Kasikornbank (KBank) expects fee-based income growth from corporate banking business in a range of 2-5% this year, down from 9% last year, amid rising usage of electronic transactions that charge cheaper fees.
The lower growth forecast is in line with higher electronic financial transactions amid improving technology, said executive vice-president Silawat Santivisat, adding that the government's e-payment scheme is also fostering growth in online financial transactions.
The country's fourth-largest lender by assets earned fee income for wholesale banking business of 12 billion baht last year.
Apart from PromptPay service, the government plans to implement e-payment for capital markets and national digital ID in the next phase.
Digital transactions are improving KBank's business efficiency and cutting operating expenses.
"Obviously, customers are increasingly relying on electronic systems in 2018, thanks to data connectivity, convenience and service efficiency," Mr Silawat said. "Retail clients have been shifting to mobile transactions via K Plus or QR code."
In a bid to offset declining fee-based income from financial transactions, KBank plans to seek higher fee-based income from other sources, especially investment banking service.
The bank has launched innovative digital services for large corporate customers in line with the digital age. The digital services help both the bank and customers reduce financial and non-financial expenses.
For example, KBank offers a service for electronic letters of guarantee to large corporate clients using a blockchain technology, K-Connect LG.
The innovative service lowers document costs from 3,000 baht per transaction to hundreds of baht.
Another executive vice-president, Suwat Techawatanawana, said KBank aims for corporate loan growth of 6-8% this year.
He said the economy should continue to grow in 2018 amid signs of economic recovery in Thailand's trade partners, better than expected tourism numbers and a substantial increase in public investment -- especially for various projects within the Eastern Economic Corridor, which is positioned as a key investment driver for 2018.
The bank's corporate loans surged 12% to 574 billion baht last year, mainly supported by the property, construction, and food and drinks businesses.
Total revenue and fee income amounted to 24.9 billion baht and 12.2 billion baht, up 8% and 9%, respectively, in 2017.
