Siam Commercial Bank might need to seek other sources of revenue if the Bank of Thailand asks commercial banks to waive transaction fees.
Commercial banks will meet the Bank of Thailand tomorrow to discuss transaction fees, including ATM money transfers, interprovincial deposits and withdrawals.
SCB president Kannikar Chalitaporn yesterday said the bank would await the outcome of the meeting before saying whether it would waive any fees. Any transactionfee reductions should be fair to all parties, she stressed.
However, the bank would have to seek revenue from other products if it had no income at all from transaction fees, she said.
Kannikar said that in conducting banking business, return on equity was a key indicator of the strength of financial institutions.
Under the banking sector standard, return on equity has to stand at between 10 and 20 per cent, with anything less than 10 per cent meaning an institution is not strong enough.
However, she added, a waiver or reduction in fees would lead to a loss of income, especially from interprovincial transactions. Income from interprovincial transaction fees in large banks is estimated at more than Bt10 billion annually.
The SCB president said transaction fees formed part of nonnet interest income, which accounts for 30 per cent of overall revenue.
Moreover, some bank services are subject to fees while others are not, she said, suggesting there should be consideration of fee reduction on a servicebyservice basis.
Another factor to take into account, she added, was that the transaction fees of Thai banks had been developed to match the needs and benefits of customers.
"During the past two years, SCB has helped hotel operators to survive, which we have done as a means of benefiting customers. Moreover, we have provided loans to operators in many sectors to lift the ability of Thai industry to compete in the global market," she said.
SCB yesterday signed a memorandum of understanding with the Federation of Thai Industries to provide an additional Bt10 billion in loans to FTI members through to the end of 2012.
The bank will also extend another Bt5 billion to operators if they need more funding for expanding industry clusters.
The financial assistance is part of the cooperation agreed between SCB and the federation to lift the competency of entrepreneurs.