Most of Government Savings Bank's retail customers will be unaffected by the central bank's rate hike because their rates are fixed, says the head of GSB.
Personal loans and loans under the People's Bank scheme are already charged the maximum rate, said president and chief executive Chatchai Payuhanaveechai.
He said the bank has 300,000 mortgage borrowers, with half charged a fixed rate and half charged a floating rate.
Commercial banks are expected to eventually pass on the higher rate to their customers, but GSB will be the last lender to raise interest rates because of its role as a state-owned bank, Mr Chatchai said.
Chatchai: GSB will be last to raise rates
On the other hand, GSB is among the first-movers if the interest rate is cut, he said.
On Wednesday, the Bank of Thailand increased the policy interest rate for the first time since 2011 by 25 basis points, aiming to stabilise the economy and build up policy space amid growing uncertainty. Bankers earlier said they would not follow in the central bank's footsteps, due to abundant liquidity.
Apart from GSB, the state-owned Small and Medium Enterprise Development Bank of Thailand has announced that it will keep its minimum lending rate (MLR) at 6.875% until the end of February, while GH Bank announced that it would hold its lending rate steady until the first quarter of next year and later consider nudging up the rate by half of the central bank's rate rise, or 0.125 percentage points.
Mr Chatchai predicted that the central bank will further increase the one-day repurchase rate next March after the general election, tentatively slated for Feb 24, takes place.
GSB's lending portfolio amounts to 2 trillion baht, of which 65% is loans for grassroots people and retail customers and the rest is business and government loans.
Mr Chatchai said the bank's mobile banking users doubled from last year to 4 million and are expected to grow to 8 million in 2019.
The bank's electronic transactions surged to 18 million this year, up from 10 million at the end of 2017. Amid stellar growth in digital, branch transactions fell by 20-30%.
GSB also aims to double the number of merchants using its QR code payment service to 200,000 nationwide.
