CIMB Thai Bank might have to tolerate flat growth in deposits by retail customers as the rate of return is too low compared with other investment instruments.
Adisorn Sermchaiwong, senior executive vice president and head of retail banking, said that even though the bank had offered more campaigns to attract deposits during the first three months, those by retail clients had been flat. It has seen better growth in mutual funds, fixed-income funds and debentures.
CIMB Thai now targets new deposits of Bt10 billion this year, down from the earlier target of Bt30 billion because of the economic slowdown. But judging by the first three months, Adisorn said even the new target might be too optimistic.
In the first quarter, CIMB Thai sold investment products, excluding deposits, worth Bt10 billion to retail customers. He said that with such high demand for these alternative products, the bank should concentrate on them to secure its customer base for the long term.
“Deposit products might not be the proper choice for our clients at this time,” he acknowledged.
CIMB Thai will offer investment products that offer returns as high as 3 per cent per annum with a tenor of only three months, so customers do not need to commit to a 12-month fixed deposit to get such a good return.
The bank is launching campaigns for fixed deposits to offer a choice to customers who need to roll over their investments in products that are due to expire. However, if they want to move their money into other funds, the bank will accommodate them. At least Bt20 billion worth of fixed-deposit products will mature soon, he said.
CIMB Thai this year will also be active in selling non-life insurance such as personal accident policies and first-class motor insurance to its “preferred” (wealthy) customers, targeting premiums of Bt200 million, up from Bt50 million last year.