Banks are taking less out of our pockets for the first time on record. Reserve Bank figures show bank fee income from households slid 16 per cent in 2010, due largely to the removal or reduction of late fees and fees for overdrawn accounts.
Bank income from so-called exception fees charged to households roughly halved with the fees taken from deposit accounts sliding $395 million and the fees taken from credit cards sliding $220 million.
Late payment fee income from housing loans also fell despite an increase in the share of loans overdue.
Revenue from automatic teller machines also fell after the introduction of explicit charges for the use of ATMs in March 2009 which encouraged a flight from “foreign” ATMs to “own bank” ATMs which are generally fee-free.
Australian Bankers Association calculations put the average weekly bank fees paid by households at households $9.73 - down $2.13 from the year before...
Chief executive Steven Münchenberg said households were paying less even though they were using banks more often.
“At a time when budgets are under pressure from rising prices, this fall is a welcome result,” he said.
In contrast fee income from businesses increased, climbing enough to offset the loss of fee income from households. Income from facilities fees charged to maintain business lines of credit climbed 25 per cent. Income from merchant service fees charged from accepting credit and debit cards climbed 2 per cent.
“Prior to the global financial crisis, growth rates for bank service fee revenue from businesses were low,” Mr Münchenberg said. “Some lenders failed because their business model could not be sustained. That meant that businesses increasingly turned to banks to provide finance.”
Published in today's SMH and Age
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