Increase in Bank Fees
Australian consumers have been hit with increasing bank fees over the years that only look to continue rising. Home owners and business owners alike have both been affected by the numerous hikes that have occurred over the years.
Studies have shown that between the last three years, household fees have risen by 19.9%, while businesses have been faced with a rise of 31.3% during this time.
It was revealed by the Reserve Bank of Australia (RBA), that Australian banks earned the sum of $12.7 billion in fees just last year. $5 billion dollars was as a result of fees being charged for switching from a fixed rate loan to a standard variable one.
The RBA commented that, “A number of bank customers chose to refinance their fixed rate housing loans with variable rate loans, given the significant fall in the cash rate during the banks' 2009 financial year."
The RBA went on further to say that, “The increase in housing fee income was driven by establishment and early exit fees, with the available information suggesting that break fees on fixed-rate loans accounted for a significant proportion of the overall growth in fees.”
Findings also exposed the fact of a 17% increase in fees earned across home loans. This equalled a total of $1.23 billion. Personal lending fees also rose by 14% to $552 million and credit cards charges attracted an additional $1.43 billion (8%).
Businesses also suffered similarly with the massive rise in bank fees. An extra $7.6 billion was acquired by the banks, or 13%. The most dramatic fee climb was experienced by consumers with specific business loans, who were affected by a growth of 20% in bank fees.
The RBA commented on this by saying, "The increase in fees on these facilities reflects the repricing of credit and liquidity risks, in particular fees, on undrawn loan facilities appear to have risen significantly.”
Another study conducted by the Australian Bankers Association (ABA) found that $5.03 billion was charged in household fees. Broken down, this figure worked to an average of $11.50 per week for each customer. This had also increased by 13 cents or 1%, when compared to the previous year.
Australian Bankers Association chief executive Steven Munchenberg, argued that, people get a range of services for the $11.50, that's the provision of ATMs, branches, which is good value when you compare other utilities like your phone bill."
