated Financial Statements December 31, 2017 Cost

Accumulated Depreciation

Beginning

Additions /

Disposals /

Ending

Beginning

Balances

Transfer in

Transfer out

Balances

Balances

Depreciation

Allowance

Premises and

Ending

for

Equipment,

Disposals

Balances

Impairment

Net

Land

9,237.34

-

24.24

9,213.10

-

-

-

-

919.40

8,293.70

10,459.17

-

12.93

10,446.24

-

-

-

-

-

10,446.24

Premises

11,918.86

101.04

110.01

11,909.89

8,205.50

322.51

107.04

8,420.97

-

3,488.92

Equipment

22,037.26

996.62

1,136.22

21,897.66

17,711.98

1,637.46

918.55

18,430.89

-

3,466.77

946.50

168.58

226.26

888.82

449.59

120.83

5.38

565.04

-

323.78

54,599.13

1,266.24

1,509.66

54,355.71

26,367.07

2,080.80

1,030.97

27,416.90

Historical cost Revaluation Surplus *

Others Total

919.40

26,019.41

(Million Baht) Consolidated Financial Statements December 31, 2016 Cost

Accumulated Depreciation

Beginning

Additions /

Disposals /

Ending

Beginning

Balances

Transfer in

Transfer out

Balances

Balances

Depreciation

Allowance

Premises and

Ending

for

Equipment,

Disposals

Balances

Impairment

Net

Land Historical cost

9,179.93

57.41

Revaluation Surplus *

7,931.15

10,459.17

Premises

10,720.20

Equipment Others Total

-

9,237.34

-

-

-

-

919.40

8,317.94

7,931.15

10,459.17

-

-

-

-

-

10,459.17

1,212.88

14.22

11,918.86

7,342.93

876.16

13.59

8,205.50

-

3,713.36

24,713.36

1,543.36

4,219.46

22,037.26

17,579.19

2,083.08

1,950.29

17,711.98

-

4,325.28

354.90

873.43

281.83

946.50

525.50

75.91

449.59

-

496.91

52,899.54

14,146.25

12,446.66

54,599.13

3,484.74

2,039.79

26,367.07

24,922.12

919.40

27,312.66

(TRANSLATION)

60

7.10 Premises and Equipment, Net (Continued) (Million Baht) The Bank's Financial Statements December 31, 2017 Cost

Accumulated Depreciation

Beginning

Additions /

Disposals /

Ending

Beginning

Balances

Transfer in

Transfer out

Balances

Balances

Depreciation Disposals

Allowance

Premises and

Ending

for

Equipment,

Balances

Impairment

Net

Land

9,454.28

-

24.24

9,430.04

-

-

-

-

919.40

8,510.64

10,459.17

-

12.93

10,446.24

-

-

-

-

-

10,446.24

Premises

10,884.67

88.50

16.60

10,956.57

7,432.11

279.88

13.78

7,698.21

-

3,258.36

Equipment

12,752.72

481.22

328.42

12,905.52

10,361.57

837.44

198.69

11,000.32

-

1,905.20

850.84

59.80

52.23

858.41

449.59

120.83

5.38

565.04

-

293.37

44,401.68

629.52

434.42

44,596.78

18,243.27

1,238.15

217.85

19,263.57

Historical cost Revaluation Surplus *

Others Total

919.40

24,413.81

(Million Baht) The Bank's Financial Statements December 31, 2016 Cost

Accumulated Depreciation

Beginning

Additions /

Disposals /

Ending

Beginning

Balances

Transfer in

Transfer out

Balances

Balances

Depreciation Disposals

Allowance

Premises and

Ending

for

Equipment,

Balances

Impairment

Net

Land Historical cost

9,396.87

57.41

Revaluation Surplus *

7,931.15

10,459.17

Premises

9,696.54

Equipment Others Total

9,454.28

-

-

-

-

919.40

8,534.88

7,931.15

10,459.17

-

-

-

-

-

10,459.17

1,188.92

0.79

10,884.67

6,605.64

827.24

0.77

7,432.11

-

3,452.56

11,856.59

1,055.22

159.09

12,752.72

9,569.44

852.87

60.74

10,361.57

-

2,391.15

293.67

748.20

191.03

850.84

525.50

75.91

449.59

-

401.25

39,174.82

13,508.92

8,282.06

44,401.68

2,205.61

137.42

18,243.27

* The Bank revalues its land in 2016.

-

16,175.08

919.40

25,239.01

(TRANSLATION)

61

7.10 Premises and Equipment, Net (Continued) As at December 31, 2017 and 2016, the allowance for impairment is as follows: (Million Baht) December 31, 2017 December 31, 2016 Beginning balances Add Allowance for impairment Ending balances

919.40

1,622.89

-

(703.49)

919.40

919.40

7.11 Other Intangible Assets, Net (Million Baht) Consolidated Financial Statements December 31, 2017 Cost

Software licenses Other licenses Development cost

Accumulated Amortization

Beginning

Decrease/

Ending

Beginning

Decrease/

Balances

Additions Disposals

Balances

Balances

Additions Disposals

6,120.21

3,899.79

599.84

6,350.22

551.96

781.97

9.59

1.02

-

10.61

8.84

0.60

4,215.42

8.71

-

4,224.13

2,566.41

384.16

143.85

137.25

390.76

10,959.39

705.54

919.22

10,745.71

781.97

Allowance Intangible Ending

for

Assets,

Balances Impairment

Net

3,717.66

-

2,402.55

-

9.44

-

1.17

272.26

-

2,838.67

-

1,385.46

-

-

273.45

117.31

872.70

781.97

273.45

3,906.49

Partial payment of intangible assets Total

6,475.04

6,565.77

(Million Baht) Consolidated Financial Statements December 31, 2016 Cost

Software licenses Other licenses Development cost

Accumulated Amortization

Beginning

Decrease/

Ending

Beginning

Balances

Additions Disposals

Balances

Balances Additions Disposals

5,949.85

403.78

9.14

0.45

4,058.56

198.70

498.64 10,516.19

3.41

Decrease/

6,350.22

3,338.81

564.35

9.59

8.42

0.42

41.84

4,215.42

2,298.38

309.87

41.84

244.00

358.48

384.16

-

-

846.93

403.73

10,959.39

874.64

45.21

-

3.37 -

Allowance Intangible Ending

for

Assets,

Balances Impairment

Net

3,899.79

-

2,450.43

8.84

-

0.75

2,566.41

-

1,649.01

273.45

110.71

273.45

4,210.90

Partial payment of intangible assets Total

5,645.61

6,475.04

(TRANSLATION)

62

7.11 Other Intangible Assets, Net (Continued) (Million Baht)

Software licenses Other licenses Development cost Partial payment of intangible assets Total

Beginning Balances 803.94 5.12 738.10 62.74 1,609.90

Cost Decrease/ Additions Disposals 163.06 8.69 171.75

-

The Bank's Financial Statements December 31, 2017 Accumulated Amortization Intangible Ending Beginning Decrease/ Ending Assets, Balances Balances Additions Disposals Balances Net 967.00 459.20 86.01 545.21 421.79 5.12 4.95 0.02 4.97 0.15 738.10 275.03 61.08 336.11 401.99 71.43 1,781.65

739.18

147.11

-

886.29

71.43 895.36

(Million Baht)

Software licenses Other licenses Development cost Partial payment of intangible assets Total

Beginning Balances 732.70 5.12 779.94 26.70 1,544.46

The Bank's Financial Statements December 31, 2016 Cost Accumulated Amortization Intangible Decrease/ Ending Beginning Decrease/ Ending Assets, Additions Disposals Balances Balances Additions Disposals Balances Net 72.52 1.28 803.94 387.20 73.24 1.24 459.20 344.74 5.12 4.90 0.05 4.95 0.17 41.84 738.10 254.99 61.88 41.84 275.03 463.07 36.04 108.56

43.12

62.74 1,609.90

647.09

135.17

43.08

739.18

62.74 870.72

7.12 Deferred Tax Assets and Deferred Tax Liabilities Deferred tax assets and deferred tax liabilities As at December 31, 2017 and 2016 are as follows:

Deferred Tax Assets Deferred Tax Liabilities Net

(Million Baht) Consolidated Financial Statements The Bank's Financial Statements December 31, 2017 December 31, 2016 December 31, 2017 December 31, 2016 4,592.77 4,496.46 2,130.35 2,321.67 4,592.77 4,496.46 2,130.35 2,321.67

(TRANSLATION)

