Commercial banks plan to lower their earning targets for 2012, forecasting that the nation will continue to suffer from the economic slowdown and their revenues will decrease due to their recent decision to slash transaction service charges.

Woori Bank has set the aim of its net profit for next year at about 1.5 trillion won ($1.3 billion), compared to the 2011 goal of 1.8 trillion won.

Shinhan Bank is considering scaling down the 2012 target to between 1 trillion and 2 trillion won, compared with 2 trillion won for this year. It also plans to be conservative in setting the total asset growth

KB Kookmin Bank and Industrial Bank of Korea are also poised to participate in the move, focusing on sustainable growth.

In the wake of cutting banking fees including transactions via automated teller machines, KB Kookmin Bank and its affiliate KB Kookmin Card are expected to see their profit reduce by 100 billion won, respectively, next year.

Most local banks have reached a consensus on slashing service fees on customer transactions amid mounting public anger over so-called corporate greed.

The move comes after a group of citizens has been holding a series of rallies against financial companies, criticized for raking in easy money by charging customers high service fees.

According to the Financial Supervisory Service, commercial banks’ combined earnings from the service fees reached an all-time high of 3.7 trillion won for the first nine months of the year

They earned 3.3 trillion won in commission income over the same period last year.

The banking services include remittance, internet banking and the use of ATMs. Banks have faced criticism for providing what critics call hefty dividends to shareholders while being stingy about cutting service fees.

Ahead of the public anger, financial regulators have continued to urge banks to find ways to benefit customers, such as cutting commission fees.

Late last month, a joint letter from 18 local banks was sent to the FSS where they agreed to cut major service charges, including discounts of up to 50 percent for using ATMs.

Woori Bank currently has the most complicated transaction service system with 195 types of charges, followed by Kookmin Bank and Hana Bank, with 135 and 116 fee categories, respectively.

Woori plans to get rid of all unnecessary service fees and Hana has decided to scrap the 600 won fee charged for wiring money outside bank hours.

Shinhan Bank said it would charge 800 won for withdrawing more than 100,000 won in cash from non-Shinhan ATMs, down from 1,200 won.

By Kim Yon-se (kys@heraldcorp.com)