Australia’s banks made almost $12 billion from fees last year – that’s enough to buy 40 A380 super jumbos, build 17 Olympic stadiums or send the entire city of Lismore on a round trip to outer space.
Figures from the Reserve Bank show the banks’ income from fees from Australian households and businesses rose by a moderate 2.6 per cent to $11.6 billion in 2013.
The extra money rolled in largely because the banks provided more loans to more people and people spent more on their credit cards, the RBA said.
“The growth was driven by an expansion in banks’ balance sheets, with deposit and loan fees declining as a ratio to the outstanding values of deposits and assets, respectively,” the RBA said in a report on Thursday.
The big four banks alone made more than $27 billion in profits in 2012/13, making Australia’s banking sector one of the world’s most successful.
The Australian Bankers’ Association said while the banks were raking in more fee income, the amount of household spending on fees was at its lowest level since 1999.
This was because banks had reduced or abolished some fees while customers were choosing fee-free or cheaper banking options, he said.
“While we have seen a small increase in the total fees paid by households, this is in line with the increase in economic growth and the resulting increase in demand for banking services by individuals,” said ABA chief executive Steve Munchenberg.
The Customer Owned Banking Association, which represents credit unions and building societies, said the figures showed consumers needed to shop around.
“The RBA found that in 2013 banks’ fee income from households reversed a declining trend and grew by 2.3 per cent, driven by growth in credit card and personal loan fee income,” a spokesperson said.
“If fees paid by households for credit cards and personal loans are on the way up again, it’s time to look for a better deal.”
Law firm Maurice Blackburn has issued proceedings against eight banks over unfair bank fees.
The Federal Court in February found ANZ had illegally charged tens of millions of dollars in penalty fees for late payments on credit cards.
Both ANZ and Maurice Blackburn are appealing the decision.