63

7.12 Deferred Tax Assets and Deferred Tax Liabilities (Continued) Movements in deferred tax assets and deferred tax liabilities during the period/year are as follows: (Million Baht) Consolidated Financial Statements Charged / credited to: Other Comprehensive January 1, 2017 Profit / Loss Income December 31, 2017 Deferred Tax Assets Investments Investments in subsidiaries and assoicates Loans to customers and accrued interest receivables, net Properties for sale Premises and equipment Provisions Guarantee deposit under financial lease Others Total Deferred Tax Liabilities Investments Premises and equipment Loans to customers and accrued interest receivables, net Others Total Net

463.44 159.75 3,628.12 363.21 205.75 2,843.72 51.03 1,263.79 8,978.81

(4.97) 0.74 246.39 (0.31) 7.01 57.77 (19.09) (212.33) 75.21

12.23 229.89 242.12

470.70 160.49 3,874.51 362.90 212.76 3,131.38 31.94 1,051.46 9,296.14

1,565.19 2,366.62 550.54 4,482.35 4,496.46

14.37 (79.03) (0.21) 0.17 (64.70) 139.91

288.30 (2.58) 285.72 (43.60)

1,867.86 2,285.01 550.33 0.17 4,703.37 4,592.77

(Million Baht) Consolidated Financial Statements Charged / credited to: Other Comprehensive January 1, 2016 Profit / Loss Income December 31, 2016 Deferred Tax Assets Investments Investments in subsidiaries and assoicates Loans to customers and accrued interest receivables, net Properties for sale Premises and equipment Provisions Guarantee deposit under financial lease Others Total Deferred Tax Liabilities Investments Premises and equipment Loans to customers and accrued interest receivables, net Total Net

570.34 159.75 3,665.58 198.61 363.09 4,138.61 51.37 542.55 9,689.90

(36.54) (37.46) 164.60 (157.34) (1,482.21) (0.34) 721.24 (828.05)

(70.36) 187.32 116.96

463.44 159.75 3,628.12 363.21 205.75 2,843.72 51.03 1,263.79 8,978.81

291.63 1,812.76 589.40 2,693.79 6,996.11

(0.96) 48.26 (38.86) 8.44 (836.49)

1,274.52 505.60 1,780.12 (1,663.16)

1,565.19 2,366.62 550.54 4,482.35 4,496.46

(TRANSLATION)

64

7.12 Deferred Tax Assets and Deferred Tax Liabilities (Continued) (Million Baht)

January 1, 2017 Deferred Tax Assets Investments Investments in subsidiaries and assoicates Loans to customers and accrued interest receivables, net Properties for sale Premises and equipment Provisions Others Total Deferred Tax Liabilities Investments Premises and equipment Total Net

463.44 159.75 1,742.37 344.97 183.88 2,167.67 1,191.40 6,253.48

(4.97) 0.74 109.03 (2.58) 23.68 (209.42) (83.52)

12.23 224.90 237.13

470.70 160.49 1,851.40 342.39 183.88 2,416.25 981.98 6,407.09

1,565.19 2,366.62 3,931.81 2,321.67

14.37 44.84 59.21 (142.73)

288.30 (2.58) 285.72 (48.59)

1,867.86 2,408.88 4,276.74 2,130.35

January 1, 2016 Deferred Tax Assets Investments Investments in subsidiaries and assoicates Loans to customers and accrued interest receivables, net Properties for sale Premises and equipment Provisions Others Total Deferred Tax Liabilities Investments Premises and equipment Total Net

The Bank's Financial Statements Charged / credited to: Other Comprehensive Profit / Loss Income December 31, 2017

(Million Baht) The Bank's Financial Statements Charged / credited to: Other Comprehensive Profit / Loss Income December 31, 2016

570.34 159.75 1,896.89 175.74 324.58 3,523.60 471.58 7,122.48

(36.54) (154.52) 169.23 (140.70) (1,525.87) 719.82 (968.58)

(70.36) 169.94 99.58

463.44 159.75 1,742.37 344.97 183.88 2,167.67 1,191.40 6,253.48

291.63 1,810.27 2,101.90 5,020.58

(0.96) 50.75 49.79 (1,018.37)

1,274.52 505.60 1,780.12 (1,680.54)

1,565.19 2,366.62 3,931.81 2,321.67

(TRANSLATION)

65

7.13 Other Assets, Net

Prepaid expenses Account receivables - Revenue Department Leaseholds Suspense account debtors Collateral under Credit Support Annex Contract and Cash Margin Debtors Interbranch transactions Settlement account between the Bank and other financial institutions Sundry assets Total Less Allowance for impairment Total other assets, net

(Million Baht) The Bank's Financial Statements December 31, 2017 December 31, 2016 996.89 801.04 3.41 31.44 79.78 97.05 3,345.30 2,995.84

Consolidated Financial Statements December 31, 2017 December 31, 2016 1,207.20 995.99 1,681.74 1,557.49 79.78 97.05 3,354.47 3,003.57 3,918.35 -

5,763.60 2,632.19

3,918.35 -

5,763.60 2,632.19

1,576.82 9,480.09 21,298.45 (2,495.72) 18,802.73

520.31 6,533.02 21,103.22 (2,394.04) 18,709.18

1,576.82 9,618.75 19,539.30 (2,456.31) 17,082.99

520.31 6,464.78 19,306.25 (2,361.14) 16,945.11

As at December 31, 2017 and 2016, sundry assets are included default debtors from convertible preferred shares contracts of Baht 997.87 million with the same amounts of allowance for impairment (Note 7.37.1). 7.14 Deposits 7.14.1 Classified by Type of Deposits

Demand deposits Savings deposits Time deposits Total

Consolidated Financial Statements December 31, 2017 December 31, 2016 95,462.41 92,573.87 1,387,164.71 1,221,291.66 588,247.56 658,538.00 2,070,874.68 1,972,403.53

(Million Baht) The Bank's Financial Statements December 31, 2017 December 31, 2016 96,317.51 92,938.84 1,388,420.83 1,223,083.61 588,855.67 659,135.22 2,073,594.01 1,975,157.67

7.14.2 Classified by Currency and Residence of Depositors (Million Baht) Consolidated Financial Statements

Thai Baht US Dollar Other currencies Total

December 31, 2017 Domestic Foreign 2,011,185.44 12,909.23 34,310.68 7,282.32 2,401.03 2,785.98 2,047,897.15 22,977.53

Total 2,024,094.67 41,593.00 5,187.01 2,070,874.68

December 31, 2016 Domestic Foreign 1,915,115.62 12,614.53 29,266.68 8,508.15 4,102.08 2,796.47 1,948,484.38 23,919.15

Total 1,927,730.15 37,774.83 6,898.55 1,972,403.53

(TRANSLATION)

66

7.14 Deposits (Continued) 7.14.2 Classified by Currency and Residence of Depositors (Continued) (Million Baht) The Bank's Financial Statements

Thai Baht US Dollar Other currencies Total

December 31, 2017 Domestic Foreign 2,013,904.77 12,909.23 34,310.68 7,282.32 2,401.03 2,785.98 2,050,616.48 22,977.53

Total 2,026,814.00 41,593.00 5,187.01 2,073,594.01

December 31, 2016 Domestic Foreign 1,917,869.76 12,614.53 29,266.68 8,508.15 4,102.08 2,796.47 1,951,238.52 23,919.15

Total 1,930,484.29 37,774.83 6,898.55 1,975,157.67

7.15 Interbank and Money Market Items (Liabilities) (Million Baht) Consolidated Financial Statements December 31, 2017 December 31, 2016 Demand Time Total Demand Time

Total

7.15.1 Domestic Items Bank of Thailand and Financial Institutions Development Fund Commercial banks Special purpose financial institutions Other financial institutions Total domestic items

983.11 331.51 612.06 26,691.17 28,617.85

31,679.38 106,564.88 18,015.92 34,322.74 190,582.92

32,662.49 106,896.39 18,627.98 61,013.91 219,200.77

673.39 239.67 454.40 24,597.01 25,964.47

45,890.96 80,448.42 18,445.28 37,016.47 181,801.13

46,564.35 80,688.09 18,899.68 61,613.48 207,765.60

398.25 143.98 157.23 699.46 29,317.31

8,791.16 8,791.16 199,374.08

9,189.41 143.98 157.23 9,490.62 228,691.39

932.85 154.81 128.80 1,216.46 27,180.93

2,189.25 2,189.25 183,990.38

3,122.10 154.81 128.80 3,405.71 211,171.31

7.15.2 Foreign Items US Dollar Euro Other currencies Total foreign items Total domestic and foreign items

(Million Baht) The Bank's Financial Statements December 31, 2017 December 31, 2016 Demand Time Total Demand Time

Total

7.15.1 Domestic Items Bank of Thailand and Financial Institutions Development Fund Commercial banks Special purpose financial institutions Other financial institutions Total domestic items

