KResearch sees slower growth in bank deposit
LOWER LOAN demand is slowing deposit growth in the banking industry, affecting the loan-to-deposit ratio, while the two consecutive cuts in the Bank of Thailand's policy rate in the first half of the year have also served to make deposit products less att
Kasikorn Research Centre’s head of money and banking, Thanyalak Vacharachaisurapol, said that in the first six months, many banks had toned down their campaigns to draw new deposits, including for roll-overs of matured term deposits. Deposits this year are expected to grow by 6 per cent, slower than last year’s 7 per cent and 10 per cent in 2013.
She said the policy-rate cuts had resulted in investors shifting from banks’ deposit products to other instruments.
KResearch has lowered its loan-growth target for the banking industry to 5-6 per cent from 7-8 per cent, and Thanyalak said the actual figure for this year was likely to be closer to 5 than 6 per cent.
Retail lending, especially mortgages, will be the key driver of loan growth because of the low interest rates, she said.
Mingkwan Pattanawong, head of retail marketing of TMB Bank, said Thais, especially younger people, preferred traditional savings accounts even though they offered low interest rates, as such products were convenient and flexible.
Despite the slowdown in loan demand, TMB still puts importance on deposit accounts as this is where people begin saving, she said.
The bank has actively promoted its TMB No Fixed Account, highlighting it interest rate of 2 per cent per annum and ability of depositors to withdraw money twice a month. Depositors also escape the 15-per-cent withholding tax on interest payments required by general fixed-income accounts.
Since the bank launched No Fixed four years ago, it has attracted more than 1.6 million accounts.
At small banks that offer high-interest-rate accounts, the required opening deposit is at least Bt30,000, sometimes as much as Bt100,000. TMB No Fixed requires an opening deposit of Bt1.
