KTB sees little impact from BOT rate cut
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Krungthai Bank, Thailand's second-largest bank, expects the interest rate cut to not have an immediate impact as long as banks have the liquidity to meet the strong loan demand.
However, the trend of interest rate cuts should be gradually seen after the Bank of Thailand cut the policy rate last Wednesday by 25 basis points. KTB does not intend to take the lead in cutting deposit or lending rates, KTB president Vorapak Tanyawong said.
He acknowledged that the bank that cut the rate first might lose deposits to other banks.
KTB showed strong loan growth in the first quarter of 4.6 per cent, while Bangkok Bank saw a drop in loan growth of 0.2 per cent due to huge repayments by corporate customers.
Vorapak said that lending growth in the second quarter should be similar to the first quarter, with the bank still giving importance to working capital and supply-chain loans.
However, the bank has no plan to revise up its loan growth target of 8-10 per cent despite the strong loan demand in the first half, he said.
KTB has jointly granted a bridge loan to CP All to acquire Siam Makro and the deal is
positive for its corporate loan outlook.
Kittiya Todhanakasem, first senior executive vice president, KTB, added that though there is strong loan demand, the bank has to ensure liquidity, for which the deposit base remains an important channel.
“The rate cut will also impact depositors, therefore, the step towards the rate cut must be cautious. KTB will try to keep the loan-to-deposit ratio at 90-92 per cent,” she noted.
She said the bank may not hurry to revise the growth target because the global economy in the second quarter still looks uneasy.
Kittiya said that once commercial banks cut interest rates following the central bank’s move, the demand for retail loans is not expected to accelerate because retail loans were unusually driven by first-car buyers and first-housing projects.
“The demand for housing loans is in line with the economic growth, however, the speed of retail loans this year will slow down from last year,” she said.
