Notes on Bank Fees on Small Businesses – November 1999 List of tables

Chapters

Table 1: Small Business' Loan Fees

Table 2: Effective Interest Cost of Small Business Loan Fees

Table 3: Small Business Transaction Fees

Table 4: Banks' Fee Income in Australia

Table 5: Sources of Fee Income from Small Businesses

Table 1: Small Business' Loan Fees
(Average of Major Banks)
1994 1997 1998 1999
Loan establishment fee ($)
$50,000 loan 590 625 630 615
$100,000 loan 965 925 890 740
$250,000 loan 2,170 2,080 1,930 1,480
Overdraft fee (% p.a.)
$50,000 loan 1.20 1.20 1.20 1.20
$100,000 loan 1.10 1.10 1.05 0.95
$250,000 loan 1.00 1.00 0.90 0.65
Term loan fee (% p.a.)
$50,000 loan 0.60 0.60 0.65 0.75
$100,000 loan 0.35 0.35 0.40 0.45
$250,000 loan 0.20 0.20 0.25 0.25

Source: Reserve Bank estimates based on information provided by banks

Table 2: Effective Interest Cost of Small Business Loan Fees*
(Per Cent Per Annum – 1999)
Three-Year Term Five-Year Term
Overdraft
$50,000 loan 1.60 1.45
$100,000 loan 1.20 1.10
$250,000 loan 0.85 0.85
Term loan
$50,000 loan 1.20 1.00
$100,000 loan 0.70 0.60
$250,000 loan 0.45 0.40
* Estimated effective cost due to establishment and line/service fees of a fully-drawn facility.
Table 3: Small Business Transaction Fees
(Average of Major Banks – 1999)
Small Business Memo item:
Household fees
1994 1997 1998 1999 1999
Account-servicing ($/month) 11 10 10 10 5(a)
Number of free transactions (monthly) 30 40 37 35 8(a)
Transaction fees ($ per transaction)
ATM (own bank) 0.25 0.30 0.30 0.25 0.60
ATM (other bank) 0.25 0.95 1.15 1.30 1.40
EFTPOS – 0.30 0.30 0.25 0.50
PC-linked 0.30 0.10 0.15 0.25 0.10
Cheque 0.30 0.30 0.40 0.40 0.75
Counter withdrawal 0.25 0.40 0.55 0.65 2.15
Bill payment – 0.30 0.30 0.25 0.45

(a) For major banks which have this structure of fees on their main retail transaction accounts. For one major bank, the most popular option of its main retail account has no free transactions and no account-servicing fee. Transaction fees can be waived under certain conditions. The averages are rounded to the nearest 5 cents.

Source: Banks' brochures
Table 4: Banks' Fee Income in Australia
1997 ($m) 1998 ($m) Per Cent
Change
Households 1,095 1,410 29
Small business 1,395 1,610 15
Large business 1,400 1,490 6
Total 3,890 4,510 16

Source: Reserve Bank of Australia
Table 5: Sources of Fee Income from Small Businesses
1997 ($m) 1998 ($m) Per Cent
Change
Loans 475 585 23
Bank bills 285 265 −7
Deposit accounts 150 165 10
Merchant service and other fees 485 595 23
Total 1,395 1,610 15

Source: Reserve Bank of Australia