CIMB Thai lags in deposits
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Fierce competition sees bank fall short of 7-month target
CIMB Thai Bank missed its deposit-raising target in the first seven months of this year because of furious competition from bigger banks.
“After Songkran, liquidity in the banking industry [tends] to dry up and we found that major banks started to chase deposits seriously, making deposit mobilisation difficult for small banks,” Adisorn Sermchaiwong, senior executive vice president for retail banking, said yesterday.
The bank’s new deposits this year to last month have reached Bt10 billion, short of the Bt16 billion to Bt17 billion it should have by now to achieve the whole-year goal of Bt30 billion, he said.
The bank’s cost of funds so far this year is lower than in the second half of last year even though it launched deposit campaigns, because the competition in pricing of the banking industry is stable.
The banks usually stock up on funds to prepare for the peak lending season from the last part of the third quarter to the fourth quarter.
CIMB Thai is facing an uphill challenge to reach its target, but it is optimistic that it can be done by offering promotions to secure existing affluent depositors and attract new customers.
It acquired 6,000 preferred customers in the first seven months after cutting the threshold for this category from Bt3 million to Bt1 million to expand its customer base. The bank projects about 25,000 new preferred customers this year.
“We have to find good campaigns to attract existing preferred customers into increasing their deposits,” he said.
The loan-to-deposit ratio in the banking industry is about 90 per cent, reflecting the tight liquidity. Loan growth, including retail lending, is in the fast lane at CIMB Thai.
The strong demand for retail loans especially for housing makes this not the right time to cut the Bank of Thailand’s policy rate even though the economy is likely to stagnate, Adisorn said.
The growth of retail loans depends on the employment rate and business expansion, he added.
