Kasikornbank to increase safe-deposit boxes at some branches
KASIKORNBANK will spend Bt100 million to add 10,000 safe-deposit boxes to its Rangsit, Bang Na and Bang Bon branches to cope with rising demand from the mass market.
Thawee Teerasoontornwong, first senior vice president, said last week that KBank will be the first commercial bank to offer safe deposit boxes to non-affluent customers.
The economic uncertainty and the recent flooding have convinced customers to seek a temporary place to store their valuables. However, the existing 40,000 boxes have all been taken by wealthy customers.
The bank charges around Bt2,000 per year for a safe deposit box, but it is an added service for customers with assets under management of at least Bt10 million.
"In terms of investment, the safe box service cannot generate a return because we charge annual rent of only Bt2,000-Bt3,000 depending on the box's size," he said.
The new boxes will be limited to only one per customer and to only a two-year contract.
Safe-deposit boxes are part of the bank's branch strategy to lift standards to the international level under the World Best in Class programme.
Urbanisation is driving network expansion, but the bank is worried about the breakeven point for branches.
To ensure new branches upcountry will generate a quick return, the bank will test the market with a scaled-down, "mini branch" model.
A mini branch costs Bt5 million to open against Bt10 million for a full branch, but is expected to break-even in three years instead of four to five years for a full branch.
The bank will upgrade a mini branch to a full branch once it sees a satisfactory level of transactions and demand for complex products such as funds.
By the end of this year, mini branches will expand to 102 from 56 currently.
For second-tier districts with low economic growth, the bank will offer the K-Lobby model, which provides basic services such as ATMs, electronic fund transfers and cash and cheque deposit boxes. The cost of a K-Lobby is Bt1 million.
Branches are essential for the Thai market especially upcountry, unlike in Bangkok, where there is a rising trend of self-service via the Internet and mobile banking.
"In terms of branch strategy in the near future, we must think about zoning and improve advisory services to enhance customer satisfaction," he added.