Consumers pay lower bank fees

Households are paying lower bank fees than before largely because of a lowering of (or, in some cases, elimination of) penalty fees for common events affecting everyday accounts.

National Australia Bank led the repricing of many accounts in late 2009, and the industry-wide impact of this is evident in the data on bank fees for 2010 published by both the Reserve Bank of Australia and the Australian Bankers Association yesterday.

The RBA said aggregate fees paid by households fell 16 per cent, to A$4.2 billion, in 2010.

More than 80 per cent of this decline in total fee income was due to the reduced level of fees on deposit accounts.

Other drivers of lower bank fees paid by households include the increase in transaction accounts with no monthly fees and the introduction of direct charging at automatic teller machines, which has led to less frequent use of ATMs not owned by the customer's bank (or at least not on a network used by the bank).

The Australian Bankers Association said that in 2010 bank service-fee revenue from transaction accounts made up 28 per cent of total bank service fee revenue from households, down from 37 per cent in 2009 and from more than 40 per cent in the late 1990s.

The ABA analysis also drew on Australian Bureau of Statistics' data to show that the proportion of household expenditure on banks fees in 2010 was 0.61 per cent - down from a ratio of around 0.75 per cent in the four years prior.