TMBThanachart Bank Public Company Limited (TTB-R.BK) Earnings Call Transcript & Summary

Good afternoon all, and welcome you to our third quarter results. Today, we have Piti Tantakasem and Prapasiri Kositthanakorn to join with us today. So we'll start with the overall picture of third quarter by Piti. And then after that, Prapasiri will walk you through the performance of 9 months. Please.

Okay. Good afternoon, everyone, and thank you again for your interest and your time. I start from a summary. I think nothing change mark in this quarter because our goal remains the same, that we want to be in hibernation mode because in Thailand, the situation was quite gloomy in the third quarter. We went to almost full lockdown, but we didn't call it lockdown, but basically, it's a lockdown where economic activity is almost stopped entirely. And what we want to focus in the third quarter, probably the early third quarter, is to complete cutover integration of the 2 banks, so that we are on time on integrating 2 banks to become 1 so that we can have 1 platform to run as 1 bank, of which we successfully -- the good news is, we successfully integrated the 2 banks with the COVID situation. So overall, the 9 months of this year, we grew our assets very selectively so that we can reduce the pressure on net interest margin by continuing to optimize our balance sheet on both assets and on line. By being very conservative, we start to see that the economics start to recover. Vaccination rollout with Bangkok now hitting at a high level, right? And we start to roll out the whole nation. So the infection rate and death rate is coming down, and Thailand is about to open up our border for tourists, guests from many countries around the world. We believe that the situation will remain very challenging. So it will not be quick share recovery, but the recovery will be gradual because Thailand always heavily rely on tourism and tourism does not mean only impact to hotel industry, but their supply chain. Spending that international tourist bring to Thailand each year is a lot. Thailand is a country of 70 million people roughly. But each year, 40 million people come to Thailand. So it is not a small number of people and money that they brought in at all. Next year, even Thailand is opening up the country. I don't think that tourists will come back even to the half of the peak level, meaning that we have to be very careful and very conservative still and selectively grow in the area that we believe is start to come back normally. On to the next page. You can see that [Foreign Language]. With that strategy, we continue to optimize our balance sheet, meaning growing selectively and also on both deposit side and asset side. So our total balance sheet is coming down a bit. And by changing the way that we support troubled customer, talking with central bank that we have to avoid more [indiscernible] burden approved is shifted from the bank has to prove that customer were in trouble -- customers have to prove the bank -- prove to the bank that they were in trouble. This is very effective way because last time, when the infection rate still low, much lower than this year, the amount of customer who see for debt relief represent 40% of the portfolio. But when it come to September, given almost full lockdown with COVID infection as high as 30,000 people a day and death rate of a couple hundred people a day, we can manage to bring down the total debt relief customer to only 12% of the portfolio, where the detail is on the following page. Next page, please. You can see that we can manage to bring down troubled customers that need support in from ratio part from 38% to 9%. And SME also come down a lot, partly because we exit and we write off a lot ad customer already. The reason that the SME portfolio shifted up even, we reduced the portfolio is because of reclassification. TBANK and TMB use different definition when it come to hauling small enterprise. So once we merge clean up the data, the number go up. But in fact, it just on corporate to SME where the deposit will continue to decline because we grow less loan than repayment and exit. On retail loan, you can see a small uptick on debt relief customer mainly come from mortgage and high purchase because these are working class people. When the country lockdown, they do not have enough money to pay their bill, their high purchase bill mortgage payment. So that part get impacted a bit. But every time that country open up, economy open up, that part will recover quite quickly. As you can see, based on the next page, is the summary of what is -- what was happening, right? We have the 7 scheme here. Just to recap. Central Bank allow banks to do preemptive restructuring and call customer -- can call customer who even ask for skip payment, meaning that they don't pay principal interest as Stage 1. We decided not to do that, and we set our own 7 scheme, and our intent is not to give out too strong medicine too easily, meaning that the most that we should give to the customer is to continue to pay interest fully. By doing this, we can monitor which customer that we should downgrade, which customer that we can keep them in Stage 1 but with PD shift, meaning that ECL will go up, but the staging would remain as Stage 1. So we will never call customer who will seek help just to pay interest partially or skip payment as normal customer anymore, at least their PD need to be shifted up or the stage has to be shifted out to 2 or 3. By doing this, it would reflect in the accrued interest that you also see this path that we may be the only bank in Thailand that accrued interest does not go up because we -- once customers cannot pay interest or seek for debt relief or skip payment, they would be called either stage 2 or 3, meaning that the default popular DSI to this accrued interest will be close to 100%. And when we net that provision against accrued interest, the accrued interest on Stage 3 would be 0 for those kind of customers. And we, at the same time, keep selling the Stage 3 for conservative reasons. That's why accrued interest on Stage 3 would be coming down. And also because of the customer that we give support, at least we ask them to pay interest only. So interest will still be active. And those who cannot pay even interest would be now branded into stage 2 and 3, right? So by doing this approach, we believe that our balance sheet would be very transparent, meaning that Stage 1 is a real Stage 1 that can pay normally. And stage 2 and 3 would be more conservative than what BOT would allow us to recognize. So when it comes to what we call the policy cliff that BOT switched the approach back to the normal situation, we would not get any impact at all because we still treat our customers and the way we book, we classify customer as normal as before the COVID by using this 7 scheme concept. So May I pass the detail or the number to CFO. So then we can walk through with the detailed number and back with Q&A.

