When the Australian stockmarket closed at yet another record high last Friday, our big five banks were valued as follows:
And where does about $200 billion of that value come from? The
long-suffering and highly indebted Australian banking consumer, of
With every member of this exclusive club enjoying returns of more than
1300% since the Commonwealth Bank first floated in 1991, you’d think
the $18 billion or so in pre-tax profits generated each year would be
Sadly, you’re badly mistaken if the front page splash in The AFR yesterday is to be believed. The story opened as follows:
The nation’s biggest banks are set to reap more than $10
billion in charges this year as they look to offset cut-throat
competition in the mortgage and deposit market with sharp fee increases
for households and businesses. Stockbroking analysts believe the banks
will increase their fee income by between 7 and 9% in 2006 as they
raise charges on a range of products, including ATM transactions,
telephone banking, Eftpos withdrawals and bank cheques.
Have you noticed how cartel members are all going in exactly the same
direction. No bank is proposing to cut fees to attract customers.
I’ve long given up on Treasurer Peter Costello, RBA governor Ian
McFarlane and ACCC chairman Graeme Samuel when it comes to protecting
consumers from this cartel. Banking might be nominally heavily
regulated but all members of the Australian cartel operate with a
government licence which may as well say “feel free to abuse your
position and charge as must as you can get away with”.
Is there a fee increase that would awake this trio of soundly sleeping
bank watchers from their inertia? It’s at moments like these that you
really wish Paul Keating was running the country again. The Latham Diaries revealed that Keating would be tempted to return to Parliament if he could “f*ck the banks”.
It seems that perhaps the only option left is an anti-bank campaign
against Peter Costello in his seat of Higgins at the next election.
Nothing else seems to work.