Kasikornbank increases term deposit rates
Kasikornbank has taken the lead in another round of deposit rate hikes by increasing the interest on its three- and six-month accounts by 25 basis points, effective yesterday.
The deposit accounts that are eligible for the rate hike of the country's fourth-largest bank in terms of asset size must have deposits of Bt1 million-Bt3 million.Kasikornbank's three- and six-month deposit rates were increased from 3.25 per cent to 3.50 per cent, and from 3.50 per cent to 3.75 per cent, respectively. This is the fifth round of rate adjustment for the banking sector since late last year. Bank deposit rates have increased by 125-150 basis points since January, while the lending rate has risen by 100 basis points over the same period. Kasikornbank is the first commercial bank to raise its rates following the recent policy-signal rate hike. The Monetary Policy Committee lifted the 14-day repurchase rate by 25 basis points last week, which caused the repurchase rate to climb to 5 per cent. Senior vice president Tongchai Charoensit said the bank's rate hike was aimed at raising its deposit rate to that of other large banks. Besides, the adjustment is only for some deposit accounts - not across the board. Bangkok Bank said it would consider market movements for a couple of weeks before making any decision about a rate change. "The bank's liquidity right now stands at a proper level. We derived new deposits of Bt80 billion from a special rate campaign. Therefore the bank has no plan to do anything now. Once the interest rate increases, the funding cost also moves up," Deja Tulananda, senior executive vice president, said, adding that Bangkok Bank's liquidity will only be minimally affected by Kasikornbank's hike. Siam Commercial Bank said it had no plan to change its rates. A Bank of Ayudhya official said there would be no rate change this week. It will hold a meeting to consider the matter tomorrow. Meanwhile, Moody's Investors Service said the individual strength credit ratings outlook for Thai commercial banks was mostly positive or on review for upgrade on rising capital, and diversification of earnings to consumers. It has a stable outlook for average foreign-currency deposit rating at country ceiling (Baa1). On the plus side, Moody's lists risk management improving with Basel II; regulatory bias toward support for stricter requirements; and consolidation. On the negative side: the economy is slowing on rising interest rates; oil-price volatility, political uncertainty, and weaker consumer confidence; slower growth raises the risk of a reversal in the reduction in non-performing loans; and the risk of renewed crony lending at state-controlled banks. Somruedi Banchongduang The Nation
|
