The major Australian banks earned $2 billion more in fees and charges from their customers while hiking interest rates independently of the Reserve Bank.
New research published yesterday showed that in the year to June, the most recent figures available, banks accrued income from fees and commissions of $22.6 billion.
The result was well up on $20.48 billion they earned in the previous year and came as they were lifting, of their own accord, rates on mortgages, credit cards and personal loans.
The spate of rate hikes started in January when each major bank moved independently of the Reserve Bank, blaming the global financial crisis for increasing wholesale funding costs.
The round of rate hikes occurred on top of the Reserve Bank of Australia's two upward movements in official rates in February and March.
The figures published by the Australian Prudential Regulatory Authority did not show the impact of the 300 basis points in cuts ordered by the Reserve Bank in the past four months.
However, some of the banks have not passed on the full cuts to customers, with ANZ and Westpac keeping some of of the reduction from the 100-basis point cut by the RBA this month in their profit margins.
The level of account fees paid by Australian customers has reached a record high, with at least $1.4 billion spent in the June quarter on transaction and lending activity.
MWE Consulting analyst Mike Ebstein, an independent researcher, said the increase in fees came as customers placed more money with the major banks.
"The year end June total is up on the year end of June 2007," Mr Ebstein said.
"But the last quarter went against the annual trend and the 10.4 per cent growth in fees and commissions was well below the growth in assets and deposits."
Despite the increase in fees, Australians have turned into fiscal conservatives, choosing to hoard cash out of the volatile financial markets.
Before the recent interest rate cuts, banks were offering deposit rates above 8 per cent in a bid to reduce their reliance on volatile funding markets. However, as official rates have been cut, deposit rates have been slashed.
