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CIMB Thai to focus on rich clients

CIMB Thai Bank has relocated some branches and designed new ones to tap so-called preferred customers, as it has learned that branch banking is important to these wealthy clients.

CIMB Thai has 165 branches nationwide. It acknowledges that branch banking is not essential for most customers because they require quick service, while wealthy customers prefer using branches, especially to access investment products, according to Adisorn Sermchaiwong, senior executive vice president for the retail banking group.

The bank has a strong footprint in investment banking, and its branches have a role in offering investment products to individual customers apart from taking deposits. Consequently, new funds via branches this year reached Bt24 billion, while new deposits were Bt30 billion.

The number of preferred customers climbed to 25,000 this year from 12,000 in 2012. Assets under management of preferred customers jumped to Bt80 billion from Bt54 billion, he said, adding that these increases indicated that clients in this category valued CIMB Thai's wealth products.

About 60 per cent of the bank's deposit base consists of preferred customers, which CIMBT plans to increase the ratio to 60 per cent next year.

Early this year, CIMB Thai lowered the deposit threshold to qualify for a "preferred customer" from Bt3 million to Bt1 million to boost the customer base. However, the average deposit amount is still Bt3.7 million per person. The bank has kept the minimum at Bt1 million to encourage customers who want to create wealth.

CIMB Thai will try to secure the preferred-customer base because such clients are ready to put their money wherever they can get a high return, Adisorn said. It will increase the number of relationship managers from 55 to 80 next year at 50 branches in Bangkok to take care of rich clients.

The Thai unit will apply the financial-portfolio management system recommended by CIMB Group in Malaysia.

It is developing a new model at two new branches - Siam Paragon and Silom - to cater to preferred customers.

"As a small bank, we cannot compete with major banks in terms of branch numbers because we don't have a large investment budget. Therefore, we use branches to tap upper-class customers and encourage mass customers to make transactions via Internet banking instead," he said.

He said the bank would close some branches that see few transactions, such as Urupong, which has often closed because of the political rallies in central Bangkok.

Even though interest rates are likely to go up next year as a knock-on effect of US monetary policy, CIMB Thai expects corporates will still raise funds through debentures.

The bank next year aims to |raise Bt70 billion to Bt80 billion in funds, of which deposits will account for of Bt30 billion to Bt40 billion and investment products such as debentures Bt40 billion to Bt50 billion.

Adisorn said the bank did not anticipate much growth next year in lending to retail customers, because of weaker consumption and investment. Property developers have also indicated that they will launch fewer projects next year.

New housing loans at CIMB Thai next year are targeted at Bt20 billion, up from Bt17 billion this year, and new unsecured loans are expected to rise to Bt10 billion from Bt9 billion.


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