30% of households pay less than NIS 10 in bank fees

The calculation refers to commissions that households paid in 2006, and includes all of the main services for which households were charged commission.

By SHARON FABIAN, THE BUSINESS POST
Fully 49 percent of Israeli households pay less than NIS 20 a month on commissions for banking services, and 90% of households pay up to 10 bank commissions a month, according to figures revealed in an examination of commission payments conducted by the Association of Banks in Israel. The analysis was based on the commercial banks' real figures, which address 300 types of banking fees. The low payment for commissions stems from a reduction in the number of commissions relevant to household activity. The calculation refers to commissions that households paid in 2006, and includes all of the main services for which households were charged commission. In addition to the fees involved in managing a current account, commissions on banking services such as securities transactions, buying and selling foreign currency, transferring foreign currency from one account to another, as well as other activities, were also examined. The study shows that 30% of households do not pay more than NIS 10 a month for commissions, and 64% of them pay up to NIS 30 monthly on fees. ABI Executive Director Moshe Pearl said the examination conducted proves that households are not being harmed by the commissions. According to the ABI, the proportion of the banks' earnings from commissions is similar to internationally accepted levels. A study conducted by Italy's central bank reveals that from 1991-1998 commissions constituted 25% of earnings for banks in the Eurozone, and 33% of earnings for US banks. In those years, the highest percentage of earnings from commissions - 39% - was recorded in Britain. The lowest was in Spain -- 19%. Between 1999-2003, earnings from commissions in the Eurozone rose to 39%, and in the US to 43%. During those years, the highest percentage of earnings from commissions was in France, where it totaled 59%. The lowest was in Spain at 31%. The study quotes the findings of the Kesselman & Kesselman financial consulting firm, which conducted an examination through PricewaterhouseCoopers in various countries in Europe and in North America. The examination revealed that none of the countries supervised the commercial banking system's activity through commission price controls. Thus, for example, in Britain, Belgium, France, the Netherlands, Finland, Germany, Austria and Canada, commission prices are not supervised, while in Ireland audits are conducted of the denoted price of commissions without interference in their cost.