A broad range of household, business and government bank fees fell in the year to June 2021, due to a combination of lower activity in some markets and fee reductions in others.
According to the latest Reserve Bank report on Bank Fees in Australia, fees charged by banks through their domestic operations fell by 5 per cent to A$14.7 billion in the year to June 2021, with falls in fees charged to households, business and government.
Fees charged to households, which make up 23 per cent of total fees, fell by 11 per cent. This was mainly due to a fall in fee income from credit cards, deposits and personal loans.
The reduction was due to a combination of lower credit card and personal loan activity during the period, and the removal or reduction of fees on certain deposit accounts. A significant fall in ATM withdrawals cut fee income from that source.
Banks noted fewer instances of deposit accounts being overdrawn during the year, and a resulting fall in overdrawn and dishonour fees. In addition, many banks removed informal overdraft fees following the Hayne royal commission.
The bulk of fees from households are charged on housing loans, making up 39 per cent of total household fees, credit cards (32 per cent) and deposit accounts (18 per cent).
Fees from housing loans went up 13 per cent – the only area of household bank fees that rose. This was due to increased home lending activity during the period.
Fees charged to business and government, which made up 67 per cent of total bank fees in the year to June 2021, fell 3 per cent.
One area where there was an increase was in loan fees, which rose 2 per cent. The reflected the increased volume of business credit during the year, as the economy emerged from COVID.
Merchant service fees fell 1 per cent, reflecting the impact of ongoing international travel restrictions that limited transactions in Australia on cards issued overseas.
There are a number of series breaks between the 2021 bank fees survey and previous surveys. This is because the RBA started using its new Economic and Financial Statistics data collection last year, which replaced the bank fee survey it has used since 1997.
The new data increases the population of reporting entities and the coverage of fees charged. Growth rates have been adjusted for the effects of reporting changes.