SOME FACTS ON BANK PROFITS AND FEES Sydney, 2 November, 2000: With the bank reporting season under way, the Australian Bankers' Association (ABA) is keen to see the current debate, on bank profits and fees, to be based on facts, rather than misinformation. Jeff Oughton, acting Chief Executive of the ABA, said: "We recognise there is concern in the community about financial services and the industry is looking to improve engagement on issues of concern. "However, over recent weeks, there have been numerous figures bandied about attempting to prove that banks are overcharging customers to the benefit of shareholders. This is contradicted by the facts." Facts on Fees: Depending on the service provider, up to three-quarters of customers do not pay any fees on personal transaction accounts, according to a survey of ABA members. For those that do pay fees, the financial services sector provides affordable banking to the community; The Australian Bureau of Statistics (ABS) found in its 1989/99 Household Expenditure Survey that the average Australian household pays $114 per year for a full-range of banking services, including fees on transactions, home-loans and savings accounts (equivalent to $44 per year for an individual); Also the ABS found, low-income households (income of $300 or less a week) are estimated to pay $41.60 per year for the full-range of banking services (or per individual $27 pa/ 50 cents per week). Banks also provide a great deal of support for many people with special needs. There are fee-free accounts offered by banks to children, people with disabilities, pensioners and students. Facts on profits: Fees paid by customers on personal transaction services contribute to only 1% of bank revenue. The Reserve Bank of Australia has found that the maintenance of bank profitability has been mainly achieved through cost reductions - not increases in fees and charges; Australian bank profits are in line with overseas banks. The Reserve Bank recently noted that return on equity (the broadest measure of corporate profitability) is about 17%, which is the same as in the United States and Canada, and below the 23% of UK banks; Australian banks have invested heavily in ATMs, EFTPOS, phone and Internet banking resulting in more convenience and value for customers than ever before. Not withstanding branch closures, banks are providing increased face-to-face services through GiroPost, supermarkets, newsagencies and pharmacies. Bank profits are shared with five and half million direct and indirect shareholders, many of who are retirees who rely on dividends for income. For further information contact: Heather Wellard ABA PR Phone: 02 8298 0411 Mobile: 0409 830 439     ENDS