Siam Commercial Bank (SCB) has announced a reduction of its maximum loan rate by 25 basis points (bps), aligning with the Bank of Thailand's recent policy rate cut.
SCB, the country's fourth-largest lender by total assets, is lowering lending rates across the board.
The bank's minimum overdraft rate, typically applied to small and medium-sized enterprise (SME) customers, is dipping by 0.25 percentage points from 7.325% to 7.075% per year.
SCB is reducing its minimum retail rate (MRR) and minimum loan rate (MLR) by 0.1 percentage points each, bringing the MRR down from 7.175% to 7.075% and the MLR from 6.925% to 6.825%.
The new rates take effect on Monday, according to the bank's statement.
Kris Chantanotoke, chief executive of SCB, said the move aligns with the central bank's Monetary Policy Committee (MPC) vote of 6:1 to reduce the policy rate by 0.25 percentage points to 2% on Wednesday.
"This reduction aims to ease financial conditions for Thai economic growth, which is projected to be lower than the central bank's earlier assessment," he said.
"The rate cut will help accommodate future uncertainties."
According to Mr Kris, Thailand's economy is expected to grow at a modest pace this year due to external challenges and internal vulnerabilities.
The policy rate cut is expected to reduce financial costs, support spending and investment, improve liquidity and contribute to economic recovery in the coming months, noted the MPC.
SCB's rate cuts should ease financial constraints and enhance funding access for businesses and individuals, particularly SMEs facing increasing competition and liquidity challenges, said Mr Kris.
The lower loan rates will relieve the financial burden on retail customers, many of whom are still recovering from income losses and dealing with high debt levels, he said.
Duangdao Wongpanitkrit, chief financial officer at Krungsri (Bank of Ayudhya), said the bank plans to hold an asset and liability management committee meeting soon to consider interest rate adjustments.
"Typically a reduction in lending rates benefits borrowers by lowering financial costs, particularly those with floating-rate loans such as mortgages," she said.
The economy is expected to expand at a slower pace than previously anticipated due to structural challenges in manufacturing and increased competition from imported goods, despite support from domestic demand and tourism, according to the central bank.
