SCB aims for best 'universal' service
Siam Commercial Bank has sets its sights on becoming the "best universal bank" this year, with the goal of providing all of the solutions preferred or required by individual and corporate clients to raise both interest and non-interest income.
“The growth of non-interest income is more important for the bank if it wants to tackle the fierce competition in deposits and loans,” president Kannikar Chalita-porn told a news conference.
She said the gloomy economy was forcing the bank to adjust quickly from product-centricity to customer-centricity in a bid to win customers and expand in three market segments – wholesale, small and medium-sized enterprises, and retail.
Net interest margin (NIM) cannot be increased as much as before, so the bank has to boost fee income from the segments that it does well in.
SCB projects its fee income this year moving up 15 per cent from Bt40.52 billion last year.
In 2011 its NIM improved to 3.26 per cent from 3.11 per cent the year before, but the global economic uncertainties and the imminent hike in the deposit-insurance fee could pressure NIM this year.
The business mix of wholesale, SME and retail ensured that the bank could reach the NIM figure of 3.26 per cent. However, that was no higher than rival banks and the market.
The growth of its non-interest income in 2011 of 20.7 per cent was mainly driven by the wholesale and SME segments.
Arthid Nanthawithaya, senior executive vice president for wholesale banking, said the bank would strongly promote risk-management services to customers who are under risk from the economic volatility.
Cost efficiency amid commodity-price volatility is the priority of businesses and local banks should step up to take care of local customers, Arthid said. Especially companies that are planning to invest overseas require more services from banks to help them manage costs and strengthen their competitiveness.
The bank will increase non-interest income to balance interest income in the near future. The ratio is 43:57 currently. It will maintain the growth of new wholesale loans at 10 per cent to Bt50 billion this year, he added.
Sirichai Sombutsiri, senior executive vice president for SME banking, said SCB would increase non-interest income from the segment to 32 per cent this year from 29 per cent.
SME banking will adjust its business model by switching from product-centricity to customer-centricity to capitalise on the business cycle. It will focus more on small businesses with annul sales of up to Bt50 million since this segment gives higher returns than larger businesses. Total solutions will bring in fee income, he said.
New SME loans this year are expected to decrease to Bt50 billion from Bt57 billion last year, Sirichai said.
Yol Phokasub, senior executive vice president for retail banking, said SCB would increase income by focusing on used cars and its cash-for-car product called My Car My Cash because this segment gives higher yields than new-car loans.
Retail loans this year are estimated to expand by 15-17 per cent from Bt500 billion last year.
Kannikar said the bank’s total loans this year were projected to rise 12-14 per cent versus 22.1 per cent last year.
