Bank charges for household accounts have fallen substantially as a result of the legislation in control of charges passed a year ago, according to figures presented by Supervisor of Banks Rony Hizkiyahu to the Knesset Economic s Committee yesterday.
The figures show that the cost of the basket of the most popular current account services (including overdrafts) at the five largest banks is NIS 16.1 per month, representing a fall of 9.5% in comparison with the situation before the law, when average monthly charges were NIS 17.8.
The most expensive bank for charges is First International Bank of Israel (TASE: FTIN1;FTIN5), where customers pay an average of NIS 23 per month (NIS 276 annually). Next comes Mizrahi Tefahot Bank (TASE:MZTF), at NIS 18.1 per month, and Israel Discount Bank (TASE: DSCT), at NIS 17.5 per month. At the two largest banks, Bank Hapoalim (LSE: BKHD; TASE: POLI) and Bank Leumi (TASE: LUMI), which between them account for 70% of bank customers, the average monthly charge is NIS 14.6, compared with NIS 18.8 before the law.
Of the two, Hapoalim is the cheaper. Its customers pay on average NIS 13.9 per month (NIS 167 annually). At Leumi, monthly charges for the services basket total NIS 15.3.
It was also reported the average monthly charge for using a credit card is NIS 4.85 at Leumi Card and NIS 4.86 at Isracard. Visa Cal is more expensive: its average monthly charge is NIS 10.18.
Hizkiyahu said the aim of the reform was to encourage wise consumerism among the public. "We're still not there and we have some way to go," he said. Following the reform, average spending on banking services is lower in Israel than the global average. Bank of Israel figures presented to the committee show that average annual spending on charges in Israel is €55.6. The annual average is €57.9 in the EU, €58.3 in Asia-Pacific countries, and €49.4 in North America.
Published by Globes [online], Israel business news - www.globes.co.il - on July 1, 2009
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