1. The data shows that the increase in bank fee revenue was largely driven by all customers – households and businesses – completing more transactions with banks and buying more products and services, not by fee increases;
   
2. Bank profitability in the relevant year was the lowest it has been since 2004 – in fact bank profits last year were down 22% on pre-crisis levels.

Steven Münchenberg, Chief Executive of the ABA, said: “There is no doubt that the fee revenue numbers look big and that’s because billions of transactions flow through the banking system each year. But we calculate that households are paying on average 13 cents a week more on fees. This could hardly be described as a gouge.”

“We also know that as most fees are paid by wealthier households, low income earners are paying less than the average.”

For businesses (both large and small), bank service fee revenue increased by 13% - large businesses drove around 70% of that increase. Growth in bank service fee revenue from small businesses increased 6.6% which was unchanged from last year.

Mr Münchenberg said: “Businesses are doing more business with banks and completing more transactions which led to the increases in bank service fee revenue.”

“Large businesses, not small businesses, drove most of the increase and this was a direct result of the impact of the global financial crisis (GFC). Large businesses turned to the solid and reliable banks for loans when capital markets did not function during the GFC. We also saw appropriate re-pricing for risk as the economy slowed and business bad debts increased.”

Mr Münchenberg said any commentary on the banking industry should be based on the facts and that’s why we urge those who debate these issues to read a copy of the ABA’s report “Fees for Banking Services” which provides a full analysis of the banking service fee revenue.

The Fees for Banking Services report can be found on the ABA website at:
www.bankers.asn.au/Fees-for-Banking-Services-Report-2010