Banks cash in on fees but many customers are making the switch

AIB announced the end to free banking in Ireland two years ago, changing the banking landscape and breaking the idea of Irish people being married to their bank.

By Vincent Ryan Business Reporter

Although it is hard to quantify how much money banks earn per current account on fees, Simon Moynihan from Bonkers.ie reckons that AIB makes roughly €100 per year, while Bank of Ireland (BoI) is earning an average of €120 per current account.

“If you put people under enough pressure they will move. The cost of banking fees is now high enough to force people into changing, it is about €10 a month,” he said.

Mr Moynihan said that the most surprising development since the introduction of fees has been the lack of competition to try and lure people away from the AIB to other banks.

Only Permanent TSB have introduced a low to no fees bank account.

“One of the most interesting developments is that PTSB launched its nearly free current account and a huge number of people switched. Neither AIB nor Bank of Ireland have responded,” he said.

To add to that the closure of Danske Bank means that there are thousands of more current accounts up for grabs. Mr Moynihan said that consumers doing their research would opt for PTSB.

Permanent TSB has its annual results out today and has confirmed that it opened 40,000 current accounts in the last year alone.

Figures from the Central Bank confirm that in the first half of 2012 just shy of 4,000 people changed their banking account. In the same period of 2013 more than 4,500 accounts were switched.

Despite this concerns still remain about PTSB.

Fianna Fáil finance spokesperson, Micheal McGrath said that a letter he had received from ECB president Mario Draghi was aimed squarely at the PTSB.

Although it passed the Central Banks Balance Sheet Assessment, Deputy McGrath said that the ECB tests will be much more stringent.


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