“Robust deposit growth of 7.5% seen in Q1”
Siam Commercial Bank has revealed that bank deposits in the first quarter of this year enjoyed robust growth of 7.5% year-on-year, noting that the COVID-19 pandemic and on-line platform awareness has prompted people to boost their deposits, while the business sector has opted to deposit cash for enhanced liquidity in the wake of high volatility in the capital and bond markets.
SCB President Mrs. Apiphan Charoenanusorn revealed that overall deposits in the first-quarter performance results for 2020 stood at 2.27 trillion baht, up 7.5% from the same quarter during the previous year and up 5.4% from the end of 2019. This significant deposit growth is partly due to the successful implementation of the bank’s strategy for enhancing deposit growth, particularly for current accounts and saving accounts (CASA) in terms of deposit amounts and the number of clients. Continued efforts to provide clients with easier depositing access via on-line platforms, such as SCB Easy and strategic partners, also contributed to deposit growth.
“The individual client segment is depositing more money in regular savings deposits, SCB EZ savings deposits, and e-passbooks. Because EZ Savings Accounts and E-Passbooks provide higher interest rates than regular savings deposits, we believe E-Passbook deposits will grow significantly in the same direction with local digital banking expansion in the future,” she said.
The bank’s deposit growth in the first quarter of this year was also caused by a shift in deposits by the individual and business client segments from small- and medium-size banks to SCB through the opening of CASA since they have confidence in the bank’s stability in terms of financial position, liquidity, capital fund, and corporate image in the face of mounting concerns over the COVID-19 pandemic. In addition, clients have reduced their investments in the capital and bond markets and shifted to deposits, particularly in CASA, due to high market volatility. Simultaneously, business clients have been boosting liquidity through deposits, slowing down investment, and shifting to holding cash or deposits with the bank to maintain liquidity. This resulted in the bank’s CASA deposits increasing to 73% in the first quarter of 2020 from 67% at the end of 2019.
Mrs. Apiphan said SCB forecasts that deposit growth will reach equilibrium when the spread of COVID-19 eases. However, the bank will continue its strategy of enhancing deposit growth in terms of CASA and the number of clients while maintaining its existing client base. To encourage clients to deposit their money through E-Passbooks, the bank will offer more attractive interest rates for those accounts compared to regular savings accounts.
Because of these new developments, the bank invites people to save their money through digital deposit products that offer higher interest rates than regular deposit accounts. More importantly, opening digital deposit accounts is another key channel for boosting social distancing in line with measures to prevent the COVID-19 pandemic.