Kasikornbank plans to offer alternative savings products to wealthy customers, replacing bills of exchange (B/Es), to cope with changing regulations in several areas, says senior executive vice-president Chatchai Payuhanaveechai.
KBank will pare down its B/E investment portfolio because the product has lost attractiveness on two counts: declining deposit protection from the Deposit Protection Agency (DPA), from 50 million baht per account to one million baht, effective Aug 1; and the Securities and Exchange Commission's mandate on minimum B/E issuance of 10 million per account, announced yesterday.
The bank's B/Es outstanding total 30-40 billion baht out of the country's deposit base of 1.2 trillion baht, with no plan to issue new B/Es.
Mr Chatchai said the bank normally offers B/Es to large customers such as affluent and high-net-worth clients with at least 10 million baht in assets under management (AUM).
With the new regulations and an aggressive marketing plan, KBank wants to create options to serve this customer group, including deposits, debentures and mutual funds.
"The new rules will not affect the bank's deposit base much, as we have educated customers for a long time and most of them understand the new rules quite well and they have allocated a savings portfolio," Mr Chatchai said.
KBank, the country's third-largest bank in term of total assets, expects an increase in AUM of its wealthy customers from 780 billion baht now to 910 billion by year-end.
Of a combined 780 billion baht in AUM, 410 billion comes from affluent customers and 370 billion from high-net-worth clients.
The bank requires minimum AUM of 10 million baht for the affluent and 50 billion for high-net-worth customers.