SCB expects rival banks to cut rates
Siam Commercial Bank believes other major banks are likely to follow its lead and cut their interest rates by a further 25-50 basis points this year. SCB was the first bank to respond to the central bank's policy-rate cut on Wednesday by slashing its own rates by 25-50 basis points.
President Kannikar Chalitaporn said yesterday that SCB's rate reduction, which is expected to trigger a third round of cuts by large banks this year, was aimed at keeping its interest-rate spread unchanged and boosting loan growth. Besides, the move is in line with the market trend, she said. Kannikar forecast that other banks' rates would come down by a further 25-50 basis points this year, in line with the overall downward trend. Although lower rates will boost bank lending and the economy, the key factors for stimulating economic growth are investor and consumer confidence, she added. SCB slashed its rates immediately after the Bank of Thailand's Monetary Policy Committee decided to cut its one-day repurchase rate by 50 basis points on Wednesday. Its fixed-deposit rates were reduced by 50 basis points and its lending rates by 25 basis points, effective yesterday. The bank's minimum lending rate (MLR), minimum overdraft rate (MOR) and minimum retail rate (MRR) have been lowered to 7 per cent, 7.25 per cent, and 7.5 per cent, respectively. Deposit rates have been cut by 50 basis points across the board, leaving its fixed three- to 36-month rates at 2.25 to 2.5 per cent. Kannikar said the bank's loan expansion in the first quarter was slightly lower than targeted, though it posted the industry's highest loan growth in the period. "Though the bank has missed its projected lending level in the first quarter, we are keeping the loan-growth target of the SCB group for the entire year at 20 per cent, which amounts to more than Bt100 billion," she added. Although its deposit rates are now lower than other large banks, Kannikar is confident SCB will be able to maintain its customer base with the services it offers. She believes other banks will in any case follow the SCB's lead and cut rates later. Siam City Bank (SCIB) has also decided to lower its fixed-deposit rates across the board by 50 basis points from today, leaving them in a range of 2.25-3 per cent. Only the bank's MOR will be cut, by 25 basis points to 7.5 from June 1. SCIB is keeping its MLR and MRR unchanged at 7.5 per cent and 8 per cent, respectively. Krung Thai Bank management will meet today to discuss its rate policy, while the other large banks - Bangkok Bank, Kasikornbank, TMB Bank and Bank of Ayudhya - are yet to announce theirs.
Somruedi Banchongduang The Nation
|
