Large local banks have announced reductions across the board for their prime lending interest rates following the Bank of Thailand's policy rate cut, aiming to ease the financial burden for borrowers.
Bank of Ayudhya (Krungsri) said on Tuesday it will lower its minimum retail rate (MRR) and minimum lending rate (MLR) by 0.125 percentage points, bringing the MRR down from 7.4% to 7.275% and the MLR from 7.28% to 7.155%.
The bank will also reduce its minimum overdraft rate (MOR) by 0.25 percentage points, from 7.575% to 7.325%, effective from Nov 1.
Kenichi Yamato, president and chief executive at Krungsri, said the bank supports the government's efforts to ease the financial burden by lowering lending rates, aimed at increasing liquidity and reducing interest costs for all customer groups.
Bangkok Bank (BBL), the largest lender in the country by total assets, is cutting its MLR and MOR by 0.2 percentage points, bringing them to 6.9% and 7.35%, respectively.
The bank is lowering its MRR by 0.05 percentage points to 7%. Effective from Oct 24, BBL is also cutting its deposit interest rates across the board. In April this year, the cut its MRR by 0.25 percentage points.
On Monday, Kasikornbank (KBank), Siam Commercial Bank (SCB) and TMBThanachart Bank (ttb) also announced reductions in their prime lending rates, effective from Nov 1.
These banks will keep deposit interest rates steady despite the cuts in loan rates.
The banks are also extending their lower lending rate measures for vulnerable clients until the end of the year, beyond the original expiration date of Nov 15.
KBank, the country's third-largest lender by total assets, will lower its MOR by 0.25 percentage points from 7.59% to 7.34%. The bank's MRR and MLR will each be reduced by 0.12 percentage points, from 7.3% to 7.18%, and 7.27% to 7.15%, respectively.
SCB, Thailand's fourth-largest bank, is reducing its MOR by 0.25 percentage points, from 7.575% to 7.325%, while cutting its MRR and MLR by 0.125 percentage points each, from 7.30% to 7.175% and from 7.05% to 6.925%, respectively.
Similarly, ttb plans to lower its MOR by 0.25 percentage points and reduce both its MRR and MLR by 0.125 percentage points.
The bank will also extend its lower rate measures for vulnerable clients until the end of the year, aimed at supporting liquidity and easing financial burdens for this customer segment.
"The rate cut will reduce the financial burden for vulnerable customers by around 0.375-0.50%," said ttb chief executive Piti Tantakasem.
These banks are classified as Domestic Systemically Important Banks (D-SIBs) by the central bank.
Thailand has six D-SIBs: BBL, Krungthai Bank, KBank, SCB, Krungsri and ttb.
Last week, the Bank of Thailand's Monetary Policy Committee voted 5-2 to lower the policy rate by 0.25 percentage points, from 2.5% to 2.25%, to reduce debt-servicing burdens for borrowers.
The central bank emphasised the lower policy rate will not hinder debt deleveraging, given the anticipated slowdown in loan growth, and remains consistent with the country's economic potential.
The Thai economy is expected to grow as projected, while headline inflation is forecast to gradually return to target by the end of 2024, according to the central bank.
The regulator also expects the deleveraging process to continue.