Thank you, CEO. Maybe I move on to the detail slide. Next slide, please, yes. Okay. As CEO has mentioned, that we continue our loan strategy on the conservative basis. So the loan balance of the Q3, this impact flat Q-on-Q. But on the year-to-date, it declined by 2.4%. If we were to drill down into each of the business units, the commercial loan balance increased Q-on-Q by 1%. And we continue with the good healthy pipeline for the term, the trade finance pipeline. And the commercial team also extended that service delivery to support SME, particularly in the area of managing the FX, so that will be [indiscernible] more fees in the SME domain. In terms of the retail, the loan balance was negative 1% Q-on-Q, but year-to-date, it's growing 2%. And the key part renewal in the retail segment is home loan and car loan. Let me discuss with the home loan first. In the home loan, we continue to grow the portfolio. So the year-to-date growth in balance is 2%. Nevertheless, in the HP arena, the Q-on-Q and the year-to-date loan balance declined mainly from 2 reasons. The first reason is the repayment has been higher than the new booking. And the result -- the reason of the slow in the new bookings, this is mainly because of the shortage of the chips for the car manufacturer. So we are -- nevertheless, we are seeing that things be improving in this Q4 and the team to maintain a 15% market share in the new car arena. On SME, though the slide indicates the higher portion from 7% to 8%, as CEO has mentioned, this is mainly from the reclassification. So moving next to the deposit side. To match with the loan strategy, we did not grow the deposit. So Q-on-Q deposit balance is flat and declined 3.5% year-to-date. Nevertheless, the mix of deposit is the key to our cost reduction in the cost deposits. Seeing from the slide, the CASA balance has been increasing from 36% mix to 41% mix in this Q3 and the hybrid has moved down from 53% to 49%. This is twofold. First is the reclassifications of the customer using the Ultra Saving account from TBANK. Some of them will be shifted to the CASA portion. And on the CASA, the growing of the CASA is mainly from our flagship product, or free product, which we're paying 0% interest to the customer in this product holding. But what we observe is Q-on-Q increase in the number of the customer, balance per customer and the incentive that they get is the protection that the customers who are entitled to protection has increased Q-on-Q. I think this is mainly from the fact that we were able to communicate the benefits clearly that -- the benefit the customer getting from the protection is far better than the interest rate. So as such, that is the deposit balance. Next slide. Liquidity position has been top of our head as well. From this slide, you will be seeing that the key ratio, the LDR and the LCR, are actually not much changed Q-on-Q. So it's a indicator that we have sufficient liquidity for running the bank. If we move on to the next slide. This slide, particularly on the line chart below, Q-on-Q cost of the proceeds is the same, 0.76%. Nevertheless, if we look at the journey on our balance sheet optimization throughout this 12 or 18 months, the cost of deposit has declined 75 basis points from December '19. So if we move on to the next slide. Now I would like to focus mainly on the loan yield. The loan yield Q-on-Q is declined by 6 basis points. This is from the repricing of the new lending, which is lower interest rate than the existing, I mean, if -- the loan before the refinancing. And we have not done as we expected in terms of growing the unsecured loans in Q3, mainly due to the -- I mean the COVID situations, and we are busy offering the customer with the support. But in Q4, there are already strategy and actions that we are bringing back the high yield unsecured loan back into play. As a result, loan yield of Q3 is 4.46%, but if we add back the impact on PPA, the loan yield is 4.58%. And on NIM, because of the management of the cost of deposit, we maintained a flat 9-months NIM of 2.89% -- 2.98%, sorry, but Q-on-Q, the NIM declined slightly 3 basis points. When we club together, the interest income and interest expense, our net interest income for the quarter is 12.5%. So it's 1.6% down Q-on-Q. So that is the reason that