Australian banks in feeding frenzy

by Peter Mac

Service charges to rise, levels of service and employment to plummet — and 
profits to skyrocket! That's the message from the National Australia Bank 
(NAB), which last week announced plans to increase personal excess 
transaction fees from $2 to $3, reduce access to personal banking service 
by closing 100 branches and introduce fees for ATM, Internet, self-serve 
and staff-assisted phone transactions. It also plans to retrench 250 staff 
in the short term, and possibly another 750 in the longer term.

The NAB also plans to provide a graded system of free periodic 
transactions, allowing the greatest number of free transactions to those 
with the largest balances.

Describing the new NAB policies as "outrageous and excessive", the finance 
policy officer to the Australian Consumers' Association, Ms Louise 
Petschler, recently asked "how much more can banks be charging customers 
for accessing their own transaction accounts?"

The answer is, of course, as much as the market will bear.

In order to maximise their profits the major Australian banks, including 
the National Australia Bank, are attempting to eliminate personal service 
banking in favour of electronic transactions, and to attract the "big 
players" over those with relatively small balances (i.e. most of us).

The NAB's strategy has been so successful to date that it is now seeking to 
take over financial service interests in the United Kingdom.

The average household now pays an average of $299 per annum in banking 
fees, and the NAB's announcement has prompted renewed calls from the 
Finance Sector Union and other organisations for a social charter to 
safeguard customer needs and employee rights.

The banks have so far refused to consider such a move, and the issue has 
been treated with disdain by the Federal Treasurer, Peter Costello.

However, public anger over the banks' rapacious behaviour is mounting. A 
petition demanding such a charter was recently signed by some 1500 
customers outside the Melbourne Commonwealth Bank in a period of two hours.

The union has also won an injunction preventing the Commonwealth Bank from 
attempting to coerce employees into individual workplace agreements, and 
has been given the proxies of thousands of small shareholders in 
anticipation of the bank's Annual general meeting next week.