BANK fees did go up last year. But the increases made across the commercial banking sector were no higher than in years past and, what’s more, the added revenue from fees was not enough to offset the fall off in net interest income experienced across the sector.

This, according to data released this week by the Bank of Jamaica (BOJ) — the regulator of commercial banks — from a special survey conducted on the fees and charges of commercial banks as at 31 August 2010, which was aimed at enhancing public information and market transparency, along with end-of-year prudential indicators.

Business Observer analysis of the data showed that income from fees (other than from loans) increased from year-earlier levels by $885 million, or 12 per cent during the first nine months of 2010.

On the other hand, net interest income fell by $2.5 billion, or 7.5 per cent over the comparative periods while pre-tax profit made collectively by the seven commercial banks reviewed, fell to $13.4 billion during the nine months to September 2010 from $15.2 billion a year prior.

The increase in fees did, however, cover a larger portion of overhead cost — non-interest expense less provision for loan losses. Other fees to overheads increased from 27.2 per cent to 28.2 per cent.

Against public jabs made by the Fair Trading Commission and the commerce minister, Karl Samuda, that bank fees are too high, the Jamaica Banking Association (JBA) argued that recent surveys did not account for costs that banks absorbed in providing the full cost of a service.

The BOJ data appears to support the JBA’s claim.

The BOJ said in its report released this week that it will be publishing comparative reports reflecting the fees and charges as reported by the institutions, including those of building societies and licensees under the Financial Institutions Act, such as merchant banks.

The JBA also informed the central bank that it will take initiatives to enhance public education and disclosure in relation to fees and charges through the development of a Voluntary Code of Conduct, which will establish minimum standards and which is intended to be a part of a wider JBA Code of Conduct expected to be developed by the end of the first quarter of 2011.

The proposed code “will address such matters as minimum notice periods for introduction of new or increased fees, review frequency and on-going customer awareness and education”.