• 
• 

Published on July 31, 2007

HSBC, a deposit leader, will review interest rates for foreign-currency deposits.

The bank expects the market for foreign-currency deposits to grow following the central bank's announcement of six measures to stem baht appreciation - one of which is permission for greater foreign-currency deposits at local financial institutions.

The bank's head of marketing and communications, Wichit Phayuhanaveechai, said it had been offering foreign-currency products for a long time.

Most depositors are foreigners. With the relaxation, savers will have alternatives for investment, while banks have more business opportunity.

"The bank will offer customers more attractive rates for foreign-currency deposits. However, we can't anticipate the competition because it depends on the policy of each bank," he said.

Some banks are not interested in offering foreign-currency deposits because they do not match their business.

However, there are some local banks that are focussing more on the deposits, he added.

Siam Commercial Bank expressed its interest in the deposits but it continues to consider the central bank's measure. It will not promote the product aggressively at present, said its executive vice president Rungruang Sukkirdkijpiboon.

"Interest rates for the product is a key strategy that the bank will consider. It will be competitive but shouldn't be too aggressive," he said.

Rungruang, however, did not expected fierce competition. Rates will be similar to baht deposit rates. But if the bank does market the deposits it will boost its foreign-currency deposit base.

The country's third largest bank currently has around Bt8 billion in foreign-currency deposits, accounting for one per cent of its total deposits. Of the Bt8 billion, 80 per cent is in US dollars.

Last week, Prasarn Trairatvorakul, president of Kasikornbank, said the bank would use foreign-currency deposits in overseas investments, particularly in foreign bonds and certificate deposits. That will generate more income.

Presently, the fourth biggest bank has around US$3 billion (Bt101 billion) in foreign-currency assets. The deposits will help the central bank to cope with the stronger baht, Prasarn said.

Kasikornbank was the first bank to promote its foreign-currency deposits after the central bank announced the measures.

The bank's 90 outlets nationwide are ready to receive foreign-currency deposits from both individuals and corporate customers.

Somruedi Banchougduang

The Nation