CIMB Thai revamps deposit structure to woo retail clients
CIMB Thai Bank is adjusting its deposit structure to manage the cost of funds and to expand the number of retail customers.
Executive vice president Dusanee Klewpatinontha said yesterday that the trend of lower interest rates had convinced corporate customers that they had many choices for raising funds, so the bank saw no reason to promote fixed-deposit campaigns with high rates pushing up its costs.
The extension of Bt50 million in deposit protection is a benefit for small banks, while the market has many choices for fund mobilisation: The bank can employ interbank lending, issue debentures or launch structured notes instead of undertaking fixed-deposit campaigns.
Year to date, outstanding deposits at CIMB Thai Bank is Bt110 billion, of which 80 per cent is from retail customers. She said that to manage the cost of funding efficiently, deposits should not exceed Bt100 billion.
At present, corporate customers have deposits averaging Bt30 million per account, while retail customers have deposits averaging Bt80,000 per savings account and Bt2 million to Bt3 million per fixed-deposit account.
"We are starting to switch deposit campaigns to savings rather than fixed deposits as we want to acquire new retail customers, not deposit amounts, because the new customers would support the cross-selling of products," Dusanee said. For example, the bank is promoting Speed Savings Accounts paying interest of 3 per cent per annum, with no withdrawal limit. Customers must buy mutual funds or insurance at the bank before opening the account.
She said savings accounts with higher rates would be offered to customers who deposit Bt50,000-Bt100,000.
CIMB Thai Bank yesterday introduced four deposit campaigns for retail customers to welcome Mother's Day, which is tomorrow. The opening deposit required is Bt10,000. The bank estimates that it will draw new deposits of Bt15 billion to Bt18 billion from the campaigns.
For business customers, the bank will design campaigns for money-market products instead of deposit products, which should have a greater role in helping companies manage their funding costs.