While banking in South Africa is competitive there is a need to bring down bank costs, Nedbank’s retail managing director Rob Shuter said on Thursday.
Nedbank became the first of the big four banks to testify in front of the competition commission’s banking inquiry public hearings into bank fees and the national payment system (NPS).
”We are committed to bringing down banking fees,” Shuter said, citing several examples where Nedbank has cut costs over the past year.
However, while the banks had shown ”strong profits” in the past few years it had been as a result of exceptionally robust economic conditions and was unlikely to be repeated in the near future.
”I believe competition is fierce in the banking industry and it’s growing with increased competition,” Shuter said.
He said returns for banks in South Africa were comparable with same-risk markets elsewhere in the world.
On the NPS, he said it was vital for banks to cooperate to ensure a reliable system. New entrants into the system were welcome as long as it was regulated.
”Nedbank’s view is that access to the NPS for both banks and non-banks is important, provided the integrity of the system is maintained. Consumers need to trust the fact that unauthorised parties cannot access their money. This is one of the fundamental principles that the rules of the NPS seek to uphold,” he said.
In direct contrast to Shuter’s submissions, Jan Mahlangu of the Congress of South African Trade Unions (Cosatu) said bank charges and costs were still too high.
”Bank charges and costs are punitive, exploitative and unjust,” he told the commission on behalf of the Financial Sector Campaign Coalition.
Citing an example of a worker who earns R2 800 a month, he said bank costs on average amounted to R135 per month.
”That is about 5% of his salary, which surely is to high,” Mahlangu said.
He argued there should be a direct link between bank charges and the cost of the service provided, and that some banking accounts should be free of charge.
The public hearings will continue in Pretoria before moving to Durban and Cape Town. More public hearings will be held in March and April next year. — Sapa