we've been sharing from the loan side deposit side cost and the yield. Let's move on to the total noninterest income on the next slide. On this, if we zoom in, we will be seeing that non -- NII at a bigger picture is Q-on-Q decline. This is due mainly from the lower gain from the trading book as well as a lower dividend income. But if we zoom in on the net fee and service income, it's in fact growing 3% Q-on-Q. On the right, the fee income that has been picking up Q-on-Q are the BAV mutual fund fee and the loan-related fee. The [LG] fee is declined slightly due to the lockdown and the camp site has been closed during this lockdown. One thing that I have to admit is on the trade finance and FX fee. In the Q2 sum, there were incorrect reclassifications of the fee. So we are giving now the revised figures but if you are looking trend on the Q-on-Q, so the trade and FX fee come down slightly. So let's move on to the total operating income on the next slide. You'll be seeing that even though the total operating income declined year-on-year by 5%. On the opposite side, you will see that our costs also decreased 4% year-on-year. This even though we have the integration expenses incurred. I have to note here that certain integration expense, mainly the rebranding marketing expenses as well as the transfer of the collateral post integration, is slightly delayed into Q4 due to 2 reasons. Because of the COVID lockdown, we did not believe -- we believe that pushing the new product or new brand would not be the attention of our customer, hence we delay the spending to the Q4. And the transfer of the collateral certain regulatory body is also closed down, and therefore, there is slow services given by them. But seeing in October and in Q4, we believe that those activity will resume, and we will catch up and finish the transfer of this collateral within Q4. Hence there would be slight around THB 250 million, THB 300 million integration cost push, not push really, but as a result will be incurred in Q4. While before this, we believe that we can finish and have most of the integration expenses in Q3. So that's things that I would like to share. So on the next slide, the cost income ratio is flat. So we are running at 46% Q-on-Q. And Q4, we still believe that it will be a similar pattern. So if you move on to the PPOP, taking income and force that I have shared. So PPOP of Q3 is THB 8.4 billion on the 9 months is THB 25.8 billion. So it's declining 6% year-on-year. Maybe we should move on to the risk cost. We have shared in previous analyst meeting that the intention -- the risk cost in Q3 and Q4 of last year, we have put up, as you can see from this slide, that we put -- set up high provisions because we use the assumption on years back is that we are believing -- we believe that the COVID situation will be a long term and would have the impact in this -- in 2021. And it happened as we observe and we witnessed that the situation, the COVID wave 3 has hit Thailand. But as a result, in this year on Q -- each of the quarter, we are setting THB 5.5 billion risk cost. This is mapping with the customer behavior that we are monitoring based on the scheme that CEO has mentioned. So this is a risk cost for Q3 and hence, the profit of Q3 is THB 2.359 billion and overall for the 9 month is THB 7.6 billion. Maybe let's move on to the next slide. Let me share with you the activity of the provision and consideration as I have shared last quarter that we allow the policy of more time and set up management overlay in Q2. What we did in Q3 is that we fine-tuned the model -- the machine itself, and we have tightened certain policy, particularly in the SICR, the significant increase in credit risk, we are now adopting TMB -- yes, TMB style. So now we have the TTB risk policy, which is, as I've said in the past, that we follow the international standard. We did not include local adoption. And from that model from June, in fact, the model suggested that we can have a lower ECL. Nevertheless, seeing the COVID in Q3 and as CEO has mentioned that the slower recovery from the economic situation of Thailand, we decided that we keep the management overlay. In end of Q3, we have THB 53.92 billion provision. And within that, it's 18% management overlay. If we look into the coverage of the ECL