FM Korn: Thai banks 'must discuss fees'

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FM Korn: Thai banks 'must discuss fees' 
Bangkok Post: 9 Sep 2010
Banks 'must discuss fees'


Local bank executives will meet with bank regulators today to discuss fee charges on transactions and services.

Finance Minister Korn Chatikavanij, writing in his personal Facebook page, said fee-based income accounted for over 23% of the total income of banks as of the first quarter, compared with just over 17% in 2004.

Kasikornbank, the country's third-largest bank, expects its fee-based income to reach 45% of total income this year compared with 28% in 2009.

"Simply put, [banks] don't have to lend much at all to still post significant profits," Mr Korn wrote.

Four of the country's top banks _ Bangkok Bank, Kasikornbank, Krung Thai and Bank of Ayudhya _ are on track to post profit growth of 25% this year, a combined 95 billion baht, he added.

"The question that must be answered [today] is whether these fees are fair or not. Personally, I already have my own answer," Mr Korn wrote.

Bank of Thailand officials have already hinted that local banks will face increased restrictions on fees for services such as electronic fund transfers or inter-provincial transactions.

A study last year by the Thailand Development Research Institute for the central bank found that the fact that fees for cash, interbank and ATM transfers were set uniformly across the system reflected a lack of competition.

Fees have also risen despite the growing use of electronic banking services, which have much lower operating costs than counter-based cash transactions.

http://www.bangkokpost.com/business/economics/195339/banks-mustdiscuss-fees