SEOUL, KOREA - According to banking sources on June 3, the fee income of six major commercial banks in Korea including Kookmin Bank, Woori Bank, Shinhan Bank, Hana Bank, Industrial Bank of Korea, and Korea Exchange Bank during the first quarter of this year was 1,043.4 billion won. In terms of annual rate this is equivalent to 4,173.6 billion won. Comparing to the fee income of 4,947.0 billion won in 2011, this is down 15.6 percent.

 

Of this, the commercial banks saw their fee income in ATM transactions plunge almost 50 percent. For example, Korea Exchange Bank reported that its ATM transaction fee income fell 46.3 percent to 13.8 billion won during the first quarter this year from 25.6 billion won in the same quarter in 2010. During the same period, Woori Bank and Hana Bank saw their ATM fee incomes shrink 25.4 percent and 22.2 percent each.

 

That's largely because of the government's forceful cut in ATM fees in 2011. At the time, the public sentiment against large corporations including financial service firms was at its worst, partly because of the Occupy Wall Street movement sweeping the world. Even though the government suggested guidelines to which the banks could follow but actually it was almost mandatory.

 

According to a study by Korea Institute of Finance research fellow Kim Woo-jin, the banks took 84.4 billion won in losses from ATM operations in 2012 alone. That's an average loss of 1.66 million won for each ATM machine and some ATMs located in busy commercial districts in Seoul cost several times more due to higher rental cost.

 

As a result, the total number of ATMs run by the six major commercial banks across the country has fallen to 26,110 as of the end of March this year from 32,902 at the end of 2009, a 20.6-percent decline.