CIMB Thai cuts minimum assets requirement for affluent customers to open Preferred account

CIMB Thai Bank this year has reduced the minimum assets-under-management requirement for wealthier customers wishing to hold a "Preferred" account to Bt1 million from Bt3 million, to comply with its new retail banking strategy.

Adisorn Sermchaiwong, senior executive vice president of the bank's retail group, yesterday said the company had found that fund mobilisation from the mass market might not be effective enough because of the bank's relatively few branches and automated teller machines.

"As a small bank, we cannot compete with major banks by opening more branches or increasing the number of ATMs to access mass-market depositors. We have to rethink what we can do given that we have relatively few branches, and fund mobilisation from rich customers is our choice," he said.

CIMB Thai has about 12,000 Preferred customers with combined assets under management (AUM) of Bt100 billion. The bank targets attracting new AUM of Bt60 billion this year, half of which will be deposits, thanks to the decision to slash the minimum requirement for opening a Preferred account.

"We want to encourage new affluent customers to touch our products and services, and the AUM tier reduction will help us easily expand the customer base. We will add more relationship managers and revamp the Preferred corners at bank branches as well," he said.

The Preferred account tier reduction is available only this year, however.

Adisorn said affluent customers were more interested in high-return products than in brands.

Meanwhile, for mass-market depositors, the bank will maintain the payroll accounts for employees of business clients, as current- and savings-account business is still important, he said.

He insisted that CIMB Thai's funding costs would not rise even though the bank is aggressively trying to capture more high-income customers, because the Preferred accounts will generate healthy fee income from non-basic deposit products.

To balance the cost of funding, the focus of retail lending this year is on high-yield products such as personal loans.

The bank has increased the number of telesales and direct-sales staff to 800-900 from 500 in a bid to attract more personal-loan customers, said the executive.

Half of the planned new retail loan bookings of Bt20 billion this year will come from telesales and direct sales. Bank branches previously accounted for three-quarters of new lending.

The personal-loan portfolio this year is expected to rise to Bt9 billion, from more than Bt6 billion last year, he said.