Monday, August 25, 2008

Bullish on boxes

Bullish on boxes


In this day of ATMs and internet banking, safe deposit boxes seem a throwback to another age.

But not in Yaowarat, where customers may wait years before a box becomes available.

For many investors in Chinatown, local safe deposit boxes are their main repository for gold bars bought and sold each day.

What's inside? The family wealth

''We have plenty of customers on our waiting lists for a box. Most just want a place to keep their gold,'' said an official at the Sampeng branch of Bangkok Bank, where all 200 boxes are in use.

He said confidentiality rules precluded bank staff from knowing what customers kept in their deposit boxes. ''But it's pretty obvious when you see customers walk in with heavy bags. Particularly for upcountry residents, they use the boxes to hold their gold purchased from local shops.''

Gold has become a major asset for retail investors thanks to the sharp rise in prices in recent years and the metal's traditional use as a buffer against inflation.

For banks, deposit boxes are a service offered to valued, long-term clients. Most banks would just as well do away with the service, considering that the small fees received hardly cover the security and maintenance costs.

At Siam Commercial Bank's Yaowarat branch, a branch official said all 100 boxes were in use under long-term contracts.

''We've seen some increase in transaction volume as more customers come in to check their boxes and store or take out gold thanks to greater activity in the market,'' he said.

Some boxes had been rented out to the same customer for 20 to 30 years, and in some cases, passed directly to descendants.

''A safe deposit box is almost like a family heirloom for some.''

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