KTB set to follow rivals' lead on rate cuts

Kittiya Todhanakasem, senior executive vice president of KTB, said that while any decision to cut interest rates ultimately depended on the liquidity of each bank, hers was considering making the move after BBL and SCB slash their loan and fixed-deposit rates soon.
She said that if KTB cuts the lending rate, it will lower the minimum loan rate more than minimum overdraft rate and minimum retail rate because the bank already offers lower MORs and MRRs than the industry.
BBL and SCB plan to maintain their savings rates, opting to cut long-term time-deposit rates instead.
“Savings depositors are an important base for banks; these clients should not face lower interest rates,” said Smith Banomyong, executive vice president at SCB.
The savings-deposit rate is currently 0.75 per cent per annum.
At BBL, both loan and deposit rates will be cut by 0.125 percentage point. Interest for all types of loans will be reduced by this amount, bringing its minimum loan rate to 7 per cent.
While the savings-deposit rate is maintained at 0.75 per cent, fixed deposits will see a cut. For example, the three-month fixed rate will be 1.75-2 per cent, down from 1.75-2.25 per cent, while the 36-month fixed rate will be 3 per cent, down from 3-3.25 per cent at present. The cuts will take effect on Monday.
Thaweelarp Rittapirom, executive vice president of BBL, said the decision followed Wednesday’s 25-basis-point policy rate cut by the Bank of Thailand’s Monetary Policy Committee.
SCB will also maintain its savings rate, cutting its long-term time deposit rates by between 0.10 and 0.55 percentage point effective today.
After the cut, the one-month fixed-deposit rate will be 1.90-2.10 per cent, the three-month fixed rate will be 1.75-2.1 per cent, the six-month fixed rate will be 2.15-2.35 per cent and the 12-month fixed rate will be 2.5-2.75 per cent.
The 24-month and 36-month interest rates will be cut by 0.35-0.55 percentage point. As a result, the rate for a 24-month fixed deposit will be 2.75 per cent and for a 36-month fixed deposit the rate will be 2.75 per cent.
The loan rate will be cut by 0.125 percentage point. SCB’s minimum loan rate will be 7 per cent.
Analysts earlier foresaw no such move for loan and deposit interest, given the fierce competition for deposits in response to massive loan growth and the fact that tight liquidity did not appear to support rate cuts.