Others may follow Kbank and up rates
Large banks are likely to raise interest rates next week to stay competitive following a move yesterday by Kasikornbank (Kbank) to hike rates by 25-75 basis points.
Krung Thai Bank (KTB), the country's largest state bank, will hold a meeting on Monday to consider rate adjustments.Pongsathorn Siriyodhin, KTB's first senior executive vice president, yesterday said the bank was likely to make its decision on rates on Monday. Kbank led the banking industry on the latest hike, the fourth in the past six months. The country's third-biggest bank raised lending rates by 25 basis points and deposit rates by 25-75 basis points, effective yesterday. Pongsathorn said large banks had similar sources of funds from the money market and depositors. Once a big bank hiked rates, others would follow. "KTB will hold a meeting on Monday to consider our rate movements. If the meeting decides to increase rates, it is likely to be in the same degree of Kbank's," he said. He said the rates were affected by three key factors: liquidity, competition for deposits and the policy signal rate. He predicted the Monetary Policy Committee (MPC), which meets on Wednesday, would raise the 14-day repurchase rate by 25 basis points to 4.5 per cent. Thus, the country's policy rate is poised to rise by 50-100 basis points for the entire year. This will shift domestic real rates to positive territory by mid-year. The real 12-month deposit rate has been negative for some time because of high inflation. Separately, Tak Bunnag, executive vice president of the Bank of Ayudhya (BAY), also said the bank would consider rate movements on Monday and was likely to following Kasikornbank. He said the bank would consider the consequences of a hike before deciding. "After Kbank raised lending by 25 basis points, its MLR (minimum lending rate) rose to 7 per cent, which equals the current rate of BAY. "If we raised our MLR by 25 basis points similar to Kbank, it would be 7.25 per cent, higher than other large banks. We will have to consider our lending competitiveness," he said. Presently, the MLRs of Bangkok Bank, Krung Thai bank and Siam Commercial Bank are all 6.75 per cent, while Kbank, BAY and TMB Bank's MLRs stand at 7 per cent. Siam City Bank (SCIB) will also hold a meeting to consider its rate on Monday, but the bank is likely to raise only its lending rate, by 25 basis points, said executive vice president Rathian Srimongkol. He said its deposit rates were already competitive and likely to be left unchanged. According to a source at TMB Bank, it is likely to increase its lending rate only, by 25 basis points, on Monday. Somruedi Banchongduang The Nation
|