983.11 331.51 612.06 27,131.24 29,057.92

31,679.38 97,900.10 17,015.92 33,922.81 180,518.21

32,662.49 98,231.61 17,627.98 61,054.05 209,576.13

673.39 239.67 454.40 24,786.87 26,154.33

45,890.96 76,000.09 18,095.28 32,169.63 172,155.96

46,564.35 76,239.76 18,549.68 56,956.50 198,310.29

398.25 143.98 157.23 699.46 29,757.38

8,791.16 8,791.16 189,309.37

9,189.41 143.98 157.23 9,490.62 219,066.75

932.85 154.81 128.80 1,216.46 27,370.79

2,189.25 2,189.25 174,345.21

3,122.10 154.81 128.80 3,405.71 201,716.00

7.15.2 Foreign Items US Dollar Euro Other currencies Total foreign items Total domestic and foreign items

(TRANSLATION)

67

7.16 Debt Issued and Borrowings Classified by type of debts and sources of fund as follows: (Million Baht) Consolidated Financial Statements December 31, 2017

December 31, 2016

Interest

Maturity

Currency

Rate (%)

Date

2013

Baht

5.00

2018

800.00

2013 (EMTN Programme)

USD

2.25

2018

-

2014

Baht

3.80-4.30

2018

4,300.00

-

4,300.00

8,230.00

-

8,230.00

2015

Baht

2.54-4.00

2018-2025

8,755.00

-

8,755.00

9,393.00

-

9,393.00

2016

Baht

1.88-4.00

2018-2026

18,000.00

-

18,000.00

18,000.00

-

18,000.00

2017

Baht

2.46-3.80

2022-2027

11,500.00

-

11,500.00

No.1/2012

Baht

4.50

2022

-

-

-

5,155.00

-

5,155.00

No.2/2012

Baht

4.60

2022

-

-

-

15,133.32

-

15,133.32

No.1/2014 (EMTN Programme)

USD

5.20

2024

-

22,876.63

22,876.63

-

25,081.46

25,081.46

No.1/2015

MYR

5.10

2025

-

8,058.40

8,058.40

-

7,989.60

7,989.60

No.1/2017

Baht

3.40

2027

20,000.00

-

20,000.00

-

-

-

Baht

-

2012

0.70

-

0.70

0.70

-

0.70

110,626.43

61,712.02

Domestic

Foreign

Total

Domestic

Foreign

Total

Long term bonds -

800.00

16,335.70

16,335.70

5,800.00

-

-

5,800.00

17,902.78

-

17,902.78

-

-

KTB subordinated debentures

Bill of exchange (B/E) Short term* Total

63,355.70

47,270.73

50,973.84

112,685.86

(Million Baht) The Bank's Financial Statements December 31, 2017

December 31, 2016

Interest

Maturity

Currency

Rate (%)

Date

Domestic

USD

2.25

2018

-

No.1/2012

Baht

4.50

2022

-

-

-

5,155.00

-

5,155.00

No.2/2012

Baht

4.60

2022

-

-

-

15,133.32

-

15,133.32

No.1/2014 (EMTN Programme)

USD

5.20

2024

-

22,876.63

22,876.63

-

25,081.46

25,081.46

No.1/2015

MYR

5.10

2025

-

8,058.40

8,058.40

-

7,989.60

7,989.60

No.1/2017

Baht

3.40

2027

20,000.00

-

20,000.00

-

-

-

Baht

-

2012

0.70

-

0.70

0.70

-

0.70

67,271.43

20,289.02

Foreign

Total

Domestic

16,335.70

16,335.70

Foreign

Total

17,902.78

17,902.78

Long term bonds 2013 (EMTN Programme)

-

KTB subordinated debentures

Bill of exchange (B/E) Short term* Total

20,000.70

47,270.73

*Short term bill of exchange (B/E) is a maturity but its holder is still not redeemable.

50,973.84

71,262.86

(TRANSLATION)

68

7.16 Debt Issued and Borrowings Classified by type of debts and sources of fund (Continued) Bonds under Euro Medium Term Note Programme (EMTN Programme) in an amount of USD 2,500 Million On March 11, 2013, the Bank issued USD 500 million of unsecured unsubordinated debentures, with a maturity of 5.5 years at a fixed coupon of 2.25 percent per annum. The interest payment is semiannually on 11 st of March and September of each year, over the time to maturity. On June 26, 2014, the Bank issued and offered USD 700 million of subordinated debentures in accordance with Basel III (Subordinated Tier 2), with a maturity of 10.5 years at a fixed coupon of 5.20 percent per annum for the first 5.5 years. After that the interest will equal to 5-years US Treasury Rate plus margin 3.535 percent per annum. The interest payment is semiannually on 26th of June and December of each year, over the time to maturity. Subordinated Debentures under Malaysian Ringgit Medium Term Note Programme in an amount of MYR 5,000 Million On July 6, 2015, the Bank issued and offered MYR 1,000 million of subordinated debentures in accordance with Basel III (Subordinated Tier 2), with a maturity of 10 years at a coupon of 5.10 percent per annum. The Bank may be granted the right to redeem the debentures prior to their maturities, on 5th anniversary of the issued date. Subordinated Debentures The Bank has issued subordinated debentures No. 1/2560 totaling of Baht 20,000 million with 20 million units, 1,000 Baht per value and a fixed coupon of 3.40 percent per annum. The coupon payments are made quarterly until maturity in 2027(B.E.2570). The debentures are redeemable at the instance of the issuer after the 5 th years of the debenture or thereafter without holder’s consent, within the scope of conditions. Redemption of Subordinated Debentures The Bank may be granted the right to redeem the debentures prior to their maturities, on 5 th anniversary of the issued date or on any interest-payment date after 5th anniversary date, except for subordinated debentures under EMTN Programme which can be redeemed prior to their maturities, on 5.5th anniversary of the issued date or on any interest-payment date after 5.5th anniversary date. 7.17 Provisions (Million Baht)

Provisions for employee benefits

Consolidated Financial Statements

The Bank's Financial Statements

December 31, 2017 December 31, 2016

December 31, 2017 December 31, 2016

11,947.70

10,776.99

10,859.40

9,795.64

Provisions for Litigations

518.85

335.91

518.85

335.91

Other provisions

159.12

39.38

146.32

31.87

12,625.67

11,152.28

11,524.57

10,163.42

Total provisions

(TRANSLATION)

69

7.17 Provisions (Continued) Provisions for Employee Benefits Consolidated Financial Statements December 31, 2017 December 31, 2016 Provisions for employee benefits Beginning balances Current service costs Interest costs Employee benefits paid during the period Actuarial losses (gains) on defined benefit plans (Note 7.34) - from changes in demographic assumptions - from changes in financial assumptions Total provisions for employee benefits

(Million Baht) The Bank's Financial Statements December 31, 2017 December 31, 2016

10,776.99 608.26 420.53 (1,007.55)

10,391.04 565.65 496.46 (1,612.77)

9,795.64 506.27 383.64 (950.66)

9,609.72 465.14 457.63 (1,586.55)

(13.06) 1,162.53 11,947.70

(4.76) 941.37 10,776.99

(28.82) 1,153.33 10,859.40

(14.74) 864.44 9,795.64

The Principal Actuarial Assumptions December 31, 2017 December 31, 2016 Average discount rate

2.50% - 4.03%

2.75% - 4.34%

Average future salary increase rate

4.00% - 7.50%

4.00% - 7.50%

0.10% - 26.27%

0.11% - 30.00%

55 - 60 Years

55 - 60 Years

Average turnover rate Retirement age

Sensitivity Analysis of Principal Actuarial Assumptions Defined benefit plan of the Bank and its subsidiaries are sensitive to changes in assumptions used for calculation. The actuarial assumptions may change based on changes in market conditions, changed in inflation condition including demographic changes in the defined benefit plan. The following table shows the effect of changes in each key assumption. The change in each assumption occurs separately. (Million Baht) Increase (Decrease) in Defined Benefit Plan Consolidated Financial Statements The Bank's Financial Statements December 31, 2017 December 31, 2016 December 31, 2017 December 31, 2016 Average discount rate Increase of 1 % Decrease of 1 % Average future salary increase rate Increase of 1 % Decrease of 1 % Average turnover rate Increase of 1 % Decrease of 1 %

(1,216.67) 1,454.82

(1,008.35) 1,182.41

(1,091.60) 1,305.09

(890.52) 1,041.66

1,119.29 (959.60)

870.09 (761.55)

993.52 (849.49)

751.62 (658.15)

(137.92) 145.35

(120.43) 121.57

(111.83) 111.83

(99.86) 99.86

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7.17 Provisions (Continued) Maturity Profile of Defined Benefit Plan The following table provides information on the weighted average duration of the defined benefit plan and the maturity analysis of benefit payments calculated based on the defined benefit plan expected to be paid in the future in the undiscounted form. (Years) Consolidated Financial Statements December 31, 2017 Weighted average duration of the defined benefit plan

