Siam Commercial Bank (SCB) expects FWD Group to reach a deal to acquire its life insurance unit later this year.
The bank needs a partner with expertise in life insurance to sharpen competitiveness and drive future sources of income as operations become more complicated, in part because of substantial legal changes, said Arak Sutivong, co-president of SCB.
The bank is conducting a study on pricing, proportion of share sales and a long-term partnership pact, he said.
The bank said recently in a filing with the Stock Exchange of Thailand that SCB has reached a preliminary pact with FWD on a potential life insurance partnership, including the acquisition of SCB's life insurance unit and a long-term distribution agreement with SCB.
The change in the life insurance business model to focus on distribution and product development is expected to create an opportunity for the bank to deliver double-digit growth in fee income in the future after experiencing a contraction the past few years.
The bank forecasts its fee income to grow in a range of 0-5% this year, compared with a contraction of 2-3% last year, as it centres on generating fee income from wealth management business through mutual fund and insurance product sales.
In related news, SCB appointed Counter Service Co, a payment service provider at 7-Eleven convenience stores nationwide, as its banking agent. The agreement allows SCB's customers to withdraw and deposit money at 11,100 7-Eleven branches nationwide, giving the bank better access to cash-based business operators.
The bank's customers are able to withdraw money, ranging from 100 to 5,000 baht per transaction, at the convenience stores with the maximum withdrawal capped at 20,000 baht per day per customer, said SCB co-president Apiphan Charoenanusorn.
Customers can also deposit up to 30,000 baht per transaction but not exceeding 100,000 baht per account per day. The fee is 15 baht per transaction, but there is a 10-baht discount coupon for buying products at convenience stores from March 29 to June 30.
The bank has 16 million deposit accounts, of which 10 million are also SCB Easy users.
SCB also plans to extend financial services at Counter Service to lending and cross-border banking transactions in the near future, Mrs Apiphan said.
Apart from SCB, Counter Service is the banking agent of Bank of Ayudhya and the Government Savings Bank, but neither provide cash withdrawal service through 7-Eleven convenience stores.
"Teaming up with strong and leading platforms, partners and key players in each sector is the key to developing new capabilities to prepare for growth in the current business world," said SCB chief executive Arthid Nanthawithaya.