Interpac Business and Migration Solutions Melbourne Australia

(June 11, 2010)

BANKS used the global financial crisis to bolster their fee income from Australian businesses by nearly $900 million, new Reserve Bank data shows.

Businesses paid $7.63 billion worth of fees last year, a 13 per cent jump on 2008's $6.76 billion.

That was the fastest pace of growth since 2001. And fees to borrow rose even faster - the overall fee rise was moderated by a decline in charges on business deposits.

Fee income from business loans increased by 20 per cent in 2009 to $2.20 billion from $1.84 billion the year before.

And fee income from bank bills - which includes charges for arranging bank-bill facilities and accepting or endorsing bank bills - leapt by 28 per cent to $2.04 billion from $1.59 billion.

"The increase in fees on these facilities reflects the repricing of credit and liquidity risks," the bank said.

In particular, the fees on undrawn loan facilities appear to have risen significantly, the bank said. When fees from households were included, banks' total domestic income grew by 9 per cent in 2009 to $12.7 billion.

Australian Bankers Association CEO Steven Munchenberg said that about three-quarters of the fee increases paid by business were paid by big business.

"Credit was too cheaply priced before the crisis - for everyone," Mr Munchenberg said of the overall 9 per cent increase in fees - the steepest since 2003.

Explaining why businesses experienced a bigger increase in fees than households, Mr Munchenberg said as with the Reserve Bank, banks had re-priced for risk.

In a separate piece of research the Reserve Bank said ATM users had saved $120 million when withdrawing cash since "direct charge" reforms were introduced in March 2009.

The research confirmed analysis published by The Daily Telegraph last month which showed that in the year since reforms forced ATM owners to warn of fees before a withdrawal, consumers cut their usage of foreign ATMs by 18 per cent.

The research said prices of most foreign ATM withdrawals were similar to those before the reforms.

When a direct charge system was first proposed more than a decade ago, advocates said it would cut prices but, according to the research there appears little chance of that happening soon.

（Source from: news.com.au）