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Source: Reuters -
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Westpac Banking Corporation has become the second major bank to make a move on its exception fees in a bid to remain competitive.
Westpac in Australia and its St George banking brand said it would reduce fees across credit cards and personal and business accounts to $AU9 from current levels of up to $AU45.
The bank said its "across the board" reductions in exception fees would apply from October 1 to both personal and business customers.
"This includes account overdrawn fees, outward dishonour fees and credit card missed payment and over the limit fees," Westpac retail and business banking group executive Peter Hanlon said.
The group's exception fees range between $AU35 and $AU45.
The move comes after National Australia Bank Ltd (NAB) last week
abolished its $AU30 overdrawn account fee on its personal savings
accounts and personal transaction accounts, winning praise from its
customers, consumer groups and Prime Minister Kevin Rudd.
Westpac said the reduction "across all products", not just personal accounts, would benefit its five million personal and business customers.
However, it said it wouldn't completely abolish its fee because it cost the bank every time it honoured a transaction on an overdrawn account or processed a bounced cheque.
Hanlon said the group had reviewed its fees for the past six months, speaking to customers, small businesses and meeting with small business lobby groups.
After much research the bank found a $AU9 figure was more acceptable to a broader range of customers.
"(We were) trying to understand exactly what the issues were and by and large most people understand that there's a need for a fee to try and discourage poor behaviours," Hanlon said.
"But the resounding feedback we had from everybody was that the fees were just too high."
"We've tried in the past to explain those fees but obviously unsuccessfully."
Hanlon said Westpac would lose about $2AU00 million to $AU300 million a year from reducing its fees.
St George Bank CEO Greg Bartlett said the reduction was fair to every customer.
"I think it's fair and that's a principle ... it shows we do listen to our customer and listen to their feedback," Bartlett said.
"We believe it is fair that all customers can obtain the benefits from today's initiative, not just a small section."
Commonwealth Bank charges $AU30 to $AU35 in exception fees and ANZ charges $AU35.
It is not yet known if Westpac's move will apply to its customers in New Zealand. However, the Bank of New Zealand, which is owned by NAB, last week announced that it would no longer charge honour and dishonour fees.
