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These are probably the most asked questions to us since we announced the SCBX reorganization plan in late 2021. The short answer is under SCBX, we will:

• be more agile in adopting or developing new technology,
• have differentiated strategy and risk appetites to be competitive in respective markets,
• have greater degree of flexibility to attract global talent, and
• above all, be able to redeploy excess capital for greater efficiency.

SCBX as a mothership will drive synergies across the group through strategic capital allocation, compliance optimization, and accelerate core tech capabilities with the establishment of cloud, data AI, and cyber security Centers of Excellence (COEs). Segregating the Bank and new growth businesses is to create clarity, flexibility, autonomy, and ability to adapt quickly according to business conditions which are unique for different businesses. SCBX becomes an investment holding company who will continue to look for new business opportunities in Thailand and overseas. SCBX has pre- and post- investment teams to seek investment opportunities, align group strategies, monitor investment performances.

As highlighted in SCBX Strategy Paper 2022, we structured our portfolio companies in 5 strategic themes; namely,

1. Better bank
2. Digital lending
3. Digital ecosystem
4. Digital assets and future tech tech.
5. Climate tech

We had been through the path of building new technology capability within the Bank with our Transformation Program many years ago. We have delivered some early successes as evidenced in multiple digital lending platforms and tech startups that we have incubated, a successful corporate VC arm, and a lifestyle superapp in the making. However, in hindsight, we believe we could have been more efficient in introducing new business model, more agile in adopting new tech capabilities, and more attractive to tech talent. Our experience suggests the Bank should remain a low risk, low return business. Our new structure will in fact ringfence risks of new businesses from the bank’s deposit base and continue to operate on solid capital.

We believe in our people. They are well experienced industry practitioners with full understanding of culture and obstacles we have encountered. Moving to run monoliner business give them flexibility and focus to drive businesses effectively, yet still receive strategic supports from SCBX as a mothership. It is important to note that CEOs of portfolio companies are accountable to their own boards of directors and do not report to the Group CEO. SCBX exercises governance through its representation in portfolio company's boards. We typically have majority control in portfolio company's boards of directors, as well as the appointment of key executives

We have set up mechanisms that have already proven effective in driving the growth of our portfolio companies:

1. Executives are incentivized to deliver: Executives are incentivized to deliver: Executives’ compensations and KPIs are tied to their portfolio company’s performance, and highly driven by IPO aspirations
2. SCBX Group structure: We have set up teams at the Group level to enable and accelerate all portfolio companies from the start-up stage. Our first wave of COEs (Data & AI, Cloud, Cyber) and our growth accelerators (DataX, TechX) ensure portfolio companies all have the ability to reach mature tech and data capabilities from an early stage, accelerating their launch and scale-up

We already have several success stories to prove our entrepreneurship:

• the fast scale up of Robinhood platform,
• the successful AI-based underwriting models at our Digital Lenders such as SCB Abacus and MONIX,
• the rise of SCB 10X to become a leading VC fund in the region, or
• the successful incubation of ventures under SCB 10X such as Ape Board.

Our plan is to bring these dots of early successes to the next level.

We are changing the way we think about talent. We will attract and retain talent by:

1. Building a new tech culture: Our portfolio companies operate in their own unique markets with their own culture and tech DNA, thereby offering unique exposure and development opportunities to aspiring professionals. Our diverse portfolio will also create unique opportunities for top talent to find diverse opportunities for career advancement.
2. Offering value-based compensation: We put in place value-based compensation scheme for critical executives that ties to long-term value of companies they are running.
3. Inorganic expansion: We expect M&A or JV opportunities will be another critical path for us to welcome new talent pool to our family.

Let us share evidence of group synergies by using Robinhood & InnovestX as an example.

SCBX will continue to play a critical role in 3 areas to steer the direction of the Group, namely:

1. Capital allocation: We will adjust capital allocation based on performance and synergy realization with the Group
2. Centralized synergy orchestration: By setting up:
   • 3 Centers of Excellence (CoEs) to define the strategic Group direction and enable capabilities across: Data & AI, Cloud, and Cybersecurity
   • 2 Growth Accelerators: TechX and DataX to deliver analytic and technology solutions across the Group, based on the portfolio companies’ requirements
3. Robust Group governance structure, to align portfolio companies’ direction with Group aspirations, through group-wide risk management policies, SCBX’s appointment of key executives of portfolio companies, as well as regular communication sessions.

While we have bold vision, our execution will be based on prudent practice.

1. We have a clear investment philosophy with targeted return boundaries, and will not hesitate to let companies fail should they not perform:
   • Our investments must be synergistic and aligned with the overall Group’s strategic direction.
   • We take “calculated risks” by initiating our investments with manageable amounts, before scaling up.
   • We put a limit on the debt-to-equity ratio at less than 7x for investments made by digital lending portfolio companies, and less than 3x for our non-lending businesses.
2. As in any PE fund firms, we have a robust, end-to-end investment evaluation and execution process by
   • Business Development team. We have dedicated business development team to scan the market for regional opportunities and assess their potential synergies with the Group’s aspirations
   • Investment committee. We have a management level deal committee and an investment committee consisting of key executives and outside experts to scrutinize each investment deal before proposing to Executive Committee or Board of Directors for approval
   • Post-deal monitoring. A dedicated portfolio management team monitors execution plans and the business performance of our portfolio companies. This is to ensure SCBX is aware of strategic matters and adjust capital allocation in a timely manner.

We have strategically built our digital lending portfolio companies, each with a distinct value proposition, allowing us to:

• Diversify SCBX risk exposure, by having players with different approach and ecosystems for various customer segments.
• Ensure a complete offering and maximum customer reach, by catering to a variety of underserved customers’ needs and personas.
• Strengthen our AI-enabled technologies, by having parallel efforts in developing AI models in underwriting and collections.

Ultimately, we believe these multiple approaches, altogether, will help the Group raise overall share of wallet in the underserved segments. Certain customer overlapping is by design.

We believe digital asset economy has potential to disrupt traditional financial markets. Our purpose is to build required capabilities to serve our customers when that disruption arrives. We focus on the adoption of blockchain technology that underpin the emergence of digital asset economy. This has therefore set SCBX to prepare for the evolution of banking and capital market services into a new technology paradigm. We set an ambition to become a regional provider of digital asset infrastructure services.

SCBX is not going to take excessive risks on digital asset space. We are not pursuing speculative investments in the value of crypto currencies, nor any investment with no real-world commercial use cases. We have shown that we would walk away from deals that turn out to have higher risks than expected.

We have built a Digital Asset Cluster, composed currently of:

• SCB 10X, which incubates and acquires blockchain-related technologies and capabilities, through their venture and incubation arms. They help ensure we stay on top of the emerging technical capabilities in the digital assets space, to be future-ready
• InnovestX, offering a universal investment platform, allowing investors to invest in both digital and traditional assets
• Token X, offering tokenization services for primary market.

We expect InnovestX to lead the monetization of our digital asset investment. We will continue to build digital asset ecosystem by adding more infrastructure-related businesses both organically and inorganically. For us, the current market downturn is a blessing in disguise.