CIMB Thai Bank (CIMBT) wants to grow its savings deposit base and leverage its deposit customers to expand its wealth management business.
According to Thiyachai Chong, the bank's head of wealth management business, over the past several years the bank has steadily increased its savings deposit portfolio, raising its share to 60% of total outstanding deposits.
This growth, both in the number of depositors and deposit amounts, has been driven by contributions from first-time workers, emerging affluent individuals, and mass affluent segments with assets under management (AUM) ranging from 1-10 million baht.
In the first 10 months of this year, CIMBT increased individual savings deposits by 47% compared with the end of 2023, driven by product innovations and competitive interest rates for both traditional and digital savings accounts.
CIMBT, a mid-sized bank, offers the CIMB Preferred Savings account with an interest rate of 2.2% per year for the first four months, dipping to 1.9% after this period. The rate is available to new clients with deposits ranging from 3 to 500 million baht.
In comparison, large local banks typically offer an average interest rate of 1.5% for similar savings deposit tenures.
Mr Thiyachai says CIMBT will advise wealthy clients to approach investment in local bonds with caution and selectivity.
Mr Thiyachai said the younger wealthy generation is a key target for the bank's wealth management growth strategy. CIMBT wants to guide these clients towards effective financial planning, he said.
"We aim to attract the younger generation, including first-time workers, by encouraging them to start their investment journey with savings deposits," said Mr Thiyachai.
"From there, the bank will guide them in expanding into higher-risk assets such as insurance, bonds, equities, or other options aligned with each client's risk appetite."
Digitalisation plays a key role in attracting the younger generation to save and invest through digital platforms. CIMBT launched digital bond investment services for the primary and secondary markets in 2020 and 2021, respectively, and has recorded positive growth in transactions since their introduction, he said.
Given the global decline in policy rates, bond investments are expected to perform well next year. However, Mr Thiyachai said geopolitical risks may increase uncertainty in both money and capital markets worldwide.
The local bond market will continue to face challenges related to credit risk and the governance of corporate bond issuers, he said. As a result, the bank will advise wealthy clients to approach investments in these financial assets with caution and selectivity, said Mr Thiyachai.
"The bank will place greater emphasis on the corporate governance of bond issuers in order to guide wealthy clients in investing in local corporate bonds next year," he said.
The bank's wealth management business has AUM of around 400 billion baht, with a target to grow by 10% next year.