Banks reaped $12 billion in fees in 2014, with credit cards providing the strongest source of growth.
Fees earned by the banks were up 2.8 per cent from the previous year, but the Reserve Bank says that is not because the fees are higher.
Instead, the growing use of credit cards by both consumers and businesses was the main reason for higher income, the RBA said in its annual review of fees.
Households paid $4.2 billion in bank fees, or $9.01 per week on average, which is steady with the previous three years.
Income for the banks from fees on mortgages and deposits was down from 2013, but up almost six per cent on credit cards.
That was due to the rising number of credit cards on issue, the RBA said.
According to the Australian Bankers' Association, there were 119,000 more credit card accounts in 2014, and credit card spending was up seven per cent to $281 billion.
Credit card fees for foreign exchange conversions are also on the rise, as more consumers buy goods from overseas.
Fee income from businesses made up more than two-thirds of the $12 billion earned by the banks in 2014, the highest proportion on record.
Fees from credit cards were also a key driver of growth in the business sector.
The Australian Bankers' Association said fees made up 39.5 per cent of bank profits in 2014, continuing the fall in fee-to-profit ratio since the global financial crisis.
"Fees as a proportion of bank assets, income and profits are now at a record low," the association's chief executive Steven Munchenberg said.
SURGE IN CREDIT CARDS LIFTS FEE INCOME FOR BANKS
* Total income from fees up 2.8 pct to $11.96b in 2014
* Households paid $1.4b in credit card fees, up 5.9 pct
* Foreign currency conversion fees on credit cards rose 4.3 pct, late payment fees were steady and over-limit fees dropped
* Households paid $1.2b in mortgage fees, down 2.1 pct
(Source: Reserve Bank of Australia)
Share
