In Our Value Chain
Krungthai recognizes its crucial role as a commercial bank in driving the financial mechanism for the transition to a circular economy system. Risk management and control are the Bank’s primary priorities. The Bank has clearly defined a risk management framework, organizational risk management policy and guideline manuals for enterprise risk management in accordance with the requirements of the Bank of Thailand (BOT), the Committee of Sponsoring Organizations of the Treadway Commission (COSO) direction, COSO ERM Risk Management Framework and risks arising from the significant activities of the Bank.
In addition to the main enterprise policy management, the Bank has established specific risk management policies correspond to comprehensive risk management, including:
The Bank is committed to supporting businesses, from large corporates to small and medium-sized enterprises, as well as retail customers, to realize their full potential and prepare for a low-carbon future. Collaborating with partners across diverse sectors, including the private, public, and governmental realms, the Bank has developed environmental financial products and services.
Credit Underwriting Process for Green Loans
Green loans serve as financial instruments to support environmental initiatives aimed at reducing greenhouse gas emissions, safeguarding and restoring the environment, facilitating climate change adaptation, and transitioning to a net-zero economy. Applicants for green loans must provide evidence certifying their environmentally friendly operations and commit to transparent performance reporting to ensure proper utilization of the funds.
In 2023, the Bank established a guideline for granting green loans in accordance with the Green Loan Principle (GLP) of the Asia Pacific Loan Market Association (ALPMA) and the Loan Market Association (LMA). The guideline consists of 4 major components, as follows:
Use of proceeds
Identify the purpose of using funds for business activities that support environmental objectives.
Management of proceeds
Monitoring and reporting the results of project spending regularly and transparently.
Process for project evaluation and selection
Project evaluation and selection follow the responsible lending policy. The project must have clear borrowing objectives and qualifications based on project categories and the specified Green Loan criteria.
Reporting
Reporting on loan use and project progress, including performance against targets for each type of spending objective.
Sustainability-Linked Loan Practices
In 2023, the Bank began engaging in Sustainability-Linked Loans (SLL) by adopting the Sustainability-Linked Loan Principles (SLLP) established by the Asia Pacific Loan Market Association (APLMA) and the Loan Market Association (LMA). These loans provide preferential interest rates to large corporates that meet Sustainability Performance Targets, which are annual indicators linked to relevant sustainability assessment frameworks, such as the Carbon Disclosure Project (CDP) and/or Dow Jones Sustainability Indices (DJSI).
Performance
The Bank is committed to supporting businesses, from large corporates to small and medium-sized enterprises, as well as retail customers, to realize their full potential and prepare for a low-carbon future. Collaborating with partners across diverse sectors, including the private, public, and governmental realms, the Bank has developed environmental financial products and services.
Large business customers
ESG loans for large business customers. The total outstanding loan amount is 20,054 million baht.
|
Loan types |
Total outstanding loan amount |
|
Green Loans |
18,054 |
|
Sustainability-Linked Loan (SLL) |
2,000 |
Note: Information as of 31 December 2023
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Krungthai and Mitr Phol signed a Sustainability-Linked Loan deal totaling 2,000 million baht, marking a significant step towards Net Zero and Carbon Neutrality Goals.
Krungthai Bank and Mitr Phol Group have signed an agreement to provide a 2,000-million-baht Sustainability-Linked Loan (SLL) with conditions aligned with the S&P Global Sustainability ratings. This initiative is aligned to achieve net zero greenhouse gas emissions by 2050.
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Krungthai Bank and Global Green Chemicals Public Company Limited have signed an agreement for a sustainability-linked loan totaling 2,000 million baht.
The loan conditions are tied to the CDP Climate Rating and the company’s reduction in greenhouse gas emissions, which aligns with Global Green Chemicals Public Company Limited’s commitment to achieving zero greenhouse gas emissions by 2050.
Small and Medium-sized Enterprises (SMEs)
ESG loans for Small and Medium-sized Enterprises (SMEs). The total outstanding amount is 1,006.
|
Loan types |
Total outstanding loan amount |
|
Green Loans |
1,006 |
Note: Information as of 31 December 2023
Green/ESG Financial Products and Services Promoting the Transition to a Low-Carbon Society
Green Lending
The Bank offers loans to businesses for the installation of solar cells, solar rooftops, and EV chargers, helping them transition to clean energy and reduce their costs. The Bank offers high credit limits based on quotations of up to 5 million baht without collateral and a loan period of up to 7 years. Krungthai ESG Loans
Krungthai ESG Loans
The Bank offers loans to SMEs operating environmentally related businesses, including energy conservation, renewable energy, clean energy, energy efficiency, greenhouse gas emission reduction, and waste management. The loan amount can be up to 2 times the value of the collateral with a repayment period spreading over a maximum of 10 years.
Environmental Loans for Private Sector
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Environmental loans with a low annual interest rate of 3%, fixed for 7 years, are available for businesses implementing pollution control, treatment, or elimination using waste treatment systems compliant with standards, rules, regulations, and laws.
Example of products for retail Customers
Green Home for Cash Loan
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This loan supports the installation of energy-saving devices in households, such as
- Solar rooftop installation
- EV charger installation for electric cars
-
Purchase of energy-saving electrical appliances (electricity saving label no. 5)
