Responding to public concerns about high banking fees, president of the Bankers’ Association of T&T (BATT) Anya Schnoor yesterday gave the assurance that there is no price collusion among banks.
Speaking before Parliament’s Joint Select Committee (JSC) on Finance and Legal Affairs, she said fees and service charges have been adjusted only three times in the last ten years and took place independently of each other.
“Charges and bank fees are determined by individual pricing considerations which includes operating costs, competitive product placement, influencing customer behaviour, alternate channels available and investment in technology.
“Banks are not price fixing and fees and charges are reflective of the cost for providing the services,” she said.
Schnoor said in some fee categories there were no increases in the last ten years since online and mobile services are free.
She added that fees and charges represent seven to 11 per cent of total revenue for banks.
“The sector’s profitability per customer and per account has declined over the last ten years and there are many reasons for this, the primary being the tremendous operating costs in all banks over the same period.
“Net interest margins in the banking industry are at their lowest level in over a decade. In all major loan categories interest rates today are lower than they were a decade ago,” she said.
In addition to the eight commercial banks operating in T&T, there are other entities which provide financial services, including credit unions and insurance companies, she said, so competition is fierce among all players.
She said commercial banks have kept their fees at relatively competitive levels compared to other regional banks.
Schnoor added that the banking industry played a critical role in the economic development of T&T and over the past decade had provided more than $4.6 billion in taxes to Government and more than $11.8 billion in dividends to shareholders, the vast majority of whom are residents of T&T.
“When we look at the GDP of Trinidad and Tobago, financial services is perhaps the second largest contributor to GDP and consequently provides significant tax returns for the country,” she said.
“The health of the financial services sector is therefore critical.”
Schnoor assured depositors that their money is safe and said stakeholders also need not worry as banks are “well-managed and adequately capitalised” to meet any unforeseen shocks which could impact on the viability of the industry.
Concerns were raised by committee member Clarence Rambharat about the efficiency of customer service.
Schnoor said while the banks may not be able to get everything right all the time, the industry pumped some $900 million into technology to meet the requirements of customers, especially those who preferred online banking.
She said despite tremendous economic challenges, banks collectively increased spending by 20 per cent on corporate social responsibility measures in the past three years.
Commenting on job losses in the industry, she said aggregate data showed that over the last 10 years staff had increased from 6,500 to 7,400.
