Siam Commercial Bank, the country's third-largest bank, has set an aggressive deposit growth target of 7-8% for 2009.

Executive vice-president Adisorn Sermchaiwong said the bank posted deposit growth of 100 billion baht last year - 70 billion in the form of deposits and the rest in bills of exchange.

The bank, which had deposits of 920 billion baht at the end of 2008, will focus on alternative financial products that offer better returns than plain-vanilla deposits, particularly with the downward trend of interest rates.

"The bank will focus less on bills of exchange and more on feature products. Special deposit programmes and mutual funds will be highlighted to help deliver higher returns to clients," said Mr Adisorn.

New products such as step-up rate accounts, dual-fixed deposit accounts and other features will be tailored for different customer groups.

Fixed-income funds, property funds and bancassurance are other retail products SCB hopes to highlight in 2009.

"We believe demand for special deposit accounts and different saving products will be higher than demand for normal deposit accounts considering falling interest rates. Investment allocation into higher-return products will be a key point for savers this year," he said, adding that middle-income earners and white-collar employees would be the main market for SCB this year.

Mr Adisorn said savings deposit rates, now set at 0.75% for the largest banks, could fall for the first time in years if the Bank of Thailand continues to cut its one-day repurchase rate.

The central bank cut its policy rate by 0.75 percentage points to 2% earlier this week in light of declining inflation and the slowing economy. Local banks are expected to follow with cuts in deposit and loan rates over the next two weeks.

source : www.bangkokpost.com