16 June 2016
Sydney, 16 June 2016: Over the past four years average weekly bank fees paid by households have remained steady, according to a new report from the Australian Bankers’ Association.
“Households are paying an average of $9 a week in bank fees – the same as what we were paying in 2004,” ABA Chief Economist Tony Pearson said.
“When it comes to transaction accounts – a product used by virtually every household – average fees are now at the lowest level in 15 years. Fees have fallen by $1 billion or 51 per cent since the peak in 2008, yet the number of transactions has increased by around 60 per cent over that same time.”
The ABA report, Fees for banking services, shows that total fees paid by households and businesses were $12.5 billion in 2015. This is an increase of 3.4 per cent over the year, which continues the low fee growth seen over the past six years.
“On any given day, millions of people and businesses will interact with banking products and services,” Mr Pearson said.
“Banks provide around six million housing loans and last year alone approved more than 900,000 new home loans. The number of credit card accounts also increased last year by more than half a million to 13.5 million.
“So, the growth in fees paid on home loans and credit cards is low given many more of these products are in the market,” he said.
Mr Pearson said banks provide almost one million loans to businesses.
“Growth in fees from businesses has been low over the past three years when compared with the increasing use of banking products and services,” he said.
“In particular, fees on business deposit accounts are at the lowest level since 1999.”
Mr Pearson concluded that the latest results show that fees are well contained and are at record low levels as a proportion of banks’ income, profits and assets.
“Banks are continuing to drive efficiencies to improve the products and services offered to customers,” he said.
The report is available on the ABA website.
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“Australian banks are certainly better equipped now than they were in the GFC. They’ve got 2 to 2.5 times the capital reserves put aside for a rainy day than they had in the GFC”
“The Australian Banking Association (ABA) welcomes the agreement reached today on the proposed safeguard mechanism reforms, given it paves the way for the passing of a critical piece of legislation for Australia.
“This is about engaging with the entire banking ecosystem in order to ensure the accessibility of the sector’s services are best serving our diverse community now, and into the future.”