Siam Commercial Bank to close 200 branches

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Siam Commercial Bank (SCB) plans to shutter 200 physical branches this year as part of its three-year plan to cut operating costs by 30% by 2020 and move towards digital banking.

Mobile banking service has operating costs 40-50% lower than branch services, said chief executive and president Arthid Nanthawithaya. Employees who work at branches will be converted to financial advisers for business and small and medium-sized enterprises (SMEs), as the bank does not envision layoffs.

“The branches to be closed will be those with low traffic, while staff will be moved to in-demand areas,” Mr Arthid said. “We don’t have a policy to lay off any employees, but on average 2,000-3,000 resign annually.

Mr Arthid said recently that the bank planned to downsize from 27,000 to 15,000 employees and pare its traditional branches to 400 between 2018 and 2020 to brace for disruptive competitors.

Thai Credit Retail Bank opened the largest number of new branches, 13, increasing its total to 145; Kasikornbank opened three new branches, raising its total to 1,032; Bank of Ayudhya opened two more outlets, reaching 665; and Bangkok Bank opened one branch, bringing its total to 1,167. SCB, by contrast, saw the biggest decline, closing seven branches, with 1,154 still operating.

SCB’s total financial transactions surged by 30.3% year-on-year in February, driven by digital channels, with the number of transactions soaring by 187.3%. Transactions through ATMs and cash deposit machines (CDMs) jumped 7.1% year-on-year, while those via branches fell by 6.3%.

Sarut Ruttanaporn, senior executive vice-president and head of retail segment and branch networks, said 100 branches will be closed this half, most of which are stand-alone outlets.

Transactions at these 100 targeted branches have declined significantly, he said.

SCB, the country’s second-largest lender by assets and No.2 in digital banking with 6.5 million users, has gained 17,000 additional SCB Easy users since the bank scrapped digital transaction fees for interbank and cross-clearing zone fund transfers, bill payments and top-ups from March 26.

A quarter of the new SCB Easy users are also new SCB customers.

The bank plans to open new-model outlets: SCB Express, the automated banking service; SCB Business Center, mainly serving SMEs; and SCB Investment Center, offering financial advisory services. The bank aims to increase the number of SCB Express outlets significantly this year, as well as open one more SCB Business Center.

Re-disseminated by SINGFIN from Bangkok Post