Bank fees report ‘misses the point’

THE small-to-medium business lobby group ISME has dismissed the new report on fees and charges for businesses by the Financial Regulator as “missing the point”.

While the survey found wide variations on fees and charges between the banks, ISME said that was not the issue for most Irish firms.

ISME’s surveys have shown a huge gap between what small to medium-sized firms pay in interest on their overdrafts compared with the rest of Europe.

In Ireland firms who do not come into the big corporation category are paying typical rates of between 8% to 9% on their overdrafts.

That compares with 4-6% in Europe, said ISME chief executive Mark Fielding.

Not only are Irish firms paying more than their EU counterparts, he said, the gaps between the cost of banking for small firms here and their larger counterparts had also increased sharply.

Over 15 years that gap has grown 120% and the average Irish firm can be paying up to 5.5% more on its overdrafts than big business.

The report shows interest on overdrafts for companies is 6.85-9.25% among the banks surveyed by the regulator. Bank of Scotland Ireland was cheapest and Permanent TSB topped the league. Other banks surveyed included AIB, Bank of Ireland, National Irish and Ulster Bank.

It said charges varied across business current accounts, with costs rising according to the amount of business done by each firm.