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Published on February 26, 2008

Bangkok Bank (BBL), the country's largest bank, and Siam Commercial Bank (SCB), Thailand's third-largest bank, both lost a large portion of their cash deposits.

BBL announced its cash deposits fell by Bt6.19 billion in January from the previous month.

Cash deposits at SCB and TMB Bank dropped by Bt3.56 billion and Bt922 million, respectively, in the same period.

Several banks have now launched special packages to attract savers. One such campaign is a four-month fixed-deposit programme offering a 3-per-cent rate. BBL, Krung Thai Bank (KTB) and Bank of Ayudhya all offer this package.

Kasikornbank has also introduced a four-month fixed deposit but it only provides a return of 2.75 per cent.

SCB launched a new deposit product called Combo Set late last year. This package offers 2.7 per cent for a three-month deposit and 2.4 per cent for a 12-month deposit.

Bank of Ayudhya posted deposits in January of Bt3.65 trillion, showing a staggering 25-per-cent fall from Bt4.86 trillion last year.

But the country's biggest state-owned bank, KTB, recorded deposit growth of Bt40.92 billion or 4.08 per cent.

Adisorn Sermchaiwong, SCB's executive vice president, said the bank's general saving deposits dropped in January, but the amount of its fixed-deposits rose. Overall deposits last month fell from December.

However, he said it was "normal" for deposits to experience swings in the first month of the year.

This is because both individual and corporate depositors normally have a lot of spending activities during the end of year. This may have led to an outflow in January, he said.

"The bank's deposits this month rose when compared with January. We expect net deposits to show a surplus this month," he said. "Our Combo Set campaign is the key reason to support our deposits this month. The bank has raised new deposits by about Bt10 billion using this package," he said.

BBL's executive vice president Chartchai Srisussamee said deposit uncertainty in January was normal because of new year festivities. After a bad January, BBL's deposits this month have increased by about Bt10 billion.

Citigroup research reported SCB's deposits fell in January because its rates were not attractive. SCB's loan growth in January also dropped by 2.6 per cent from the previous month. But the bank's lending year on year grew 15 per cent.

Trinity Securities said Kasikornbank's deposits grew by about Bt7.3 billion in January because of its four-month programme offering a 2.75 per cent interest rate.

But with big banks offering four-month deposit programmes at 3 per cent, it is unlikely that Kasikornbank will continue to see another big surge in deposits.

Somruedi Banchongduang

The Nation