by stage. First, if you may have questions on the Stage 3 that the ECL that we assigned for Stage 3 has reduced and the coverage also decreased from 47% to 44%. This is mainly due to 2 reasons. First thing is that we continue our sales activity. Nevertheless, the sales activity compared Q-on-Q is only 1/3 because we need to make sure that when we are selling our NPL portfolio, we get the value that we should be receiving. Secondly, we did the write-off. The write-off activity impact increased Q-o-Q. And when we did the write-off, the principle in the Stage 3 as well as the corresponding reserve has been written off. Hence, leaving Stage 3 balance with highly collateralized portfolio. Therefore, we would be seeing the coverage declining. But in terms of the Stage 2, the ECL coverage has increased from THB 21 billion to THB 21.7 billion. This is mainly due to 2 activities. First is that we downgrade -- qualitative downgrade our customer whom, with the annual review, we see that the COVID may impact their business on a forward-looking assumption. Even if they do not have the DPD, we also decided to downgrade some of them. So they move from Stage 1 to Stage 2, and we have a higher coverage in the Stage 2. So that is the exercise that we have been working on in Q3. Last that I would like to share on this ECL management is that we -- with the July and August COVID lockdown, the ability of our collection team to reach out to the customer asking for payment is also limited because they do not want to see -- so we see a high inflow to Stage 2 and Stage 3. But in September when COVID has subdued, we have increased the collection capacity as well as giving them the tactic and the product offering so that they can go and discuss with the customer being the debt adviser to them. Hence, we see improve in the flow late in September. And we believe that this effectiveness of the collection teams will continue in Q4 and will help us in managing the risk costs that we need to set up. Next slide, please. On this slide, CEO has mentioned briefly about this, let me explain a little bit more. You'll be seeing the pattern that Q2 and Q3 of 2020 are the -- our accrued interest increase, that is because of the 4 to 6 months skip payments and accumulated accrued interest there was mainly home loan as CEO has mentioned. If you look into the range numbers, that is the amount of the accrued interest in the Stage 3. So by the end of Q4 last year, we decided that we should be setting up provision against accrued interest, particularly for this Stage 3. Because in the past meeting, we can stop accrue and hence it will not be on book. But with the online, we need to accrue it. So we put 100% provision on this Stage 3 accrued interest. And you are seeing that downward trend from THB 1.700 billion and that is THB 400 billion. This is mainly due to the selling activity of the Stage 3. And I would like to add more with CEO mentioned that for the customer taking scheme 5, 6 and 7, where they could not even service the interest, so we marked them. And for those accrued interest, we also set up 100% provision for those customers. So this is the principle and the framework that we are working to make sure that our asset quality and earnings quality would be of the [good chain] as we expected, and there is no throwing the problem to the [indiscernible]. So next slide, please. On the next slide, you will see that the Stage 3 balance has increased slightly in the percentage of Stage 3 in end of Q3 is 2.98%. This increase, as I've mentioned, there's proven more flow but also our softer loan balance Q-on-Q. So stage 2 has increased also slightly. The rest of the principle-based setting provisions loan, less with NPL less solutions, I think I have covered enough. So on the last slide, we are looking at the capital. If you see on this, there is no significant change in the capital requirement CET1. At the end of the quarter 3, it now stands at 14.6%. The fact base that I would like to share is that we believe that this level of capital is sufficient. Hence, we did not roll in the profit of the first half of this year into the capital so that this would leave room for flexibility in terms of making decision on the dividend payment on the entire year performance. So that's it from my sharing.