The Bank's Financial Statements

December 31, 2016

23

21

December 31, 2017

December 31, 2016

22

20 (Million Baht)

December 31, 2017

December 31, 2016

December 31, 2017

December 31, 2016

Maturity analysis of benefits expected to be paid Amount expected to be paid within 12 months

531.08

594.24

489.03

568.12

Amount expected to be paid between 1 to 2 years

586.87

535.90

543.84

499.08

Amount expected to be paid between 2 to 5 years

2,686.83

2,528.36

2,496.87

2,381.31

Amount expected to be paid between 5 to 10 years

6,646.06

6,365.81

6,125.71

5,884.33

Amount expected to be paid between 10 to 15 years

5,983.73

6,183.08

5,135.56

5,355.01

Amount expected to be paid between 15 to 25 years

10,425.51

8,419.47

7,713.35

5,540.87

Amount expected to be paid over 25 years

25,330.92

16,086.32

23,757.06

14,378.20

Provisions for Litigations (Million Baht) Consolidated Financial Statements

The Bank's Financial Statements

December 31, 2017 December 31, 2016

December 31, 2017 December 31, 2016

Provisions for Litigations Beginning balance

335.91

538.01

335.91

538.01

Increase (decrease)

182.94

(202.10)

182.94

(202.10)

Ending balance

518.85

335.91

518.85

335.91

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7.17 Provisions (Continued) Other Provisions (Million Baht) Consolidated Financial Statements

The Bank's Financial Statements

December 31, 2017 December 31, 2016

December 31, 2017 December 31, 2016

Other provisions Beginning balance

39.38

34.16

31.87

25.53

Increase

119.74

5.22

114.45

6.34

Ending balance

159.12

39.38

146.32

31.87

7.18 Other Liabilities comprise the followings: (Million Baht)

Accrued interest expenses Accrued expenses Interbranch account

Consolidated Financial Statements

The Bank's Financial Statements

December 31, 2017 December 31, 2016

December 31, 2017 December 31, 2016

3,734.98

4,125.33

3,443.08

3,849.37

11,760.42

14,339.86

10,011.39

12,663.39

832.16

-

832.16

-

Suspense account creditors

3,495.95

2,955.41

5,064.80

4,148.10

Tax payables

2,730.09

3,132.80

1,965.53

2,510.59

Deferred revenue for reward points

2,558.54

2,640.55

-

152.82

Interbank account

812.09

-

812.09

-

Advanced account

198.34

186.36

198.34

186.36

Cheque in transit

5,289.95

5,020.70

5,289.95

5,020.70

Sundry liabilities Total

11,509.60

12,417.91

8,128.55

9,445.10

42,922.12

44,818.92

35,745.89

37,976.43

7.19 Share Capital 7.19.1 Ordinary Shares As at December 31, 2017 and 2016, the Bank’s authorized share capital and issued and paid-up share capital are 13,976,061,250 shares. 7.19.2 Preferred Shares The 5.5 million of preferred shares are fully paid-up. Preferred share has more preference over the ordinary share. Apart from entitling to the same voting rights and claims on dividends as ordinary shares, it may enjoy preferential rights to a special dividend at a 3 percent fixed rate per annum prior to the ordinary shares when paid. 7.19.3 The Bank is the state enterprise; its major shareholder is the Financial Institutions Development Fund (FIDF). As at December 31, 2017, FIDF holds 7,696,248,833 shares or 55.05 percent of paid-up ordinary and preferred shares.

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7.20 Legal Reserve According to the Public Limited Company Act, the Bank is required to appropriate net profit of the year as legal reserve which is not less than 5 percent after deducting accumulated losses brought forward (if any) until legal reserve reaches an amount not less than 10 percent of authorized share capital. The Bank also set aside full amount of legal reserve. 7.21 The Appropriation of 2016 Net Profit and Dividend Payment On April 28, 2017, the 24th Annual General Shareholders’ Meeting passed the resolution to approve the appropriation of 2016 net profit of Baht 29,967.79 million. On April 29, 2016, the 23rd Annual General Shareholders’ Meeting passed the resolution to approve the appropriation of 2015 net profit of Baht 26,473.75 million and dividend payment as follows: (Million Baht) Net Profit of 2016

Net Profit of 2015

5.58

5.03

Dividend - ordinary shares (@ Baht 0.86 and Baht 0.76)

12,019.41

10,621.81

Net profit carried forward

17,942.80

15,846.91

Dividend - preferred shares (@ Baht 1.0145 and Baht 0.9145)

7.22 Obligations and Contingent Liabilities 7.22.1 Contingent Liabilities (Million Baht) Consolidated and the Bank's Financial Statements December 31, 2017

December 31, 2016

Avals to bills

8,062.96

8,111.97

Guarantees of loans

4,011.56

4,011.03

Liability under unmatured import bills

4,368.59

4,756.16

50,125.01

40,407.40

Unused credit line of overdraft

155,394.32

156,429.94

Other guarantees

168,116.68

156,273.58

390,079.12

369,990.08

Letters of credit Other contingencies

Total

Besides the contingent liabilities mentioned above, As at December 31, 2017 and 2016, the Bank has material contingent liabilities owing to prosecutions of Baht 9,011.62 million and Baht 6,962.26 million, respectively. Such prosecutions comprised of the completed cases in the civil court and the cases proceedings in the Appeal Court and the Supreme Court. As at December 31, 2017 and 2016, the Bank has set aside provisions of Baht 518.85 million and Baht 335.91 million, respectively, for estimated losses from such cases.

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7.22 Obligations and Contingent Liabilities (Continued) 7.22.2 Obligations under Long-Terms Leased The Bank has obligations arising from lease agreements. The amounts due are classified as follows: (Million Baht) Consolidated Financial Statements December 31, 2017 Period Land and/or Premises Vehicles Others Total

December 31, 2016

Within 1 year Over 1 to 5 years Over 5 years

814.08 402.22 54.15 1,270.45

926.51 652.66 32.94 1,612.11

57.41 57.41

Total

1,798.00 1,054.88 87.09 2,939.97

Within 1 year Over 1 to 5 years Over 5 years

710.91 425.32 137.93 1,274.16

570.78 748.58 43.92 1,363.28

60.37 60.37

Total

1,342.06 1,173.90 181.85 2,697.81 (Million Baht)

The Bank's Financial Statements December 31, 2017 Period

December 31, 2016

Within 1 year Over 1 to 5 years Over 5 years

Total

Within 1 year Over 1 to 5 years Over 5 years

Total

Land and/or Premises

568.90

557.36

57.41

1,183.67

560.25

480.54

60.37

1,101.16

Vehicles

355.69

582.52

-

938.21

374.79

671.74

-

1,046.53

Others Total

3.58

1.06

-

4.64

0.62

1.13

-

1.75

928.17

1,140.94

2,126.52

935.66

1,153.41

57.41

60.37

2,149.44

7.23 Assets with Obligations and Restrictions (Million Baht) Consolidated and the Bank's Financial Statements December 31, 2017 December 31, 2016 Government and state enterprise bonds pledged as collateral Court collateral Repurchase agreements Properties for sale (debtor is granted the right to buy back or first right for this portion) Total

413.76 36,209.98 12,453.51 49,077.25

102.65 58,139.64 12,911.62 71,153.91

7.24 Related Party Transactions 7.24.1 As at December 31, 2017 and 2016, loans to the Bank's executives (First Vice President and above) are Baht 134.96 million and Baht 106.35 million. The average outstanding balances of such loans at month end are Baht 119.47 million and Baht 98.12 million, respectively. The loans outstanding As at December 31, 2017 and 2016 to close family of the Bank's executives mentioned above are Baht 18.90 million and Baht 29.51 million, respectively.

