BANGKOK, 10 April 2014, – Competition for deposits among Commercial banks in the first quarter of this year was not as fierce as it could have been, as a result of the Monetary Policy Committee’s move to reduce the benchmark rate to 2%. Other factors were the ailing economy as well as the banks’ lack of policy to promote savings, to fund their lending, says a CIMB Bank executive.
According to Adison Sermchaiwong, the Deputy Managing Director of the CIMB Bank, the bank’s deposits during the first 3 months of 2014 increased by 2 – 3 billion baht, mostly in large accounts; whereas deposits in retail customer accounts showed little or no growth due mainly to the low interest rates, leading customers to divert their funds to higher-return investment instruments, such as debentures, mutual funds, bonds and derivatives. The CIMB sold over 10 billion baht’s worth of investment products to its retail customers in the first quarter of this year.
In these circumstances, the CIMB will target new deposits of only 10 billion baht this year, down from the 20 billion baht targeted last year. However, even this target might not be achievable, given as much as 40 billion baht’s worth of the bank’s various products are due to expire, soon after the second quarter, added Adisorn.