The Semiannual Report on Banking Service Fees was presented today to the Knesset Economic Affairs Committee

2012-12-BankFees-H1-2012-Jan3.docTo the full report

 

 

The Supervisor of Banks, David Zaken, today (January 1, 2013) presented the Semiannual Report on Banking Service Fees to the Knesset Economic Affairs Committee.  The report is based on reports by the banks and credit card companies of actual revenue from fees they collected in the first half of 2012.
 

 

In addition, the amendment to the Banking Regulations regarding fees comes into effect today, as part of which securities deposit management fees for makam are cancelled (see Appendix A to the main points of the report), management fees for money market funds are cancelled, limitations are placed on bank fees for securities transactions, and other fees for households and small businesses are cancelled.  The aim of this amendment is to increase competition for households' short-term savings and to increase transparency and fairness concerning the cost of banking services, including securities transactions.

 

 
David Zaken, Supervisor of Banks, notes: "The increased transparency in the cost of banking services and the narrowing of information gaps between the banks and their customers will lead to increased competitiveness in the banking system. Customers' understanding of the service provided to them and its cost will ensure complete fairness in the relationship between banks and their customers.  In order to assist citizens in this matter, the Banking Supervision Department has put many explanatory materials on the Bank of Israel's website regarding banking fees, how to calculate them and advice on proper and intelligent conduct with the aim of saving unnecessary bank fee payments.  The Banking Supervision Department will continue to act in order to narrow the information gaps in the banking system, and will regulate bank fees when "market failures" are found".
 
 
 
The main points of the report:
·                     During the first half of 2012, the average monthly cost for a current account for households in the banking system[1], based on a standard activity profile[2], totaled about NIS 14.50, a decline of about 2.4 percent from the 2011 full year figure (a 3.6 percent decline in real terms).
·                     A comparison by a standard activity profile in a current account (teller-executed and customer-executed transactions) reveals wide variance among the banks:
            In the banking system at large, Bank Yahav is the least expensive (monthly cost: NIS 6.30) by a significant margin. At the other extreme, Mercantile Discount Bank (with a monthly cost of NIS 21.80) and Arab-Israel Bank (monthly cost of NIS 19.90) are the most expensive.
            Among the five major banks, Bank Hapoalim is the least expensive (NIS 12.10 per month) and Israel Discount Bank is the most expensive (NIS 16.70 per month).
·                     In the first half of 2012, the average actual monthly expenditure for common current account services for households in the banking system amounted to about NIS 14, a decline of about 4.7 percent compared to 2011 (a 5.9 percent decline in real terms).
 
Comparison between banks:
·                     In the banking system at large, the average monthly expenditure for an account at Bank Yahav is the least expensive (NIS 2.80), while it is most expensive at Poalei Agudat Yisrael (PAGI) (NIS 28.30).
·                     Among the five major banks, the average monthly expenditure for an account is least expensive at Bank Hapoalim (NIS 13.60), and most expensive at First International Bank (NIS 17).
·                     During the first half of 2012, the average actual monthly cost for holding a domestic, international, or “gold” card in the banking system, amounted to NIS 6.90, an increase of about 2.2 percent compared to 2011 (a 1 percent increase in real terms).
·                     Wide variance was also seen in relation to the actual fees for holding a credit card:  In terms of the average monthly cost per card for holding a domestic, international, or "gold" card, Isracard was least expensive (NIS 4.50) and ICC (Cal) was the most expensive by a significant margin (NIS 10).
 

 

The Bank of Israel urges the public to examine and compare the terms offered by the various banks and has made a variety of tools available to consumers on its Web site, including savings tips, calculators, and comparative tables: click here


[1] Excluding the Bank of Jerusalem and U-Bank.
[2] A profile of monthly activity for an active household account, based on 10 customer-executed transactions and 0.7 teller-executed transactions. It excludes completion to a minimum fee, since there are many customers who are exempt from this fee.