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7.24 Related Party Transactions (Continued) 7.24.2 Loans and Obligations The balances of loans and obligations to related companies, normal bank pricing policies, As at December 31, 2017 and 2016 are as follows: (Million Baht) Consolidated Financial Statements The Bank's Financial Statements December 31, 2017 December 31, 2016 December 31, 2017 December 31, 2016 Loans Related parties which the Bank totally held from 10 to 20 percent of their paid-up capital Related partie which the Bank acquired equal to or over 10 percent of their paid-up capital from TDR Subsidiaries KTB General Services and Security Co., Ltd. KTB Computer Services Co., Ltd. KTB Leasing Co., Ltd. Krung Thai Asset Management Pcl. Krungthai Card Pcl. Less Allowance for doubtful accounts Total Associates Krung Thai IBJ Leasing Co., Ltd. KT Zmico Securities Co., Ltd. Krungthai Panich Insurance Pcl. Less Allowance for doubtful accounts Total Other parties related with directors or key managements Less Allowance for doubtful accounts Total Obligations Related parties which the Bank totally held from 10 to 20 percent of their paid-up capital Related parties which the Bank acquired equal to or over 10 percent of their paid-up capital from TDR Subsidiaries KTB General Services and Security Co., Ltd. KTB Computer Services Co., Ltd. KTB Leasing Co., Ltd. Krungthai Card Pcl. Associates Krung Thai IBJ Leasing Co., Ltd. Krungthai Panich Insurance Pcl. Other parties related with directors or key managements

0.51

0.43

0.51

0.43

28.93

106.39

28.93

106.39

-

-

10.16 2,486.61 20,726.91 0.04 0.63 (232.24) 22,992.11

9.09 3,080.72 36,815.11 0.05 0.66 (399.06) 39,506.57

0.10 955.20 0.68 (9.56) 946.42 22,082.24 (220.17) 21,862.07

0.09 2,568.94 0.63 (25.70) 2,543.96 5,017.89 (45.32) 4,972.57

0.10 955.20 0.68 (9.56) 946.42 22,082.24 (220.17) 21,862.07

0.09 2,568.94 0.63 (25.70) 2,543.96 5,017.89 (45.32) 4,972.57

12.32

14.30

12.32

14.30

0.96

0.29

0.96

0.29

-

-

0.78 4.55 1.18 2.13

43.40 4.55 1,061.20 2.29

3.72 5.00 8,375.97

3.30 4,191.87

3.72 5.00 8,375.97

3.30 4,191.87

(TRANSLATION)

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7.24 Related Party Transactions (Continued) 7.24.3 Deposits and Borrowings The balances of deposits and borrowings to related companies, normal bank pricing policies, As at December 31, 2017 and 2016 are as follows: (Million Baht) Consolidated Financial Statements

The Bank's Financial Statements

December 31, 2017 December 31, 2016 December 31, 2017 December 31, 2016 Deposits Subsidiaries KTB Law Co., Ltd.

-

-

472.88

549.52

KTB General Services and Security Co., Ltd.

-

-

601.70

677.24

KTB Computer Services Co., Ltd.

-

-

307.62

177.22

KTB Leasing Co., Ltd.

-

-

218.27

274.78

Krung Thai Asset Management Pcl.,

-

-

440.07

189.86

KTB Capital Holding Co., Ltd.

-

-

-

252.86

KTB Advisory Co., Ltd.

-

-

36.82

36.89

Krungthai Card Pcl.

-

-

1,082.04

785.63

Krung Thai IBJ Leasing Co., Ltd.

21.15

23.26

21.15

23.26

KT Zmico Securities Co., Ltd.

25.65

36.24

25.65

36.24

Krungthai Panich Insurance Pcl.

183.11

42.36

183.11

42.36

2,105.84

1,627.83

2,105.84

1,627.83

25,557.49

24,522.80

25,557.49

24,522.80

3,800.00

3,250.00

3,800.00

3,250.00

Associates

Krungthai-AXA Life Insurance Pcl. Other parties related with directors or key managements Borrowings Associates Krungthai-AXA Life Insurance Pcl.

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7.24 Related Party Transactions (Continued) 7.24.4 Income and Expenses The Bank and its subsidiaries have significant income and expenses with related parties as follows: (Million Baht) Consolidated Financial Statements The Bank's Financial Statements December 31, 2017 December 31, 2016 December 31, 2017 December 31, 2016 Interest Income Subsidiaries KTB Computer Services Co., Ltd. KTB Leasing Co., Ltd. Krungthai Card Pcl. Associates KT Zmico Securities Co., Ltd. Interest Expenses Subsidiaries KTB Law Co., Ltd. KTB General Services and Security Co., Ltd. KTB Computer Services Co., Ltd. KTB Leasing Co., Ltd. Krung Thai Asset Management Pcl. KTB Capital Holding Co., Ltd. KTB Advisory Co., Ltd. Krungthai Card Pcl. Associates KT Zmico Securities Co., Ltd. Krungthai Panich Insurance Pcl. Krungthai-AXA Life Insurance Pcl. Dividend Income Subsidiaries KTB Law Co., Ltd. KTB General Services and Security Co., Ltd. KTB Computer Services Co., Ltd. Krung Thai Asset Management Pcl. KTB Advisory Co., Ltd. Krungthai Card Pcl. Associates Krung Thai IBJ Leasing Co., Ltd. KT Zmico Securities Co., Ltd. Krungthai Panich Insurance Pcl. Krungthai-AXA Life Insurance Pcl. National ITMX Co., Ltd.

-

-

80.05 859.28 17.93

140.93 1,408.15 15.52

39.97

30.80

39.97

30.80

-

-

3.74 5.04 0.69 5.16 1.16 0.14 2.19

2.10 5.05 0.51 0.90 0.44 0.94 0.17 2.41

0.08 0.88 164.75

5.44 1.01 141.55

0.08 0.88 164.75

5.44 1.01 141.55

-

-

19.00 203.00 27.30 232.00 510.00

15.00 205.80 13.00 205.00 20.00 414.38

39.05 158.40 1,825.00 6.19

34.20 138.63 158.40 1,875.00 -

39.05 158.40 1,825.00 6.19

34.20 138.63 158.40 1,875.00 -

(TRANSLATION)

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7.24 Related Party Transactions (Continued) 7.24.4 Income and Expenses (Continued) (Million Baht) Consolidated Financial Statements The Bank's Financial Statements December 31, 2017 December 31, 2016 December 31, 2017 December 31, 2016 Other Income Subsidiaries KTB Law Co., Ltd. KTB General Services and Security Co., Ltd. KTB Computer Services Co., Ltd. KTB Leasing Co., Ltd. Krung Thai Asset Management Pcl. KTB Advisory Co., Ltd. Krungthai Card Pcl. Associates KT Zmico Securities Co., Ltd. Krungthai Panich Insurance Pcl. Krungthai-AXA Life Insurance Pcl. National ITMX Co., Ltd. Other Expenses Subsidiaries KTB Law Co., Ltd. KTB General Services and Security Co., Ltd. KTB Computer Services Co., Ltd. KTB Leasing Co., Ltd. Krungthai Card Pcl. Associates Krung Thai IBJ Leasing Co., Ltd. KT Zmico Securities Co., Ltd. National ITMX Co., Ltd.

21.71 169.09 2,263.91 0.09

40.92 0.22 1,739.05 0.12

0.15 5.66 0.16 26.24 473.91 307.48

0.21 4.40 0.16 38.28 301.78 0.01 240.29

21.71 169.09 2,263.91 0.09

40.92 0.22 1,739.05 0.12

-

-

1,018.56 2,286.08 3,384.18 6.18

995.00 2,379.83 3,484.36 117.22 22.08

211.05 2.35 91.98

150.42 1.74 89.66

211.05 2.35 91.98

150.42 1.74 89.66

7.24.5 The Bank has no compensations or other benefits, both monetary and non-monetary, to directors and executives except ordinary benefits as follows:

Short-term employee benefits Post-employment benefits Total

Consolidated Financial Statements December 31, 2017 December 31, 2016 1,118.00 1,078.36 28.52 35.00 1,146.52 1,113.36

(Million Baht) The Bank's Financial Statements December 31, 2017 December 31, 2016 752.46 710.59 13.29 14.28 765.75 724.87

