Banks have used global crisis as excuse to 'gouge' customers
Australia’s major banks have used the uncertainty caused by the global financial crisis as an excuse to "gouge" customers with high fees and interest rates, it has been suggested.
A new study by the University of Canberra points to bumper profits and continuing high pay packets at the banks as proof that the major lenders have lied about their "poor financial health" and the necessity of higher charges on customers.
"They (Westpac, the Commonwealth, NAB and ANZ) have been crying poor throughout the global financial crisis and yet official data shows that they have been misleading, to put it mildly" said Milind Sathye, professor of banking and finance at the university.
The researchers used data from the Australian Prudential Regulatory Authority which showed that rather than tightening their belts during the crisis, banks actually increased remuneration for management and staff from $14 billion to $16 billion a year – a 14.2 per cent increase.
In contrast, the report observed that customers have been hit with higher mortgages repayment costs, higher account fees and lower savings rates.
The news may interest Aussies who wish to compare savings accounts and other financial products in search of better deals. Last week, the Daily Telegraph’s Banks versus Battlers Survey ranked Westpac – which recently announced a half-year profit increase of more than 30 per cent to almost $3 billion – as the worst bank for customer satisfaction.
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