SCB pushes transactional banking

Siam Commercial Bank aims for 7-per-cent growth in income from transactional banking, from Bt4 billion last year. It is focusing on three main products: cash management, trade finance, and custodial service. 

“Normally, growth of the transactional-banking market correlates with the growth of gross domestic product,” said SCB executive vice president Trirong Butragaht, who is head of the global transaction service division. “However, the expected growth of 7 per cent this year would be higher than the estimated GDP growth of 5 per cent thanks to the greater volume of trade finance, particularly for corporate customers.” 

The structural income of transactional banking is 30 per cent from interest and the rest from fees. The expected 7-per-cent growth in overall income will mainly be from interest income, driven by the comprehensive structural trade finance for corporate customers, Trirong said.

He said the bank was attempting to drive transactional income from medium-sized businesses with annual turnover of Bt75 million to Bt200 million and commercial businesses with annual sales revenue of up to Bt1 billion, as this kind of customers are less active in this area than corporate customers.

 

Innovative account 

Yesterday, the bank launched “SCB One”, an innovative business account for medium-sized and commercial businesses; the latter could help boost market share of the transactional market to 20 per cent within three years from 16 per cent this year.

At present, SCB has some 28,000 customers with typical current accounts. The bank targets 4,000 business customers for this new account by the end of the year, 50 per cent of them new clients. 

SCB One has the potential to replace typical current accounts in the near future. Its distinctive features are automatic calculation of interest and high interest rates similar to those of a one-month fixed deposit account – a minimum of 1.15 per cent for a daily balance Bt800,000, and up to 1.4 per cent on a daily balance Bt5 million. If the daily balance drops below Bt800,000, the rate is 0.625 per cent, the same as a savings deposit.

Previously, most business owners needed to transfer any funds left in their current accounts after making payments and writing cheques to a savings or fixed-deposit account to earn interest. 

However, if the balance of the current account ran low, money had to be transferred back into it from these interest-paying accounts. SCB believes that its new product deals with the needs of such customers by allowing efficient and convenient cash management, and will make the bank the leader in the transactional-banking market.

TMB Bank launched a similar product last year that it called “One Bank One Account”, requiring small and medium-sized enterprises to open both savings and current accounts. 

A daily balance between Bt150,000 and Bt10 million earns an interest rate of 2.25 per cent.

Paphon Mangkhalathanakun, chief SME and supply-chain officer at TMB, said the bank had acquired 15,000 new customers with total deposits of Bt12 billion.