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7.24 Related Party Transactions (Continued) 7.24.6 Intercompany Trading Transactions Subsidiaries 1) KTB Computer Services Co., Ltd. has been designated mainly to provide information technology (IT) services to various work units in the Bank. Service offers consist of introducing IT to the Bank's business operation and modernizing the existing systems in line with the Bank's requirement, rendering system control and maintenance system software development, offering preliminary consultancy service and organizing training in various applications of IT and techniques. The Bank incurs service charges on a cost plus method for the years ended December 31, 2017 and 2016 of Baht 3,256.50 million and Baht 3,361.60 million, respectively. Since 2003, the GFMIS project Phase 2 has been developed and implemented on behalf of the Bank by KTBCS. The Bank and the Office of GFMIS attached to the Secretariat of the Prime Minister have unanimously signed on the Memorandum of Agreement upon the submission of deliverables and disbursement associated to the investments on the GFMIS project on September 22, 2005. Further, the Bank has signed the hiring contract for the implementation and maintenance with the Office of GFMIS. The Bank incurs service charges for the years ended December 31, 2017 and 2016 of Baht 127.68 million and Baht 122.76 million, respectively. 2) The Bank has operated student loans in subjects of public relations, policy, regulation, loan payment, documents filling, loan notification, loans status, including loan collection, claim for payment, and prosecution for the Student Loans Fund. KTB Law Co., Ltd. has been designated to prosecute debtors of the Student Loans Fund. The Bank incurs service charges for the years ended December 31, 2017 and 2016 of Baht 892.03 million and Baht 887.01 million, respectively. 3) KTB General Services and Security Co., Ltd. (KTBGS) is assigned by the Bank to operate all receive-delivery cash, foreign bank notes, foreign and financial instruments, and the Bank’s asset. KTBGS also manages Krung Thai Bank Training Center and the Bank’s other buildings. The Bank’ s expense from those services for the years ended December 31, 2017 and 2016 of Baht 2,286.08 million and Baht 2,379.53 million, respectively. 4) The Bank incurs service charges for sourcing and installing EDC machines for foreign exchange service to Krungthai Card Pcl. for the year ended December 31, 2017 of Baht 0.16 million. 5) The Bank incurs service charges on its subsidiaries [including service charges mentioned in No.1) to 4)] for the years ended December 31, 2017 and 2016 of Baht 6,695.00 million and Baht 6,980.25 million, respectively, at the agreed-upon rate. 6) The Bank generates fees income from service contracts for the years ended December 31, 2017 and 2016 of Baht 667.98 million and Baht 561.69 million, respectively. 7) The Bank generates premises rental income from subsidiaries for the years ended December 31, 2017 and 2016 of Baht 15.94 million and Baht 15.93 million, respectively, at the agreed-upon rate. Intercompany Considerations Intercompany income and expenses are based on the agreed-upon rate and the amount specified in the contract, whereas cost plus system has been applicable to some certain transactions. The consolidated financial statements include the accounts of subsidiaries after eliminating intercompany transactions and balances. Associates 1) The Bank generates premises rental income from associates for the years ended December 31, 2017 and 2016 at the amount of Baht 0.63 million at the agreed-upon rate. 2) The Bank generates fees income from supportive service contracts for the years ended December 31, 2017 and 2016 of Baht 2,363.06 million and Baht 1,741.43 million, respectively, at the agreed-upon rate.

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7.25 Significant Financial Position and Operations Classified by Domestic and Foreign Business Segment 7.25.1 Financial Position Classified by Business Segment (Million Baht) Consolidated Financial Statements

Total assets Interbank and money market items, net Investments, net* Loans to customers and accrued interest receivables, net Deposits Interbank and money market items, net Debt issued and borrowings

December 31, 2017 Domestic Foreign Branches Business Business Segment Segment Total 2,804,573.24 55,231.82 2,859,805.06 529,284.84 20,384.69 549,669.53 226,479.52 1,760.24 228,239.76

December 31, 2016 Domestic Foreign Branches Business Business Segment Segment 2,629,299.92 64,197.67 400,746.90 30,891.51 240,951.98 1,570.93

Total 2,693,497.59 431,638.41 242,522.91

1,790,762.28 2,065,458.14 227,074.21 63,355.70

1,767,185.68 1,966,527.15 208,966.02 61,712.02

1,798,578.14 1,972,403.53 211,171.31 112,685.86

27,149.99 5,416.54 1,617.19 47,270.73

1,817,912.27 2,070,874.68 228,691.40 110,626.43

31,392.46 5,876.38 2,205.29 50,973.84

(Million Baht) The Bank's Financial Statements

Total assets Interbank and money market items, net Investments, net* Loans to customers and accrued interest receivables, net Deposits Interbank and money market items, net Debt issued and borrowings

December 31, 2017 Domestic Foreign Branches Business Business Segment Segment Total 2,721,945.80 55,231.82 2,777,177.62 528,795.34 20,384.69 549,180.03 218,249.60 1,760.24 220,009.84

December 31, 2016 Domestic Foreign Branches Business Business Segment Segment 2,554,394.51 64,197.67 400,458.70 30,891.51 235,786.81 1,570.93

Total 2,618,592.18 431,350.21 237,357.74

1,726,193.81 2,068,177.47 217,449.56 20,000.70

1,707,580.89 1,969,281.29 199,510.71 20,289.02

1,738,973.35 1,975,157.67 201,716.00 71,262.86

27,149.99 5,416.54 1,617.19 47,270.73

1,753,343.80 2,073,594.01 219,066.75 67,271.43

31,392.46 5,876.38 2,205.29 50,973.84

*Included investments in subsidiaries and associates. The consolidated and the Bank’s financial statements As at December 31, 2017 and 2016, has total assets before eliminating net interbranch transactions of Baht 5,595.05 million and Baht 3,794.24 million, respectively.

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7.25 Significant Financial Position and Operations Classified by Domestic and Foreign Business Segment (Continued) 7.25.2 Operations Classified by Business Segment (Million Baht) Consolidated Financial Statements December 31, 2017

December 31, 2016

Domestic

Foreign Branches

Domestic

Foreign Branches

Business

Business

Business

Business

Segment

Segment

Segment

Segment

Total

Total

Interest income

120,970.49

4,714.82

125,685.31

127,399.39

5,392.07

132,791.46

Interest expenses

(36,614.81)

(3,292.46)

(39,907.27)

(42,168.01)

(3,657.62)

(45,825.63)

Interest income, net

84,355.68

1,422.36

85,778.04

85,231.38

1,734.45

86,965.83

Fees and service income, net

23,946.00

75.15

24,021.15

21,944.65

97.34

22,041.99

Other operating income

13,335.34

2.36

13,337.70

15,578.52

102.10

15,680.62

Other operating expenses

(93,756.42)

(472.86)

(94,229.28)

(83,941.14)

(119.71)

(84,060.85)

Operating profit before income tax expenses

27,880.60

1,027.01

28,907.61

38,813.41

1,814.18

40,627.59 (Million Baht)

The Bank's Financial Statements December 31, 2017

December 31, 2016

Domestic

Foreign Branches

Domestic

Foreign Branches

Business

Business

Business

Business

Segment

Segment

Segment

Segment

Total

Total

Interest income

107,458.61

4,714.82

112,173.43

114,426.84

5,392.07

119,818.91

Interest expenses

(35,018.29)

(3,292.46)

(38,310.75)

(40,688.15)

(3,657.62)

(44,345.77)

Interest income, net

72,440.32

1,422.36

73,862.68

73,738.69

1,734.45

75,473.14

Fees and service income, net

20,187.70

75.15

20,262.85

18,680.61

97.34

18,777.95

Other operating income

11,207.91

2.36

11,210.27

12,582.72

102.10

12,684.82

Other operating expenses

(79,730.99)

(472.86)

(80,203.85)

(70,569.62)

(119.71)

(70,689.33)

Operating profit before income tax expenses

24,104.94

1,027.01

25,131.95

34,432.40

1,814.18

36,246.58

The consolidated and the Bank’s financial statements for the years ended December 31, 2017 and 2016, has total interest income and interest expenses before eliminating net interbranch transactions of Baht 3,177.86 million and Baht 3,561.57 million, respectively.

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7.26 Operations Classified by Operating Segment Segment Definition The Bank is organized into segments for internal management which the Management Committee of each segment is the chief operating decision-maker (CODM). Three reportable segments have been divided based on customer types and nature of businesses: 1) Retail banking segment: develops financial products and services, and also provides services for individual customers relating to deposits, loans, payment for goods and services as well as sale of products released by the Bank’s subsidiaries and business alliances through network branches nationwide. 2) Wholesale banking segment: provides credit facilities and financial services to corporate clients. 3) Treasury and investment segment: controls the Bank’s financial structure to appropriate to make profit from the Bank’s equity investment, foreign currency exchange services, international business and excess liquidity, and also supervising overseas branches and companies in which the Bank has invested and etc. Other segments comprise of middle offices, back offices, subsidiaries and associates. Accounting Procedures for Segment Reporting In contrast to the accounting procedures for external reporting, the accounting procedures of the operating segments are based on the principle of Economic Value Management (EVM), whereby performance is measured, as included in the internal management reports that are reviewed by the Bank’s CODM. In accordance with the EVM concept, all business units are treated as profit centers, having internal service charge (ISC) between service providing unit and service receiving unit. Fund Transfer Pricing (FTP) concept is used to calculating value of fund for fund provider unit and cost of fund for fund user unit. Income and expenses are allocated according to ownership basis in order to gain net operating profit after tax (NOPAT). (Million Baht) Consolidated Financial Statements December 31, 2017 Retail Banking Total operating income Total expenses (excluding bad debts, doubtful accounts and loss on impairment) Bad debts, doubtful accounts and loss on impairment Net profit (loss) Segment assets Segment liabilities

Wholesale Banking

Treasury and Support and Investment Others Adjustments

Total

54,986.60

33,351.78

7,983.37

26,802.39

12.75

1

123,136.89

(31,296.92)

