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Baht/$ 34.34/41 (Bid/Ask)
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14450
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The Government Savings Bank expects deposits to jump in 2009 with the limited deposit insurance programme.
The limited deposit law, which took effect in August, offers a one-year grace period with existing deposits fully covered. But coverage will fall to 100 million baht per account per institution in mid-2009 and to one million in 2012.
Lersuk Chuladesa, GSB president and chief executive, said the state-owned bank targets deposit growth of 50 billion baht in 2009, or 8% from its current base. Loan growth is set for 50 billion baht, or 10% from its existing book.
But he said deposits could rise beyond targets due to limited deposit insurance, as funds shift from commercial banks to state-owned institutions to take advantage of lower risk perceptions.
''If only 10% of the six trillion baht in deposits shift from commercial to state-owned banks, and the GSB, say, receives half of these inflows, that would be 300 billion baht in new deposits,'' he said.
GSB's current asset base stands at 770 billion baht, putting it fifth among local financial institutions behind Kasikornbank. Its loan portfolio totals 500 billion baht, with deposits of 670 billion.
Even with its plentiful liquidity position, Mr Lersuk said the GSB was continuing to develop new deposit products, including a savings bond offering optional health insurance.
The GSB hopes to raise 10 billion baht in funds from the two-year issue, priced at 10,000 baht per unit and paying annualised interest of 3.5%. Subscriptions will be held from Oct 13-24.
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