Bank fees mean profits
The country’s four major banks have earned over a billion euros from commissions charged for banking transactions in the first half of the year. This amount includes approximately -350 million for retail banking fees. The relevant data relate to National Bank of Greece, Alpha Bank, Bank of Piraeus and EFG Eurobank. It is estimated that if the calculation included all credit institutions operating in Greece, the amount earned by banks from fees would rise to over -800 million at the end of the year. A significant portion of banks’ profits comes from an array of transactions on which they charge either a fixed fee or a percentage rate based on the amount involved. Some of the most common transactions – at either the counter or an ATM – include deposits and withdrawals, accounts that have remained inactive for a certain period of time, transfers and money orders, filing fees for loan applications, credit card subscriptions etc. The new era of retail banking confirms that no banking business involving staff and operational costs is now for free. And customers are often surprised by the – far from symbolic – fees that now apply for some banking operations that had traditionally been free of charge. Such practices have resulted in a large number of complaints, not only from consumer organizations but also individual customers. Bank officials counter criticism by citing European standards, arguing that in many countries certain transactions at the counter are simply forbidden. For instance, Alpha charges 9 euros every six months for administrative expenses for deposit accounts, either active or inactive, whose average balance is less than -300, while Eurobank charges -10 for the payment of a credit card issued by another bank. Financial statements issued by the four banks show that commissions and fees charged for transactions at the counter make up a significant part of banks’ rising profitability. Indicatively, as shown by detailed data for the first half of 2007, National earned -96.3 million in commission on retail banking transactions, as compared to -33 million from business and investment banking commission and -74.3 million from fund management commission. Alpha’s retail banking commissions amounted to -79.3 million. Eurobank earned a total of -302 million in commission, of which -235 million corresponds to foreign transactions. Piraeus earned income of -68.3 million from commissions. In defending their practice, bank officials argue that fees must be charged to offset operational, administrative and information technology costs, noting that in major banks around 40 percent of staff work at counters.