(4,529.13)

(2,859.37) (15,494.90)

(12.90)

1

(54,193.22)

(3,588.15)

(27,601.91)

949.26

(14,592.74)

0.15

(44,833.39)

20,101.53

1,220.74

6,073.26

(3,285.25)

-

24,110.28

972,067.56

1,055,116.71

35,139.65

720,781.50

71,104.59

2,854,210.01

1,450,229.30

630,888.09

203,356.79

196,836.55

78,680.33

2,559,991.06

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7.26 Operations Classified by Operating Segment (Continued) (Million Baht)

Retail Banking Total operating income Total expenses (excluding bad debts, doubtful accounts and loss on impairment) Bad debts, doubtful accounts and loss on impairment

Net profit (loss) Segment assets Segment liabilities

Consolidated Financial Statements December 31, 2016 Wholesale Treasury and Support and Banking Investment Others Adjustments

Total

56,573.57

36,373.33

10,876.56

20,002.70

862.29

1

(30,904.51)

(9,171.82)

(3,215.31) (13,540.50)

(862.44)

1

(5,039.53) 20,629.53

(8,050.98) 19,150.53

(641.45) (19,697.57) 7,019.80 (13,235.37)

0.15 -

(33,429.38) 33,564.49

165,231.60

663,328.82 (43,395.13)

2,689,703.35

201,037.61

213,338.08 (32,682.07)

2,410,298.71

829,308.90 1,075,229.16 1,424,588.67

604,016.42

124,688.45 (57,694.58)

1

In the financial statements, certain gains are presented net of losses and shown either as gains under operating income or as losses under other operating expenses. However, these items from EVM data are predetermined as either income or expense regardless of whether they are gains or losses. 7.27 Interest Income

Interbank and money market items Investment and trading transactions Investment in debt Loans Hire-purchase and finance lease Others Total interest income

Consolidated Financial Statements December 31, 2017 December 31, 2016 10,419.68 11,212.56 281.51 136.96 3,749.88 4,585.02 106,186.68 110,297.76 1,807.97 2,957.22 61.73 40.37 122,507.45 129,229.89

(Million Baht) The Bank's Financial Statements December 31, 2017 December 31, 2016 10,419.49 11,211.74 281.51 136.96 3,746.95 4,580.89 94,485.80 100,286.12 0.10 1.39 61.72 40.25 108,995.57 116,257.35

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7.28 Interest Expenses (Million Baht)

Deposits

Consolidated Financial Statements

The Bank's Financial Statements

December 31, 2017 December 31, 2016

December 31, 2017 December 31, 2016

20,142.20

24,770.33

20,159.15

24,782.41

Interbank and money market items

2,899.65

3,053.18

2,816.80

2,824.20

Contributions to Bank of Thailand (BoT)

9,172.53

9,451.72

9,172.53

9,451.72

199.77

205.99

199.77

205.99

4,237.74

4,726.24

2,728.59

3,487.91

B/E

0.91

0.54

-

-

Borrowings

26.50

29.01

5.21

6.65

Others

50.11

27.05

50.84

25.32

36,729.41

42,264.06

35,132.89

40,784.20

Contributions to Deposit Protection Agency (DPA) Debt issued Subordinated notes

Total interest expenses

7.29 Fees and Service Income, Net (Million Baht) Consolidated Financial Statements

The Bank's Financial Statements

December 31, 2017 December 31, 2016 December 31, 2017 December 31, 2016 Fees and service income Acceptance, aval and guarantee

1,841.59

1,786.33

1,841.59

1,786.33

26,796.67

24,145.12

21,516.20

19,474.32

Total fees and service income

28,638.26

25,931.45

23,357.79

21,260.65

Fees and service expenses

(4,617.11)

(3,889.46)

(3,094.94)

(2,482.70)

Fees and service income, net

24,021.15

22,041.99

20,262.85

18,777.95

Others

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7.30 Gains on Tradings and Foreign Exchange Transactions, Net (Million Baht) Consolidated Financial Statements

The Bank's Financial Statements

December 31, 2017 December 31, 2016 December 31, 2017 December 31, 2016 Gains (losses) on tradings and foreign exchange transactions

3,245.80

4,488.76

3,247.35

4,488.75

Interest rate related derivatives

916.11

2,010.31

903.44

1,984.94

Debt securities

390.14

23.63

390.14

23.63

0.61

(2.40)

0.61

(2.40)

(235.74)

307.21

(235.74)

307.21

4,316.92

6,827.51

4,305.80

6,802.13

Foreign currency and foreign currency related derivatives

Equity securities Others Total gains on tradings and foreign exchange transactions, net

7.31 Gain on Investments, Net (Million Baht) Consolidated Financial Statements December 31, 2017 December 31, 2016 Gains on sale of Available-for-sale securities General investments Total Gains on investments in the liquidation associate Reverse (losses) on impairment of General investments Investment in subsidiaries and associates Total Total gains on investments, net

The Bank's Financial Statements December 31, 2017 December 31, 2016

631.89 31.87 663.76 252.25

664.85 5.47 670.32 -

631.89 31.87 663.76 252.25

664.85 5.47 670.32 -

12.65 12.65 928.66

24.25 24.25 694.57

12.65 (3.69) 8.96 924.97

24.25 24.25 694.57

7.32 Bad Debts, Doubtful Accounts, and Loss on Impairment

Interbank and money market items Available-for-sale debt securities Held-to-maturity debt securities Loans to customers Loss from troubled debt restructuring Total bad debts, doubtful accounts, and loss on impairment

Consolidated Financial Statements December 31, 2017 December 31, 2016 2,263.25 265.23 (3.69) (0.15) (0.15) 42,614.65 33,144.33 (44.36) 23.66 44,833.39 33,429.38

(Million Baht) The Bank's Financial Statements December 31, 2017 December 31, 2016 2,263.25 265.23 (3.69) (0.15) (0.15) 35,281.11 26,711.11 (44.36) 23.66 37,499.85 26,996.16

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7.33 Income Tax Expenses The Bank has been conducting tax management under its tax management policy by carrying out tax payment, tax filing and tax benefit utilization correctly according to the regulations of law. The Bank has considered tax effects both current and future of benefit from carrying amount of assets or settlement of carrying amount of liabilities. If there is reasonably possible that the Bank will get benefits from carrying amount of assets or settlement of carrying amount of liabilities, allowing the Bank to pay income tax increase (or decrease) in its tax base in the future. Such consideration is based on estimates, assumptions, law changes that may occurred, legal interpretation and past experience. In the future, if changes occur, which resulted in Bank to change its decision on the sufficiency of income tax payable, any changes in income tax payable will affect on income tax expenses in the period that the changes occur. Income tax expenses recognized in profit or losses for the years ended December 31, 2017 and 2016 are as follows: (Million Baht) The Bank's Financial Statements

Consolidated Financial Statements December 31, 2017

December 31, 2016

December 31, 2017

December 31, 2016

4,937.25

6,226.61

3,676.75

5,260.42

(139.91) 4,797.34

836.49 7,063.10xx

142.73 3,819.48

1,018.37 6,278.79

Current tax Current period Deferred tax Movement in temporary differences Total

Reconciliation of effective tax rates for the years ended December 31, 2017 and 2016 are as follows: (Million Baht)

Operating profit before income tax expenses Income tax calculated statutory tax rates Tax effects of income and expenses that are not taxable and deductible for tax purposes, net Total

Consolidated Financial Statements December 31, 2017 December 31, 2016 Tax Rate Amount Tax Rate Amount 28,907.61 40,627.59 20.00%

5,781.52

16.60%

(984.18) 4,797.34xx

20.00%

8,125.52

17.39%

(1,062.42) 7,063.10 (Million Baht)

The Bank's Financial Statements December 31, 2017 December 31, 2016 Tax Rate

Amount 25,131.95

Tax Rate

Amount 36,246.58

20.00%

5,026.39

20.00%

7,249.32

15.20%

(1,206.91) 3,819.48xx

17.32%

(970.53) 6,278.79

Operating profit before income tax expenses Income tax calculated statutory tax rates Tax effects of income and expenses that are not taxable and deductible for tax purposes, net Total

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7.34 Components of Other Comprehensive Income and Related Taxes Components of other comprehensive income and related taxes for the years ended December 31, 2017 and 2016. (Million Baht) Consolidated Financial Statements December 31, 2017 Amount

December 31, 2016

Tax (expense) Net amount

before tax

benefit

after tax

Amount

Tax (expense) Net amount

before Tax

benefit

after tax

(12.93)

2.58

(10.35)

2,528.02

(505.60)

2,022.42

1,380.37

(276.07)

