How much do banks earn on their customers?

25.04.2018 11:57|Marcin Lipka

"Do Poles get the short end of the stick by saving in banks? The total interest rate on current accounts and household deposits is only 0.9%, which is much lower than inflation. Additionally, we still have to pay taxes from this "profit" and what remains has to be paid to the bank in the form of fees and commission," writes Marcin Lipka, Conotoxia Senior Analyst.

Marcin Lipka, główny analityk Cinkciarz.pl

At a time of low interest rates, new tax burdens and Bank Guarantee Funding, banks have found a way to improve their financial performance. They reduce interest costs - interest rates on customer deposits and increase their revenues from fees and commission, which are of course paid by customers.

17.9 billion PLN in fees

According to the NBP data for 2017, banks charged fees in the amount of nearly 18 billion PLN (excluding income from interest at the level of 58.4 billion PLN), which is by 9.2% more than in the previous year. This includes a number of fees related to the services attached to accounts, home and abroad card use and commission from loans.

Each month banks charge customers 4.74 PLN for maintaining their account or 4.54 PLN for using a payment card. Withdrawals from national cash machines may be free of charge. Sometimes, however, commission reaches as much as 4% of the withdrawal. If you need cash abroad, you will have to pay as much as 4.5% for using an international cash machine.

Using your funds for purchases in a foreign currency or during trips abroad is also burdened with extremely high currency conversion commission. It amounts to 2.82% on average, which means that when we spend, for example, 1,000 EUR, the booking this transaction will be subject to a fee worth approximately PLN 118 on average. One of the leading banks charges a customer with 5.9% for currency conversion, which means that if consumers spend 1,000 euros, they will automatically pay an additional 250 PLN.

Commission alone eats up customer profits

In February, the average interest rate on deposits and current accounts was 1.6% and 0.5%, respectively, and according to the National Bank of Poland, banks pay 0.9% on average on an annual basis to depositors (private and businesses).

In 2017, interest expenses for banks amounted to 15.5 billion PLN. A year earlier, banks paid 340 million PLN more for depositor money trading. Since commission and fees amounted to almost 18 billion PLN on average last year, customers incurred more banking costs than they received interest for their savings.

Such calculations do not, of course, include the income from interest, which in 2017 amounted to 58.4 billion PLN and was higher by 8.5% than in the previous year. As a result, together with fees and commission, the banks collected over 76.3 billion PLN from their customers and paid them only 15.5 billion PLN interest in the form of deposits.


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