Chart, deposits commercial banks : amounts and type of deposits

After a chart that shows the evolution of deposits at commercial banks (% of growth year on year), let’s have a look on the amounts and the type of deposits (it can give us information about people’s mood).

(Source BOT, table FI_CB_011_S2)

The BOT uses units in millions THB. I use billions THB, to ease the reading.

About the deposits, we have :
-demand (= what we can call current account)
-saving
-time deposits

How to read ? In april, the total deposits in commercial banks reached 6 955 billions THB.

On this total, 3 680 billions were time deposits, 2 842 savings, and 382 demand deposits.

What can we learn from that chart ? Unfortunately too many things. 😉

For instance, the point in september 2005 from which time and saving deposits start to diverge. Then after we have like a rugby ball shape… Time deposits are growing, saving are declining… Until january 2007, when the tendance start to reverse (albeit slowly).

What does it mean ? As I said, we have just too many explanations. We could list a few :
-time deposits are less flexible than savings (you sign for a certain lenght of time, from 1 month to X years, if you take back your money before maturity you pay a penalty).

-people/businesses increase their time deposits when they feel they don’t need the money quickly.

-it could mean that they feel confident, income is rising, so they can save more, for the long term

-or the contrary : they’re scared about future… they want to save more, for the long term. They hoard cash.

-people are more “finance savy” and understand that interests paid on time deposits are higher than with regular saving accounts. So it could be a “fashion”. The banks are pushing time deposits toward their clients, like a financial products.

-or it could be entirely related to businesses. Economy is sound, growing, cash flows are high, so it makes sense to save… Or the companies hoard cash, because they’re afraid, they don’t want to invest because future is too uncertain.

-we could also copy the political history onto the chart. End of 2005, Thaksin start to have hard time. Beginning 2006, house dissolution, new elections, boycott by the opposition, rallyes. High tension. September 2006, Coup, Junta…

It’s really a typical set of datas from which you can extract many different (and opposite)… truths. You shall find your own. 😉

I would like to give you my own analysis though : time deposits… are for the big players I think (companies and “rich” individuals…).

Therefore, the savings deposits are a better indicator of the population’s mood. The decline from september 2005 could be linked to the beginning of a sluggish economy. Then the coup… the Junta… then things start to get better half 2006… savings increase again.

However, let’s not forget : in may 2005, savings were at 2 743 billions… in april 2008, we were at 2 841 billions. A mere +3,5 % in 3 years ! Despite inflation. And despite many “boost policies” from the government.

I mean if we speak in real THB… we have negative growth here.

Asian people are traditionally big savers (unlike US for instance…). So from my point of view, this is not brillant.

-Unless, thai people started to mimic the americans (let’s consume all what we earn), like a switch in behaviour. Possible.

-Or, the decline of savings could be linked to the famous… “inflation expectations” (better to spend today, because tomorrow my money would buy less). This is tricky : inflation fuels… inflation.

Anyway : if you look again the chart of evolutions, the growth of total deposits in Thailand is declining.

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Thailand Crisis

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But this time, it's different.

The key to understand the present turmoil is the inevitable... succession of King Bhumibol.


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