Deposit rates for corporate clients surge
But individuals may have to wait until Q3
Deposit interest rates for corporate customers have jumped sharply in recent days as banks have moved to rebuild their liquidity positions following the New Year.
But bankers say rate hikes for individual savings and fixed deposits are unlikely until the third quarter, when the Bank of Thailand's policy rate is expected to increase.
At Siam Commercial Bank, accounts for juristic persons have increased by as much as 1.9 percentage points. The bank, which previously paid zero interest for 7-13 day accounts, now quotes 1.65% to 1.9% interest rates. Accounts for 14 days to one month now pay 1.65% to 2.15%, up from 0.8% to 0.95% earlier. One-month corporate deposit accounts are now quoted at rates of 1.9% to 2.15%, up from 0.8% to 0.9% earlier.
Krung Thai Bank has hiked rates even higher. The state-owned bank previously paid no interest for corporate accounts for terms of up to one month, but it now quotes rates of 1.75% to 2.25%, depending on the balance.
TMB Bank has similarly adjusted its deposit schedule, now quoting 2% interest rates for corporate accounts from zero previously. The bank also offers a 2.9% rate for nine-month fixed deposits and 3.5% for 24-month fixed deposits for non-profit organisations and corporate clients under the new TMB Buddy Time Deposit programme.
Luecha: TMB aims to raise 20 billion baht
Luecha Sukrasebya, a TMB executive, said the bank hoped to raise 20 billion baht over the next three months through the new programme.
''Banks will face greater competition this year in both raising deposits and lending operations, particularly as the economy expands,'' he said.
''We have moved to raise our deposit base now before interest rates across the system rise around the middle of the year.''
Rungruang Sukkirdkijpiboon, an executive vice-president at Siam Commercial Bank, agreed that competition for deposits was expected to increase this year.
''You will see a trend towards higher deposit interest rates and new savings products. I think the strategy taken for the large banks will focus on new product features to avoid competing on price,'' he said.
''The smaller banks, meanwhile, will still focus on price in raising funds.''
Mr Rungruang said the new Deposit Insurance Act, which passed late last year, was another factor influencing the competition for bank deposits.
The new law will impose a one-million-baht ceiling on state guarantees for bank deposits after a five-year implementation period, replacing the blanket guarantee on deposits that has existed since the 1997 crisis.
Another banker said financial institutions typically move to cut corporate deposit rates at the middle and end of each year to minimise fees paid to the Financial Institutions Development Fund.
''We've seen a number of banks raise long-term rates since last November, as well as odd term-deposit products such as Krung Thai's five-month deposit account or Kasikornbank's aggressive bills of exchange programme for large depositors,'' he said.
''In any case, individual savings deposits and three-month fixed deposits don't look to change in the near future, or at least until the central bank's policy rate changes. Both products account for 70% to 80% of total bank deposits.''