A 50% cut in the minimum fees and the introduction of current account tracks reduced fee payments by households in the first half of 2014, according to Bank of Israel figures published today. Households paid an average of NIS 12.50 a month, 7.5% less than in 2013. The Bank of Israel also checked fees according to a uniform activity profile, which also showed a 6% drop to NIS 13 in the first half of 2014.
It appears that the banks have found a way to partially compensate themselves for the lost income from current account fees. While these fees are on a downtrend, fees for holding a credit card are going up. Spending on keeping a credit card averaged NIS 7.40 in the first half of 2014, nearly 6% more than the NIS 7 average in 2013.
The fall in current account fees is also due to the introduction of current account tracks in April 2014. The Bank of Israel forced the banks to launch current account tracks, with a NIS 10 price control imposed on the cost of the basic track, much lower than the list price for the track's fee composition. The Bank of Israel says that since the tracks were launched, as of November 2014, 151,000 customers have signed up for the tracks.
An examination of the actual payment shows that payments are lowest at Bank of Jerusalem (TASE: JBNK): only NIS 0.80. The Bank of Jerusalem announced that it was granting an exemption from most fees. Bank Poaley Agudat Israel, on the other hand, which serves mostly the haredi (ultra-Orthodox) community, is the most expensive at NIS 23.90.
Of the five major banks, Israel Discount Bank (TASE: DSCT) was the cheapest with an average fee of NIS 11.90 per account, while First International Bank of Israel (TASE: FTIN) was the most expensive with an average of NIS 15.50. Discount Bank was formerly considered more expensive, but it appears that its previous action to lower its fees has improved its rating, and made the cheapest of the major banks in actual fees charged.
Published by Globes [online], Israel business news - www.globes-online.com - on January 6, 2015
© Copyright of Globes Publisher Itonut (1983) Ltd. 2015