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Published on December 11, 2007

Subhak Siwaraksa, chief executive officer of TMB Bank, said it would concentrate more on fee-based income for corporate loans for next year.

However, the bank's 2008 business plan is not completed. It is waiting for new shareholder ING Group to approve it.

Under the bank's recapitalisation plan, subscription for 25.11 billion newly issued shares is scheduled for December 17-20. Following this, representatives of ING will join the board.

"During a talk with ING about corporate business, they wanted the bank to focus on fee income mainly, which differs from retail and small and medium-sized enterprise business. They want to see loan growth from these two areas," Subhak added.

He expected fee income would increase by 25 per cent year on year in 2007. Revenue growth will be supported by retail finance, particularly credit-card loans, bank assurance and foreign exchange.

Separately, Boontuck Wungcharoen, executive vice president of Kasikornbank, recently said it paid more attention to fee-based income from corporate customers, rather than interest income.

Wholesale customers have more choice to raise funds from both money and capital markets.

"Recently, large companies used the capital markets for funds, and the trend is expected to continue. Thus, investment banking and advisory services

will become important. They generate more fees," he said.

The bank aims to see fee income grow more than 20 per cent next year, given more financial products and services. The country's fourth-largest bank

targeted a 20-per-cent growth rate this year. It saw growth of 25.6 per cent year on year for the first nine months.

An analyst at a foreign research house said bank margins had reduced because of greater competition and increasing negotiation power of corporate customers.

Large companies have several funding sources, including the stock and bond markets and financial institutions.

As a result, many banks are turning to fee income rather than interest from lending.

Somruedi Banchongduang

 The Nation