Thank you, Prapasiri. So now I would like to open the floor for the Q&A session. [Operator Instructions] So while we're waiting for the live [indiscernible], I already received some of the questions. So first from Selvie from MS, Morgan Stanley. Asking to Piti, would you start to growing your balance sheet next year, which sectors?

Yes, I think start from quarter 4 this year. Once we start to see that which sector should be able to survive, which group of customers should be able to survive, we will start to grow our asset again and come out of the hibernation mode. And particularly in the consumer space, home loan, car loan, consumer loan, we will start to see more and more clearly that with the open up of the economy and open up of the border, the country, then which sector or employee of which sector that should start to come back and get their full employment again that would allow us to carefully grow the asset again.

Thank you, Khun Piti. So we received one request interactive. [indiscernible]. Please, go ahead.

I just had a quick question in terms of your mutual funds and your fees. I see that you mentioned quarter-on-quarter, there is some growth. But the number is still quite weak versus first quarter. How do you see the market placed in Thailand? Do you think we can go back up to the first quarter levels? And what about next year? Can we trend back closer towards fee income of like THB 3 billion back per quarter?

Yes. I think the mutual fund fee for our case is quite unique. If compared to a larger bank, our mutual fund fee to total deficit or total asset maybe a bit larger because of the nature of the type of mutual fund that we are selling. And because of the nature of our subsidiary, which is now with partnership of Eastspring, we mainly focus on the higher risk class asset and mainly in foreign investment fund space. The size of FIF, foreign investment fund, for TBANK Eastspring or Eastspring Group is about the same size as second asset where Kbank is about 3x bigger than TTB Bank, right? Meaning that we focus more on high return part of the mutual fund business, not money market and things like that or fixed income term fund. It's good and bad. We would get a better fee per AUM, but the business will be much more volatile. During early of this year, the whole world believed that the COVID is probably gone. So the equity market went up and customer start to be on the risk on mode, and there was a lot in foreign investment fund, and that results in good fee income. But [indiscernible] this quarter start the second quarter, the mode really shifted the variant, the Delta variant, and many more type hit the whole world. So the world swing back to a risk-off move. And then our mutual fund fees come down immediately because people do not jump into investment mode anymore. So we are shifting our business model that we want to focus more on active portfolio, the product that we call TTB smart port, which will help customer do the asset allocation, asset selection and active management by categorize into 5 type of smart port. We grow this business pretty well from a couple of billion to close to THB 20 billion in a short period. Our intent is to grow more and more of this business because it has better fee than money market or fixed income may be not as high as FIF, but it's a good thing for the customer that customer can get portfolio allocation, asset selection and active allocation at very competitive pricing, and it will help we grow this business in a more sustainable way. That is the direction moving forward.

And then maybe if you can share with us, given -- in terms of your credit costs, given that you mentioned that you are very well kind of provisioning and you have classified these asset quality pretty well. Are we able next year to see that credit cost kind of come off as things get better? Are we almost at the end of it already in your view?

I don't think so. I think it will not come down that much, but should not be as high as this year, but it will not come off that much because Thai economy is still very volatile, put that way. I think cash reserve for a small business come to the very end. We still see that NPL formation from small company is still continue even with the opening up of the economy because they have to rely on external economy as well, where Thailand cannot get back into full mode because tourists will not come to Thailand. Local consumption need to heavily rely on government stimulus money. With that type nature, SME space will be -- will continue to be very weak where the export also hit by the inflation, right, and volatility in exchange rate. So it will not be a fast recovery in both consumer space and corporate and SME sector for sure. Good news is I don't think that the risk costs will be as best as this year. But the bad news is we will not see the -- if we share recovery when it comes to NPL and risk cost situation. That's why our strategy is not to keep skeleton at the closet. We think that if any customer who have small chance that they can survive even BOT is so generous, Central Bank is so generous that preemptive structuring -- with preemptive restructuring, bank can call those customers Stage 1 and keep accrue interest go up and hope that we can collect back when situation comes back to normal. For our case, we decided not to do that. So we get rid of all the skeleton in the closet because we believe that more skeletons are yet to come.

