Banks’ fee income from households increased by 10 per cent over the year to June 2024, mainly reflecting fee income from credit cards and personal loans, the Reserve Bank said in its annual analysis of fee income in banking.

Bank fees comprise a relatively small share of banks’ total revenues. Fees contributed around five per cent of reporting banks’ total revenue in 2023/24; this share was similar to that of 2023 but lower than the few years prior.

The increase in fee income around the industry in FY2024 “was the first annual increase in total fee revenue in seven years” the RBA said. 

By type of customer, large businesses continued to pay the largest share of fees, comprising around 40 per cent of total bank fees. 

Households and medium-sized businesses each paid around one-quarter of total bank fees, while small businesses accounted for a little less than 10 per cent of total fees.

Credit cards are the largest source of bank fees paid by households. Strong growth in credit card fee income in 2023/24 “largely reflected increased use of domestically issued credit cards at overseas businesses” the RBA said. 

Higher credit card fee revenue was mostly in the form of foreign currency conversion charges. 

Fees from personal credit (excluding credit cards) increased strongly year on year. This reflected growth in establishment and transaction fees, consistent with the increase in personal credit growth over the year.