Scrapping banking fees erodes revenue, Moody's saysBusiness | 26 Jun 2019 12:51 pm
Moody's Investors Service said on Tuesday the removal of certain fees on personal saving accounts by the Hongkong and Shanghai Banking Corporation and Bank of China (Hong Kong) from August 1 is credit negative for the banks because their revenue and profit will be reduced.
The fees include maintenance fees on accounts below the minimum balance requirements and counter transaction fees.
The development is also negative for other Hong Kong banks, Moody's said, because it expects more banks to follow HSBC and BOC HK's lead and discontinue account service fees on customer deposits.
HSBC and BOC HK, the city's two largest banks, have deposit shares of around 30 percent and 14 percent respectively.
Moody's expects that the financial effect of the fees' removal will be greater for BOC HK than HSBC because BOC HK's retail business is concentrated in Hong Kong, while HSBC's retail banking business is spread across Asia Pacific.