Powered by MOMENTUM MEDIA
Powered by MOMENTUM MEDIA
SUBSCRIBE TO OUR NEWSLETTER SIGN UP
Powered by MOMENTUM MEDIA

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.

×

Warning

JUser: :_load: Unable to load user with ID: 2726
sme logo

Businesses digging deep as bank fees soar

wallet fee  wallet fee
2 minute read

Businesses contributed a much larger proportion of fees to banks than households in 2017, the latest figures from the RBA reveal.

Since 1997, the Reserve Bank of Australia (RBA) has conducted an annual survey of bank fees.

Advertisement
Advertisement

On the back of a small 0.7 of a percentage point rise in 2016, bank fees surged by 3.6 per cent in 2017, hitting $13.041 billion for the calendar year.

That rate of growth was almost twice the rate of inflation, which stayed below 2 per cent for much of the year.

Roughly two-thirds of the fee income came from businesses, contributing a collective $8.541 billion.

“Total fee income from businesses increased by 3.8 per cent in 2017, entirely reflecting higher fee income from small businesses,” the RBA report said.

“Growth in fee income was driven by increases in merchant service fees on card transactions and account servicing fees on small business loans. Fee income from deposit accounts and from other sources (such as fees related to bank guarantees and overseas transactions) also increased, while fee income from bank bills continued to decline.”

However, when it came to lending, rising fee revenues was attributed to increased lending to SMEs rather than higher fees for established borrowers.

“The increase in fee income from business loans in 2017 reflected higher fee income from small businesses, while fee income from loans to large businesses fell,” the report said.

“The increase in fee income from small businesses was driven by an increase in account servicing fees attributed to growth in lending volumes, which is consistent with the relatively strong growth in lending to smaller businesses over 2017.”

Around 90 per cent of these fees were paid to the big four banks.

Households, meanwhile, contributed $4.5 billion in fees, up by 3.1 per cent from 2016.

Fees and charges on personal credit cards showed “strong growth”, the RBA said, while fees on housing and personal loans were moderate, and fee growth on deposits remained flat, having fallen in the previous two years.

[Related: ]

Businesses digging deep as bank fees soar
wallet fee
TheAdviser logo
wallet fee
more from the adviser
ANZ CBA ta ANZ, CBA win half of AFG broker lodgements

The two major banks processed half of all home loans lodgements o...

down houses ta Stagnant cash rate shouldn’t deter borrowers: Aggregator heads

While the official cash rate remains on hold, aggregator heads ar...

AFCA new ta AFCA broker complaints drop in the ocean

The number of complaints made to AFCA against all brokers have re...

FROM THE WEB