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Contrary to what might be initial perceptions, this site is not all about Australian bank bashing, although there are enough facts in our Bank Horror Stories section to justify why one might want to do so.

The information we provide on this site is designed to be not only useful and informative, but also to show you how you can Save money and even Make money from the banks. And we're not just talking about a few dollars here and there on saved bank fees - we're potentially talking about $10's of thousands of dollars and years saved off your mortgage as one example. Take a look at the articles Banks Behaving Badly and Mortgage Reduction Tips just to get a glimpse as to why we can make this claim. 

There's been a lot of "big bad bank" media coverage over recent years. Is the ill feeling that many Australians seem to have towards the banks justified? What valid justification could we actually have for hating the banks? Well, barring what you will find in our Banking Horror Stories section, let's look at a few hard facts.

The two most common issues identified as a source of consumer discontent are those of ever rising bank fees and the extensive closure of bank branches and accompanying lowering of service in the quest for higher and higher profits.

BANK FEES:

Bank fees have been rising consistently for over 6 years now. Fees and charges are now levied on just about everything that moves. The latest figures available show Australian banks raked in $2.7 billion dollars in fees from the household sector in 2002, a 17% increase over the $2.31 billion they collected in 2001. Recent Financial Services Consumer Policy Centre findings show that small business is paying $2.5 billion each year in bank fees. Fees charged by banks to small business are currently rising at the staggering rate of 18% per annum, and this has been going on for years.

BRANCH CLOSURES:

On the subject of branch closures, APRA data shows that in June 1990 there were 6921 Bank Branches and 7712 bank agencies. By June 2001, there were only 4712 bank branches and 5043 agencies. That means more than 33% or 1/3rd of branches and agencies have been closed over that period. This of course impacts upon employment (not to mention the fact that we are all keenly aware of how long we usually spend in bank queues before being served). Despite spiraling profits, the banks contribute less and less to the overall economy in terms of employment. In 1990, the finance industry accounted for nearly 5% of total employment in Australia. Despite considerable growth in the banking sector since that time, 10 years on, as a consequence of extensive redundancies in the industry brought about by branch closures and cost cutting, the finance industry was only providing just over 3.5% of total employment, with an 18% decline in numbers employed occurring in the last six years to the end of 2002.

PROFITS:

And yet, in terms of profitability, recent KPMG figures list Australia's banks as the second most profitable in the world on a return on equity basis, second only to UK banks, and more profitable than U.S., Canadian and Japanese banks (in the case of the Japanese Banks, Australian banks were more than 4 times more profitable on a return on equity basis).

More data on bank fees, profits, and branch closures can be found in our article Bank Statistics.

BANK OVER-CHARGING AND DISPUTES:

Let's look at some other facts. The Australian Banking Industry Ombudsman (ABIO) is the arbiter for the majority of disputes between consumers and their banks. This is where people can turn if they have been overcharged or otherwise suffered financial loss due to their bank. Their 2001 Annual Report states that 7,107 cases were received, an increase of 14.6% on the previous year. The Ombudsman's 2002 Annual Report states that 7,992 new cases were handled, a further 12.5% increase on 2001's 14.6% increase.

What were the most common complaints dealt with by the ABIO? Across all product groups in 2001, Transactions and Calculations was the most commonly identified problem area, representing 28.7% of the problems reported. In the Consumer Finance product group in the 2002 report, 8.2% of the disputes lodged with the ABIO relating to personal loans were for Calculation Errors and the Housing Finance product group was the main problem area investigated by the ABIO representing 31.4% of all investigations in 2002 (ref. articles Banks Behaving Badly and Bank Errors and ABIO - The Numbers Tell The Story).

When the RBA announces a change in official interest rates, ever noticed how long the banks can take to pass the rate cut on to your home loan? This "delay" can net the banks millions. And yet, if ever there's a rate rise, it's passed on virtually immediately.

The banks are well aware of public sentiment toward them. The solution in one instance was to invest a million or so dollars on some good PR. Remember the John Laws & Alan Jones "cash for comments" scandal a few years back? From 1997, the Australian Bankers Association paid $1.2 million to John Laws and 2UE. Lawsy also had direct dealings with the Colonial State Bank, as did Alan Jones. When the scandal broke, some of their "personal opinions" were finally exposed for what they really were: paid commercial sponsorship.

Wander through the different sections of this site. We trust you'll find it a valuable storehouse of information which could well save you some significant $$$.

Yours faithfully,

The I Hate Banks.com.au team

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