SMALL BUSINESS BANKING – AUSTRALIAN BANKERS’ ASSOCIATION ATTENDS SYDNEY MEETING Sydney, 25 October, 2002: The Australian Bankers’ Association has attended a meeting on small business banking in Sydney to listen to the experiences of small business operators. David Bell Chief Executive of the Australian Bankers’ Association (ABA), said: “Small business are important customers of the banks, are significant contributors to the economy and employ more than three million people. ” “Today’s meeting in Sydney was a good opportunity to explain to Small Business Ministers, bureaucrats and small businesspeople the competition in the small business banking market and the large choice of products offered to small businesses by financial institutions.” “It was also another opportunity to emphasise that the increases in bank fees have been more than offset by decreases in interest rate margins.” “For an individual small business, the interest rate margin savings on a $100,000 overdraft written in 2001 compared to 1997 are $1,530. The sector as a whole is saving around $630 million dollars a year on variable rate loans because competition is squeezing interest rate margins.” Background for editors on the competitive small business banking market: ·       There are: -57 institutions providing approximately 720 different debt finance products -44 institutions providing 72 different kinds of business transaction products. (source: Cannex) ·      Interest margins on small business variable loans have declined by 2.14 percentage points since 1995 to 3.27 percentage points in 2001. (Source RBA) ·      Small business acceptance of credit card transactions is growing in popularity, as there was a 23% increase in transactions acquired from merchants. (Source RBA) ·      Increases in bank fees need to be weighed against the increase in the volumes of banking transactions and the growth in the market. ·         The KPMG report “Small Business Banking in Australia” can  be downloaded from the ABA site – www.bankers.asn.au For further information: Heather Wellard ABA PR Phone: 02 8298 0411 Mobile: 0409 830 439 ENDS