A better deal on back of bank’s big profit

Bank customers who are paying high fees or interest rates should be negotiating a better deal in the face of a massive increase in profit by the country’s biggest banks, experts say.

Three of the four main banks this week reported a collective $2.15 billion profit as the economy gradually turns the corner and the risk of borrowers defaulting reduces.

Consumer New Zealand chief executive Sue Chetwin said the bank profits were “mind-boggling” and consumers should negotiate fees and interest rates when taking out a mortgage.

Consumers were more likely to complain about the number of fees they were charged and the high interest rate charged on credit cards, than the cost of individual fees. That could be due to most of the banks having dropped penalty fees for bouncing or honouring payments when there were insufficient funds in the account.

The Australian-owned banks also generally charged higher fees in Australia than in New Zealand.

But “they are incredible profits and it does leave you scratching your head about fees that they are charging ordinary consumers,” Chetwin said.

 

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