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Published on November 16, 2007

Kannikar Chalitaporn, president of Siam Commercial Bank (SCB), said the bank's deposit strategy next year would focus on long-term products. This is based on a projection that the country's policy signal rate will be on an upward trend.

She said all banks have started to mobilise deposits in preparation for loan expansion next year. SCB's business plan next year has not been completed yet, but its loan growth would be around 13-15 per cent.

The country's third-largest bank has launched fixed seven-month deposits offering a higher rate of 2.6 per cent per annum. Under the special campaign, SCB aims to increase deposits by Bt30 billion until the programme ends on November 26. The bank's deposits were Bt797.54 billion as of September.

"We won't focus on a pricing strategy on deposit mobilisation next year, though the bank will offer special rates for some time. We will mainly consider the bank's margin," Kannikar said.

SCB has no plan to raise funds through bills of exchange offered to retail customers because of low demand. Deposits remain the key channel for the bank's mobilisation of funds. The bank's loan-to-deposit ratio is around 90 per cent, and is expected to stand between 90 and 92 per cent. Kannikar believes that implementation of the Deposit Insurance Institution next year will not affect SCB's deposit base as customers trust the bank's financial status.

Prasarn Trairatvorakul, Kasikornbank's president, earlier said the Deposit Insurance Institution would force all banks to develop new deposit products. Some packages could possibly offer a more attractive rate.

The institution would not have an impact on large banks because of their strong position, but smaller banks are likely to be affected, he said.

Somruedi Banchongduang, The Nation