Deposits rise 11.9% as private, public banks compete for funds via new products
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Public and private financial institutions in May saw an 11.9-per-cent year-on-year rise in overall deposits, including bills of exchange, the Bank of Thailand (BOT) said yesterday.
The central bank put the increase down to competition through new products among both commercial banks and specialised financial institutions (SFIs), which are determined to build up the funds required for loan expansion and the government’s mega-projects.
The recent launch of special deposit products by commercial banks and SFIs came against the backdrop of an easing in the BOT’s monetary policy, with the policy interest rate being cut to boost economic growth.
On May 29, the Monetary Policy Committee slashed the policy rate by 25 basis points to 2.5 per cent, given slower-than-expected economic expansion during the first quarter.
In May, depository institutions witnessed a 12-per-cent increase in the private sector’s credit growth, compared to the previous month’s 12.6-per-cent year-on-year rise.
Both commercial banks’ and SFIs’ household credit slowed during May, while business credit remained relatively steady.
New credits during the month rose relatively sharply, reflecting consistent demand for credit.
Commercial banks’ credit-to-deposits ratio, including bills of exchange, in May was at 93.3 per cent, close to the prior month, indicating continued tightening liquidity, said the BOT.
Their average capital-adequacy ratio in April edged up to 16.13 per cent, higher than the legal requirement, the central bank added.
In the manufacturing sector, first-quarter sales dropped from the final quarter of last year, due partly to the slow global economic recovery. However, profitability rose on a decline in global oil prices and the baht’s appreciation.
The business sector’s operating profit margin rose to 6.3 per cent in the period, from 5.8 per cent in the final quarter of last year, while the interest coverage ratio fell to 3.4 times from 3.7 times.
The business sector’s debt-to-equity ratio remained steady at 0.8 times on average for the first quarter, said the BOT.
However, the property sector’s profit started to slow down after a sharp rise in the fourth quarter of 2012, with property firms confronted by a more severe labour shortage and difficulty in finding prime areas for development.
The property sector’s first-quarter operating profit to interest expenses dropped to 12.1 times from 15 times in the previous quarter, while its first-quarter income to interest expenses fell to 4.2 times from 4.3 times. Both, however, remained higher than the past averages.
