The high bank profits being announced since the global financial crisis are obscene.
While many individuals and businesses are struggling, the profits being made by the banks are soaring.
In my work with newsagents I hear almost daily of the challenges of dealing with Australian banks: overdraft fees have increased dramatically, bank guarantee fees have increased exponentially and fees for basic services have also increased significantly.
Take bank guarantees. These are important to newsagents in shopping centres. Landlords require security and the bank guarantee was a good mechanism for providing this without having to deposit the cash – you could secure the guarantee against the business. Now, the banks either want the cash or if they do take the business as security fees I have seen are eight to ten times what they were.
Newsagents relying on bank funds and services are facing considerably higher costs and higher reporting and compliance demands today than two years ago. In some cases I have seen, the increase in bank related fees has been has high as twenty times.
On top of the extraordinary increase in fees, most banks have changed their rules as to security required for funding. This has seen some newsagents have to refinance elsewhere.
The banks are happy to do deals for our over the counter EFTPOS business yet gouge us for other transactions – especially in the light of the amount of small business friendly advertising they do.
The gouging by banks of newsagents and other small businesses is a reminder that cash is king. This is the way to push back. Rely on them less. While that may sound naive, it is the best step we can take to cut our bank fees and send them a message, Use them less and hurt them where it counts.
Further reading:
Why banks are failing australia. smartcompany.com.au. Robert Gottliebsen provides an excellent insight into the bank problem faced by many small businesses. Excellent reading!
How banks are using the GFC to cover up goughing. news.com.au.
Westpac can bank on fury. heraldsun.com.au.
Banks pounce on interest rate hike. abc.net.au.
Maybe the super profit tax should apply to banks, I’d like to see that. Gee I would even vote for uncle Kevin to see that. Westpacs $3b 1/2 yr profit make a joke of the protection taxpayers offered the big banks during the GEC at the expense of everyone else.
Luke you are spot on!!! The super profit tax is an insult to the mining companies when you see the sorts of profits being made by the “Big 4”!!! I could write a small novel on the treatment given to me by one of those banks that would horrify most people and make anything you have seen on ACA seem like a walk in the park. I would like to know the amount they are spending on telling people that they are their for small business….if they put that money towards serving small business and trying to help them get ahead instead of grabbing every possible $ they can then they would be on the right path….until then watch the profits SOAR!!!