Johannesburg - Absa is increasing its monthly "safekeeping charges" for wills by 20% and the annual fee to R84.
Nedbank charges R12.50 per cheque deposit on a credit card balance, whereas this was previously free of charge.
First National Bank (FNB) deducts 15% from a mortgage advance as a once-off, non-negotiable initiation charge.
These are only some of the complaints from dissatisfied bank clients in the current recessionary environment, where some banks are hiking fees to compensate for depressed growth in interest income.
Ironically enough, the current decline in banks' rental income is a consequence of their own decision to reduce advances. This decision related to the massive increases in bad debts banks were experiencing.
The latest interim results from Absa, Nedbank and Standard Bank all show a rising income from fees.
It's clear that Absa's profit margins are under pressure. This necessitated a hike in non-interest income. Net fees and commissions were 15% up at R6.9bn, now comprising 68% of the bank's non-interest income.
The biggest fee increase was for insurance products, often the insurance that a client is required to take for a hire-purchase contract for a vehicle or for a home loan. This was hiked by 26% - more than three times the current inflation rate - to R1.013bn.
The cost of credit cards also rose sharply - by 18% - reaching a total of R889m. Electronic banking services are now 18% more expensive, though the average client thinks the services are free. Total income from this source was R1.6bn.
On the nominal basis the biggest fee income was from cheque accounts. This ran to R1.6bn, an increase of 10% compared with 2008.
The higher fee income is partly the result of larger volumes of banking business, but in the past six months loan volumes contracted. Absa's net interest income, or what the bank earns through normal loans granted, such as home loans, was only 2% up at R10.7bn.
Absa's growing non-interest income contrasts with Standard Bank?s interim results. It admittedly shows that net levies and commission rose 5% and transaction fees on personal banking services a hefty 15%, but total net interest income was on average 15% more compared with 6% for the total non-interest income.
Nedbank, too, cannot escape the fees scrutiny. The bank traditionally had the highest fees among the four banks, but in recent years has driven a campaign to lower its charges.
According to its latest interim results its non-interest income was 8.5% up, to R5.3bn. Commission charges, chiefly transaction fees on the retail side, were 8.7% higher.
Chief executive Tom Boardman emphasised, in response to enquiry, that growing in the retail market is a core focus area for the bank. "In the past we lagged market share. The larger number of clients has already had a positive effect on fees charged. Price increases are moderate and the increase is chiefly owing to volume growth.
"We are currently the most competitively positioned retail bank in terms of pricing."
- Sake24.com
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