TMB upbeat on loan demand
TMB BANK will not seek to expand its deposit level during the remainder of the year as the current amount is deemed sufficient to support lending demand, chief executive officer Boontuck Wungcharoen said yesterday.
The bank last year reported deposit growth of 10 per cent, while its loan-to-deposit ratio stood at 92 per cent, hence there has been no need for it to increase deposits.
Boontuck believes the TMB deposit level this year will be flat, or possibly grow by just 0.3 per cent, even though lending growth is targeted at 6 per cent.
During the first half of this year, deposits at the bank fell by 0.5 per cent to Bt640 billion, while lending growth year to date is 2.9 per cent.
TMB aims to grow the number of transactional deposit accounts instead by highlighting TMB All Free to attract more customers, he said.
In the 12 months since it introduced TMB All Free, the bank has gained 1.2 million accounts, with an average deposit amount of Bt19,000.
TMB All Free now accounts for half of the active deposit accounts at TMB, the chief executive added.
All TMB All Free transactions are free of charge, but the bank limits the amount that can be transacted to Bt500,000 per day as a security measure for customers.
The bank expects its TMB All Free business to rise by 40 per cent this year.
Fees from retail – or individual – banking will not be contributed by deposits, but will come from investment products such as mutual funds and bancassurance, Boontuck said.
He said the country’s economy should perform better over the remainder of the year than in the first half, with export growth in August an indicator of the good momentum that the economy has picked up.
TMB Analytics, the bank’s research unit, recently revised its gross-domestic-product growth forecast for this year to 3.2-3.5 per cent, from its previous target of 2.8 per cent.
The only area of concern is external factors, such as the state of China’s economy, as Thailand is an open economy, the CEO said.
In his view, the Thai economy has already bottomed out, while non-performing loans (NPLs) in the banking system should bottom out in the first quarter of next year.
TMB has an NPL rate of 2.87 per cent and wants to keep it below 3 per cent, so the bank will set aside a high reserve and write off bad debt, he explained.
“We will set a high reserve for our safety, and the high reserve will make sure that our coverage ratio is not less than 140 per cent. The reserve this year will be higher than last year’s level,” he added.