1,104.30

6,724.39

(1,344.88)

5,379.51

financial statements of foreign operations

192.59

-

192.59

(79.91)

-

(79.91)

Actuarial losses on defined benefit plans* (Note 7.17)

(1,149.47)

229.89

(919.58)

(936.61)

187.32

(749.29)

Share of other comprehensive income from associates

2,883.38

-

2,883.38

(216.64)

-

(216.64)

Other comprehensive income

3,293.94

(43.60)

3,250.34

8,019.25

Changes in revaluation surplus on assets Gains on remeasuring available-for-sale investments** Gains (losses) arising from translating the

(1,663.16)

6,356.09

(Million Baht) The Bank's Financial Statements December 31, 2017 Amount before tax

December 31, 2016

Tax (expense) Net amount benefit

after tax

Amount before Tax

Tax (expense) Net amount benefit

after tax

(12.93)

2.58

(10.35)

2,528.02

(505.60)

2,022.42

1,380.37

(276.07)

1,104.30

6,724.39

(1,344.88)

5,379.51

financial statements of foreign operations

192.59

-

192.59

(79.91)

-

(79.91)

Actuarial losses on defined benefit plans* (Note 7.17)

(1,124.51)

224.90

(899.61)

(849.70)

169.94

(679.76)

435.52

(48.59)

386.93

8,322.80

(1,680.54)

6,642.26

Changes in revaluation surplus on assets Gains on remeasuring available-for-sale investments** Gains (losses) arising from translating the

Other comprehensive income

* Recorded in retained earnings ** Included Gains (Losses) from reclassification of investments

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7.35 Fair Value of Financial Instruments Financial assets and financial liabilities instruments carried at fair value classified by levels of valuation as follows: (Million Baht) Consolidated Financial Statements December 31, 2017 Level 1

Level 2

December 31, 2016

Level 3

Total

Level 1

Level 2

Level 3

Total

Financial Assets Derivatives assets

-

33,833.40

-

33,833.40

-

30,063.05

-

30,063.05

Trading investments

-

8,483.91

-

8,483.91

-

17,103.12

-

17,103.12

39,514.28 118,982.45

-

158,496.73

32,883.94

73,356.92

-

106,240.86

39,514.28 161,299.76

-

200,814.04

32,883.94 120,523.09

-

153,407.03

Available-for-sale investments Total financial assets Financial Liabilities Derivatives liabilities

-

30,284.42

-

30,284.42

-

31,516.69

-

31,516.69

Total financial liabilities

-

30,284.42

-

30,284.42

-

31,516.69

-

31,516.69

(Million Baht) The Bank's Financial Statements December 31, 2017 Level 1

Level 2

December 31, 2016

Level 3

Total

Level 1

Level 2

Level 3

Total

Financial Assets Derivatives assets

-

33,842.51

-

33,842.51

-

30,084.83

-

30,084.83

Trading investments

-

8,486.92

-

8,486.92

-

17,122.65

-

17,122.65

39,514.28 118,982.45

-

158,496.73

32,883.94

73,356.92

-

106,240.86

39,514.28 161,311.88

-

200,826.16

32,883.94 120,564.40

-

153,448.34

Available-for-sale investments Total financial assets Financial Liabilities Derivatives liabilities

-

30,284.42

-

30,284.42

-

31,516.69

-

31,516.69

Total financial liabilities

-

30,284.42

-

30,284.42

-

31,516.69

-

31,516.69

There is no transfer between level 1 and 2 of the fair value hierarchy in the period. Fair Value Hierarchy Fair value hierarchy of the above assets and liabilities instruments depends on differences of data inputs in valuation which determined as follows: · Level 1 – quoted market price (unadjusted) in active markets for identical assets or liabilities that the Bank can access at the measurement date. · Level 2 – other directly or indirectly observable inputs for those assets and liabilities besides quoted market price in level 1. · Level 3 – unobservable inputs for those assets and liabilities.

(TRANSLATION)

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7.35 Fair Value of Financial Instruments (Continued) Valuation Techniques for Level 2 Fair value of derivatives is calculated by using valuation techniques included discounted cash flow model and option pricing model commonly used by market participants. Data used in the valuation is the observable input from reliable institutions, such as interest rates, exchange rates, and volatilities. Fair value of investment in domestic issued debt securities is calculated by using published price in the Thai Bond Market Association (ThaiBMA), while fair value of investment in foreign issued debt securities are presented fair value by using the latest published price from reliable institutions. Besides, by using valuation techniques the Bank has valuation adjustment in order to properly reflect related risk i.e. Credit Valuation Adjustment (CVA), liquidity risk of market is considered by Bid – offer Spread Adjustment and model risk used in the option valuation by currency guarantee program for SMEs. 7.36 Business Transaction within the Financial Business Group Policies and Risk Management Policies regarding Business Transaction within the Financial Business Group. The BOT’s Notification No. SOR NOR SOR. 5/2560 - SOR NOR SOR. 9/2560 dated April 27, 2017 regarding the Regulations on Consolidated Supervision Policy requires the Bank to disclose the business transaction within the financial business group policies and risk management policies regarding business transaction within the financial business group as follows: The business transaction and risk management within the financial business group are prepared as regulations to supervise business transaction within the financial business group, including the Bank and 11 companies within the financial business group (Note 7.5), in terms of common standards and procedures which conform to the BoT’s consolidated supervision policy. the business transaction within the financial business group policies and risk management policies regarding business transaction within the financial business group are approved by the Bank's board of directors and reviewed at least once a year. The policies also include transaction types, rules and regulations of business transactions, ratio of business transactions within the financial business group, and other related operating procedures. Business transactions within the group are conducted in the same manner as public operations and follow the Bank's corporate governance. In case of the Bank having business transactions with a company within the financial business group as it is the Bank's sector, the Bank will follow the BoT’s relenting regulations. 7.37 Others 7.37.1 The Bank has certain default debtors in relation to convertible preferred shares sale and lending with the outstanding principal amounts as per the related agreements totaling Baht 9,745 million as at December 31, 2017, exclusive of the interest charged thereon at default rates. The Bank has fully made a provision for impairment and allowance for doubtful accounts according to the BoT’s regulations and is currently in the execution process following the orders of the Civil and Bankruptcy Courts.

(TRANSLATION)

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7.37 Others (Continued) These debtors, together with certain other defendants, have also been prosecuted to the Criminal Division for Persons Holding Political Position of The Supreme Court by the Office of the Attorney General. The Supreme Court had issued the order of acceptance on July 25, 2012 and later gave a final judgment on August 26, 2015 that all defendants must be accountable for the damage caused to the Bank. The Bank submitted the letter to the Office of the Attorney General to designate its Department of Legal Execution as the Bank’s legal executioner. In January 2016, the Office of the Attorney General filed a complaint to the Supreme Court to nominate the executing officers. The Supreme Court has nominated executing officers accordingly. The Bank also provided them with the result of property investigation of all debtors in accordance with the court judgment. On October 5, 2016 the attorneys of the Department of Special Litigation arranged a meeting for representatives from the Bank of Thailand, the Anti-Money Laundering Office and the Bank to consider the problems regarding the legal execution of the Supreme Court’s order. They will coordinate and exchange information, and each party will utilize its authority by the law and the Supreme Court’s order for legal execution towards the defendants for the Bank’s benefits. On August 17, 2017, a defendant of the criminal suit of the Persons Holding Political Positions, who was not one of the default debtors, made a partial settlement of Baht 1,635.74 million to the Bank in relation to the criminal lawsuit. The Bank has accepted such payment, which is recorded the transaction as revenue from litigation compensation, and also sent a letter to this defendant demanding for further payment together with all other defendants to the Bank for the remaining compensation amount according to the order of the Criminal Division for Persons Holding Political Position of The Supreme Court. For the civil lawsuit, the Bank still has the right to full suit and continues the legal execution and debt collection processes against all the default debtors according to the relevant judgments. 7.37.2 In 2010, the Bank lend a company of USD 95.67 million (Baht 2,884.61 million) pledged an investment in ordinary shares of a foreign financial institution as collateral. Although such shares equaled to 50 percent of its authorized shares capital, are on the Bank’s behalf, but the Bank has no influences over this invested financial institution. The Bank has already received full loan repayment under this contract since July, 2011, but not yet transferred those ordinary shares as collateral back to the company because the company need to find a financial institution to be a new investor first. 7.37.3 On October 12, 2016, the Bank is considering the principle of closing a certain foreign branch. Currently, the Bank hired legal consultant and on the process of discussion with related departments. Assets, liabilities and operating performances of the branch do not have a material effect on the Bank’s financial statements. 7.38 Approval of the Financial Statements These financial statements have been authorized for issue by the Board of Directors on February 28, 2018.