Standard Bank will raise its transaction fees by an average of 4,65% in 2008, the bank said on Monday.
Increasing competitive pressure, rising interest rates and inflation were some of the reasons for the increase, said the bank’s CEO for personal and business banking, Sim Tshabalala.
He said the bank had to strike a balance between keeping its customers happy and providing a return for its shareholders.
A ”veritable slew” of competitors had entered the field, offering basic banking services, such as Woolworths, Shoprite Checkers and Bidvest.
The bank’s director of banking products, Keith Fuller, said: ”There’s a relatively healthy gap between inflation and the price increases.”
Since 2006, this gap had, however, been decreasing. In 2006 the bank increased fees by 1,97%, while annualised inflation was 3,9%, a difference of 1,93%.
In 2007 fees increased 2,85%. Inflation stood at 4,6%, a difference of 1,75%.
In 2008 the difference would be 1,55%, with inflation forecast at 6,2%.
Tshabalala would not comment on the Competition Commission’s report on banking charges, due to be released early next year. He, however, added that ”the issues are to be regarded gravely”.
Personal current account fees would increase by 5,8%, E Plan fees 4,4%, Mzansi account fees 2,30% and savings and investment accounts by 1,9%.
Fuller said more than two thirds of the bank’s customers that had E Plan accounts paid less than R35 a month. He said it was a ”very profitable” product for the bank.
The bank’s primary sources of revenue were account growth, followed by price. Fuller said banks relied ”to a significant extent on non-interest income”.
Other banks were expected to announce their fee increases later next year. — Sapa