Banks await deposits from disgruntled GSB clients

Economy February 19, 2014 00:00

By Sucheera Pinijparakarn
The Na

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Bangkok Bank and Siam Commercial Bank (SCB) expect the influx of deposits from customers who have withdrawn money from the Government Savings Bank (GSB) due to its links with the government's rice-pledging scheme to continue.

Savers flocked to GSB branches on Monday and yesterday to withdraw deposits. On Monday alone, around Bt30 billion in cash was withdrawn.
Smith Banomyong, executive vice president at SCB, said the level of new deposits at the bank’s branches, most of which are located in shopping malls, was unusual.
The bank on Monday saw an influx of more than Bt1 billion of new money.
Smith speculated that the new depositors would opt for short-term deposits, adding that they might have chosen banks located near GSB branches for safety reasons. Most of the new deposits received by SCB over the two days are in savings accounts.
Most of the money withdrawn from GSB is expected to be moved to large banks, he said.
SCB earlier targeted deposits of Bt100 billion this year, significantly down from last year’s Bt230 billion. The bank has decided to reduce its focus on clients with deposits of between Bt500 million and Bt1 billion in order to manage funding costs.
Bangkok Bank executive vice president Pochanee Kongkalai said the bank had seen an increase in new depositors, but was unable to provide details of the total amount of new deposits.
A source at a commercial bank noted that customers of GSB chose to place their money with major banks instead of medium-sized and small banks because they have more confidence in major banks.
Bangkok Bank is the first choice for GSB customers, the source said.