Johannesburg - Fin24.com readers reacted with shock, outrage, and even grim acceptance following a Fin24.com news article on Thursday, which said South Africa's big four banks had racheted up fees 16% in the past 12 months.
Research into what banks charge for services was commissioned and published by Finweek, Fin24.com's sister print publication. In its report, Finweek said that Absa was charging the most for services such as ATM withdrawals.
A reader called Pretorian provided an international perspective to the story, saying: "I am still living in shock as I am paying monthly charges for maintaining account service charges to withdraw money in ATMs. This is totally new as I had never paid such banking charges when I stayed in other countries."
Other readers used the article to tell their own personal experiences, such as a reader called Paul: "I was with STD (Standard Bank), which I adored as a student with its free transactions.
"I have since joined Investec, who increased their charge from R140 to R200 a month. I personally go for Capitec. It is way better then the Big 4."
Said RippedOff: "I have been with one of the big four for over 30 years, and was surprised to learn that they charged me almost R800 to email me a copy of my bank statement for the previous tax year! Is this Standard? ...yip! - Beware, PAYT [pay as you transact] is not the only way to compare bank charges."
Interestingly, South Africa's big four banks - Absa, Standard Bank, First National Bank and Nedbank - found some supporters among Fin24.com readers.
"Any of you complaining ever thought of what it costs to run a bank?" asked John. "Especially when people can't repay? The bank always repays your deposit.
"And please do not compare to overseas banks. Firstly, they are not cheap: how come they are more profitable than ours? Must come from somewhere?
"Secondly, offering a first world banking service in SA is very expensive. Cost of transporting cash is 10 times compared to Europe."
A reader called Juice asked: "A question I have to ask is haven't a number of overseas banks recently been bailed out/collapsed?"
Double-digit hikes
The issue of whether the Competition Commission had a role to play in governing fees among South Africa's largest four banks - which control about 90% of the market - was raised by readers.
"Banking affects every single SA citizen but the Competition Commission is more worried about the price of cement. What a joke," said Ken.
In its report, Finweek said clients of Absa, the country's largest retail bank with 11 million users, suffered the worst of the fees increases.
It upped fees on the PAYT basis by 18%. This is the second consecutive time Absa has topped the fees-increases league.
"Perhaps more ominous is that fact that since our research was first published in 2005, Absa's fees have increased by an astonishing 69% on a PAYT basis and 39% on its package option," said Finweek in its commentary to the bank fees study.
Standard Bank charged its clients 15% more year-on-year on a PAYT basis and an extra 10% for its package option.
First National Bank upped its fees by an inflation-busting 21% on the PAYT and package basis after posting conservative, single-digit increases in previous years.
Nedbank, which charged the highest fees in 2005, had not made inroads into market share despite a concerted effort to reduce its fees, Finweek said.
Its PAYT fees remain 6% below its 2005 levels while package fees are 39% down on the amount charged in that year.
- Fin24.com