So the next question is from [indiscernible] from MS as well. So in the presentation, you mentioned that the CET1 not including [indiscernible]. So what is CET1 including first half net profit rollover? You have that figure?

It would be a plus of 27 basis points on top.

The next question is from Cherry. Khun Piti, are you considering issuing a Tier 1 or Tier 2 onshore or offshore in the near futures?

I don't think so. I think banks is now very much overcapitalized based on the asset growth trajectory, based on the profit that we did not grow in at this point. For Tier 1, it's already at a very high level. So we don't need to issue a Tier 1 or Tier 2 anymore because it's going to be very costly to do that. We have no need for that funding.

The questions from MS again. Would you clarify for the loans that have received restructurings or assistance, are they all in Stage 2 and Stage 3?

No. Let go back to the 7 scheme. On that page, you can see that mostly customer can have the modified term. Let's say, when you come in to borrow for your mortgage loan, you may want to borrow it for 10 years. And you think that with your salary, you can pay off your home in 10 years. But when COVID hit you -- your job and you no longer have OT or you think that your bonus would be gone and you want to play safe a bit by asking the bank to modify your term to become 12-year borrowing to reduce monthly installment. What would happen is we would still consider this customer as Stage 1, but we would shift their default probability a bit. However, for the customers that need the help to deploy that, they ask that I lose my job, I cannot pay for the next 6 months, let the accrue go up, and we will come back and pay you when I to get my job. That customer, by BOT regulation, bank can call them Stage 1, but at TTB, we call them Stage 2. So it would be both PD shift and stage change. And those accrued interest would be mostly provide high provision against in the case of Stage 2. And for the case that they say that, oh, I need a year of skip payment, again, on the expiry, Central Bank say that banks you can still call them Stage 1 because that is a generous preemptive support that you give to the customer. In our case, we will call them Stage 3 straight right away. And the accrued interest that we have to calculate because of the INI approach, we will provide 100% provision against that and accrue. That's why our accrued interest on stage 3, not only does not go up, but it come down because we keep write-off sale bad loan. So this is maybe our own way of conservatism where Central Bank today allowed you to recognize Stage 3 EIR. So the accrue could go up and, of course, allow you to recognize accrued interest on Stage 1 and Stage 2, where, in fact, they do not pay anything. By using this approach, we really give customer -- allow skip payment. And if we are to give them, we would treat them differently in terms of PD staging and also the way we recognize the accrued interest. That's why you can see that our accrued interest come down except this quarter where a lot of mortgage loan customer that seek for skip payment by nature to bad the accrued interest for mortgage loan, we have to collect at the very end of the term, which could mean the next 5 years, 10 years. So it would stay for a long, long time.

Thank you, Khun Piti. The next question is from JPMorgan. Some peers have been increasingly discussing investment in technology-led new products and service. Can you share with us your medium- to long-term view for TTB in terms of investment in technologies? Who would be your customers?

We will continue to invest in digital technology. But I think it's a very thin line between disruption and fashion. We will not invest in anything that fashionable, but may not disrupt the way that we can help us to better serve customer or improve customer experience. We have no intent to invest in, let's say, crypto or blockchain technology that would allow customers to trade crypto. But we continue to invest a lot of money in modernizing our digital banking, allow customer to do more than just transaction, of which we will have more details of our new mobile banking platform that will change a lot of banking service in next quarter and I will come back to that when we are about to launch those new services. But again, we will continue to invest but only in the area that has value-added. I think economy would change the way that we can better serve customer and we improve customer experience. That would be the direction.

Thank you, Khun Piti. The next question from [indiscernible]. Can you give more guidance and outlook on how the retail hedge key portions of the loan book is performing? How is the asset quality trend in this area of HP?

