Banks accused of overcharging businesses
(24 June 2013 – Australia) Following a report from the Reserve Bank of Australia (RBA) businesses are accusing the country’s banks of gouging them after it was revealed bank fees paid by the sector surged by a quarter over the past three years.
The total value of bank fees paid in Australia rose 4.3 percent to A$11.4 billion last year, according to the RBA.
Charges paid by households fell slightly, to A$4.1 billion, this was more than offset by strong growth in fees from business.
Fee income from business jumped by 7 percent to A$7.3 billion, and has surged by a quarter since 2009. Over the same period, the value of outstanding business loans increased by just 2.7 percent, figures released by the Reserve Bank on Thursday showed.
The increase in fees paid by business, which the Reserve described as ''substantial'', was attacked by the Australian Chamber of Commerce and Industry.
The peak body's Chief Economist, Greg Evans, said banks appeared to have increased their fees well beyond the underlying cost of delivering services to businesses, and they were using business customers to subsidise lower fees for households.
The Australian Bankers' Association said fee revenue from business had risen over the past year because of a rise in lending, especially to larger companies.
Banks' fees from business customers had increased sharply after the financial crisis because companies had turned to banks as a source of finance, it added.