 Australian banks earn much from loan reprising
$12.7 billion in fee income was made collectively by Australian banks for the last financial year. This income is brought about by rise in charges on loan reprising, home loans, among others.
According to the Reserve Bank fees income from home loans jumped 17% now reaching $1.235 billion. This is attributed to the refinance of home loans to move from fixed rate to variable rate loans, the direction most customers took when interest rates fell.
Much of the rise in charges on the business sector was driven by fees on current loans as banks re-priced their loan books to account for higher funding costs, the Reserve Bank of Australia's June quarter bulletin, released on Thursday said.
According to the central bank households paid $5 billion in fees to banks from year 2008 to 2009. The increase was driven largely by fees on home and personal loans and credit cards.
Personal loan fee income collected from households increased by 14%, and income from credit cards climbed by eight percent.
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