The quality is pretty solid, maybe because of our conservative nature. Put this way, there are 3 main business. Actually, there are 4 type of business. But 99% -- 99.9%, I would say, is in 3 areas: new car, used car and the product we call cash your car. We have very little business on the 4 product called cash your book where you may be familiar with a company like big law or [indiscernible] where you use your title -- car title to borrow against. So it's not really a secure loan. It's borrowed against your ownership, which is not considered a secure loan. We have a small portion of that. We intend to increase that part of the business. In the past, we did not focus that much. And for the cash your car, which is to use your car as collateral for personal consumption of a small -- working cap for small business. 70% of the customers come from customers who borrow money from us to buy new car to buy used car. So our yield and credit cost is far better than the market because we pick the customer who show good track record in paying our new car or used car before we move to a consumer lending working capital purpose. Anyway, with this strong business model, once the economy is resumed, we will use the benefit from the synergy, meaning digital capability from TMB and this business model and strong customer base from TBANK, we -- that is the part of the digital proposition that we are about to offer in the next quarter as well, basically to give good experience to this 1 million customer who borrow car loan and allow them to access into affordable funding through digital offering. This is in the pipeline that we will launch very soon, but mainly to leverage on the -- to capitalize on the strength that we already have from both banks. And this would be the part of the revenue synergy that we aim to capture after we already complete integration.

Thank you, Khun Piti. The next question is about the cost. Update -- please update on the integration cost, how much the bank expect to incur in the following quarter as we saw in the slides that some of the integration expense will be postponed?

Yes. Originally, we would expect that the Q4 would come down quite sharply because we would complete a majority of the integration activities within the first 3 quarters and leave us with some IT write-off at Q4 or Q1 next year. However, because of the COVID, it's slight delay in asset transfer activity -- asset transfer, meaning that the collateral -- the title of customer title that leaves with TBANK that has to be transferred to TTB Bank. We have to delay that activity because many government office has been requested to lockdown and do not provide those service. So those activity is delay out to fourth quarter meaning that the expense related to those activity would be shifted toward fourth quarter, which is this quarter. But the overall trend would come down each quarter.

Alright. It seems like I received just the last questions from investor. So this one asking about the debt collection. Can you share the view on debt collection? What would be the estimations of impact on that?

Yes. Admit that the impact will be huge. In the past, we offset revenue and expense. When couple of percentage of the profit will leave customer who do not pay, we will hire outsource to go and collect and we pass on that expense that we have to pay outsourced agent to customer who do not pay us punctually. This law come out, and I think it's -- personally, I think it's very wrong. The government is trying to protect maybe couple of percent, 2% of the customer at the expense of 98% of the good customer because at the end, industry will try to pass this cost back to the good customer anyway sooner or later. But short-term impact, it would be high. It could be up to THB 400 million to THB 500 million a year for actual expense because the law says that you can -- it's up to the bank, you can hire outsourced agent, but you can charge no more than THB 50 for those people to go out and try to find the borrowers at their home to get back your money. And we admit that we outsource this activity a lot. So we have to look at how to use excess resource that we may have and how to do this differently. Otherwise, the impact on actual expense because we cannot pass through to the delinquent customer anymore would be quite huge. But anyway, it would offset with the major expenses like IT expense that we need to pay to IBM in the past because Thanachart Bank paid quite a large amount of money to IBM. So once we complete full lead integration on second, third quarter onward, we can be commissioned all the services with IBM, the purchase price agreement -- purchase price allocation would come down. Originally, we think that our overall expense next year will be much lower because of this savings. Unfortunately, because of this new act, the cost saving that we will receive next year might need to hardly offset with the additional expense on this one. So instead of passing all the benefit back to -- all back to the shareholders.

Thank you, Khun Piti. Seem like no further questions. So I guess if you have more questions later on, I could you also address that to our e-mail or you can just call me. So I think it's -- let's call for a day. Anything you would like to conclude, Khun Piti?

Okay. Again, thank you very much, everyone, for your interest, and stay safe. See you again next quarter.