Finweek Digs Deeper Into Bank Charges

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South Africa's revenue hungry banks have continued to pile on bank charges as they try to make up for lost interest revenue.

This is one of the key findings from the 2011 Finweek Bank Charges Report which will be released on Friday. Now entering its seventh year, this annual research into the charges banks levy on their customers has played an important role into the discussion around charges which are regarded as amongst the highest in the world.

"Bank charges are obviously an emotive issue in South Africa and a combination of the global financial crisis and the decreasing demand for lending has meant that banks are going to be looking for alternative ways including fees and penalties to boost their revenue line," says Finweek editor Marc Ashton.

One of the challenges around preparing the research has been the challenge of comparing products on a like for like basis from the banks.

Traditionally this has been an incredibly difficult task and for the duration of the research Finweek has employed the services of Horwath Forensics to conduct and verify the results of the study which uses only the channels to which you have access: branches, brochures and call centres.

Key findings of the 2011 study include:

Standard Bank remains is the most expensive in terms of both package and Pay as You Use (PAYU) options.

FNB is cheapest, but has the highest penalty fees.

It costs twice as much now to bank with Absa and Standard than it did seven years ago.

Banks continue to push ever greater numbers of clients to the default of buying package options

On average banks are driving up the annual costs of package options in double digits.

Penalty fees are becoming an increasingly important revenue source, especially on cheaper package options.

Call centre and branch staff remain broadly incapable of accurately interpreting official literature.