KBank, SCB hold steady on retail savings rate
The country's two largest lenders, Kasikornbank (KBank) and Siam Commercial Bank (SCB), will not pass on the central bank's 25-basis-point cut to retail depositors for savings, saying the rate is already low.
KBank has no plans to cut its savings rate, which now stands at 0.50%, said co-president Kattiya Indaravijaya. She does not expect other banks to slash their savings rates, as doing so could affect low-income earners.
KBank, the country's second-largest lender by assets, has trimmed its savings rate for corporate customers with a minimum of 500 million baht by 5-12 basis points.
The bank took the lead in slashing its minimum retail rate (MRR) and minimum overdraft rate (MOR) by a quarter percentage point after the Bank of Thailand's surprise rate cut to 1.50% from 1.75%.
The Monetary Policy Committee (MPC) voted 5-2 for the policy rate reduction, saying a more accommodative monetary policy should help economic growth and support the rise of headline inflation towards its target. Two MPC members viewed a rate cut as unnecessary, reckoning there remained a need to preserve policy space.
"KBank insists we won't cut our savings deposit rate for retail customers, and we don't think our peers will either," Ms Kattiya said.
She said KBank cut the MRR and MOR to ease the financial burden of retail clients and small-business operators amid tepid economic growth.
Cutting the MRR and MOR but keeping the savings rate for retail depositors steady would raise the bank's financial costs, but it is manageable, Ms Kattiya said. Deposits remain the bank's main funding source.
KBank plans to maintain its net interest margin at current levels, in a range of 3.3-3.5%, until year-end.
Despite the lending rate cut, the bank does not expect it to boost loan growth for the rest of the year, since lending mainly hinges on real demand and economic circumstances.
But the lending rate reduction is expected to help lower the financial burden of individuals and small and medium-sized enterprises, as well as control the asset quality of businesses, Ms Kattiya said.
Meanwhile, SCB co-president Arak Surivong said the bank has no plans to cut the savings rate for individual customers. Any rate movement would largely depend on economic circumstances, he said.
SCB's savings rate is 0.50%.