Rising margins erode satisfaction

Rising interest rates and negative coverage about fees are taking their toll on banks' customer satisfaction ratings. The latest Roy Morgan Research consumer banking customer satisfaction survey shows all but one of the 10 banks surveyed losing ground in May and all but three losing ground in the past three months.

The good run the banks have had since early this decade appears to have come to an end, with peak satisfaction levels reached at the end of 2007. The average rating of the big four climbed from around 55 per cent at the low point in mid 2001 to a peak in the low 70s.

How quickly they are able to regain their upward momentum depends on how soon the Reserve Bank starts easing rates and also how they handle the increasingly contentious issue of high fees for such things as late credit card payments and early mortgage termination.

Bendigo Bank still leads the field with 86.8 per cent of customers saying they are very satisfied or fairly satisfied with the bank.

A year ago Bendigo's rating was over 90 per cent. It has suffered the biggest drop in support over the past year - down 4.3 percentage points.

Bank of Queensland is ranked second with an 83 per cent rating, followed by Adelaide Bank, now merged with Bendigo (80 per cent), BankWest (78.7 per cent), Suncorp (77.7 per cent) and St George (77.2 per cent).

Among the majors ANZ has a rating of 75.3 per cent, followed by Westpac (72.3 per cent), Commonwealth Bank (67.9 per cent) and National Australia Bank (67.7 per cent).

Two years into his term as chief executive at CBA Ralph Norris has been able to hand on the wooden spoon.

Adelaide Bank was the only bank to record a rise in its rating in May, and Adelaide, BankWest and Westpac were the only three to improve over the past three months.

Even the building societies and credit unions, which enjoy strong customer loyalty, have slipped this year.