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Published on October 31, 2007

The move is aimed at boosting lending in the final two months of the year.

The reduction in a three-year fixed rate will take effect tomorrow, president Khan Prachuabmoh said yesterday. The new rate will be 3.75 per cent for the first six months and 5.5 per cent for the remaining months. The current three-fixed year rate is 5.5 per cent. After three years, the rate will be floated.

However, the bank set aside only Bt20 billion for this loan package, he said. And loan contracts must be signed by the end of the year.

Khan said the bank's net profit in the first three quarters of the year was Bt1.93 billion, down 19.9 per cent year on year.

The reduced profit resulted from the economic slowdown, he said.

The bank increased its reserves to meet the new International Accounting Standard 39, which also adversely affected profit.

However, the bank's third-quarter profit rose to Bt1.17 billion, from Bt761 million in the first half.

From January to September, the bank issued Bt69.7 billion worth of new loans, while outstanding loans totalled Bt587.09 billion. The bank is expected to meet this year's new-loan target of Bt95.5 billion, Khan said. Outstanding loans in the first nine months rose 9.14 per cent. Non-performing loans were 5.68 per cent of all loans, down from 5.7 per cent, while deposits totalled Bt469.99 billion, up 11.83 per cent.

The bank asked the Finance Ministry and the Cabinet to allow it to roll over Bt17 billion worth of bonds. It also plans to borrow Bt27 billion, Khan said.

Wichit Chaitrong

 The Nation