Australia’s four largest banks have scrapped cash withdrawal charges for all users, as the banking industry tries to salvage its reputation after a series of scandals.
Commonwealth Bank of Australia, the nation’s biggest lender, said yesterday it would immediately remove the AUD2 (USD1.60) fee for all users of its 3,400 branded automated teller machines across the country. Westpac Banking Corp. and National Australia Bank Ltd. followed hours later, while Australia & New Zealand Banking Group Ltd. said it would halt the charge from early October.
The announcements came two days after Treasurer Scott Morrison announced draft legislation to hold bank executives to “heightened standards of behavior” and bolster trust and confidence in the financial system. Battered by scandals – from giving poor advice to wealth-management customers to allegations of manipulating a benchmark swap rate – lenders have been trying to head off calls by opposition lawmakers for a wide-ranging inquiry into the sector, and fight back against the government’s decision to hit them with a AUD6.2 billion levy over the next four years.
“The Commonwealth Bank has taken the march on that issue,” Morrison told reporters yesterday, referring to the elimination of cash withdrawal charges. “But it’s important that we continue to take action now right across the full suite of issues that are needed to ensure that our banking is fair, it is stronger, is more accountable and is more competitive.”
Australians made more than 250 million withdrawals from the ATMs of banks other than their own last year, Commonwealth Bank said. Removing charges for such transactions could save customers AUD500 million a year, the Courier-Mail newspaper reported yesterday, adding that it will cost the bank, known as CommBank, tens of millions of dollars annually and put rivals under pressure to follow suit.
“Australians have complained for some time about being charged fees for using another bank’s ATM,” said Matt Comyn, Commonwealth Bank’s group executive for retail banking services. “We have been listening to consumer groups and our customers and understand that there’s a need to make changes that benefit all Australians, no matter who they bank with.”
The lender’s Bankwest cash machines and international cards are excluded, Commonwealth Bank said on its website.
Opposition lawmakers have called for a so-called royal commission into the banking industry, with some urging a breakup of the nation’s biggest lenders amid claims that a lack of competition allows borrowing costs to be kept too high.
“There is no way that CommBank ever would have made this move without the public pressure on them over multiple scandals and the threat of an impending royal commission or parliamentary commission of inquiry,” said Greens Party’s treasury spokesman Senator Peter Whish-Wilson.
ANZ had been “actively working on how we provide fee-free ATMs” before deciding to remove charges for non-ANZ users of its 2,300-strong cash-machine network from October, said Fred Ohlsson, ANZ group executive. “This is another example of acting on customer feedback as well as genuine reform from the industry.”
Non-Westpac customers will no longer be charged an ATM withdrawal fee when they use one of the Sydney-based groups 2,925 machines, including those of its St. George, Bank of Melbourne and BankSA units, Westpac said yesterday.
“This is a good outcome for customers,” Andrew Hagger, National Australia Bank’s chief customer officer of consumer banking and wealth, said in a statement. “We know it has been frustrating for them to be charged to withdraw their own money from an ATM.”
Jason Gale, Bloomberg
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