Following the release of the Survey of Bank charges, the big three commercial banks in Jamaica, the National Commercial Bank, Scotiabank and RBTT have responded to the report.

In a release sent to the media, Annette Atkinson, manager, corporate communications and brand at RBTT said the bank’s prime lending rate was lower than reported and that its credit card rate is not the highest in the industry, as reported.

“With respect to reports in the media regarding the Survey of Bank Charges conducted by the Consumer Affairs Commission (CAC), we wish to clarify two aspects of what was reported,” Atkinson wrote. “As at August 1, 2010, RBTT Bank Jamaica Limited’s prime lending rate stands at 18.25 percent.” The survey which was conducted between July 29 and September 17, 2010, reported that the bank’s prime rate was 20.5 per cent, the highest in the industry. However, at 18.25 per cent, RBTT’s rate is equal to that of First Caribbean International Bank (FCIB), a rate which is still higher than that charged by NCB or Scotiabank.

Atkinson also pointed out that while the rate quoted for RBTT’s unsecured credit card is correct, this rate is not the highest in the industry. The Survey therefore correctly quoted RBTT’s credit card interest rate at 49 per cent. The rate for Scotiabank was quoted at 40 per cent, FCIB, 29 per cent, First Global Bank (FGB) 42 per cent and NCB at 39.7 per cent. No rate was given for Pan Caribbean Bank.

NCB has challenged claims that the loss in interest income was offset by an increase in fees and that fees are being used to drive revenues given the fall off in interest income following the Jamaica Debt Exchange (JDX). According to NCB “the dollar value of increased income from fees since JDX is $74 million, compared to the decreased interest income of $2.68 billion”. NCB said the changes in fee income was driven primarily by the 19 per cent increase in the number of loans booked, the 11.5 per cent increase in branch transactions and the eight per cent increase in credit and debit card activity. NCB reports that overall, fee income has increased just six per cent for the year.

According to the bank, fee income represented 19 per cent or $4 billion of the bank’s revenues in 2009 and 22 per cent or $3.6 billion of revenues in 2010, “not due to charging higher fees, but primarily due to the reduction in other income sources, namely securities and trading income”.

NCB also claims that the minimum balance fee of $180 for balances below $2,000 does not affect the majority of its customers. The Survey showed that the fee was up 125 per cent over the $80 charged last year but NCB said its Start for students and Midas Plus for personal customers do not attract a minimum balance violation fee. Customers can also use Keycard Cash, a pre-paid card, if they do not want to maintain an account that attracts a fee. The bank said over 146,000 customers have signed up for Midas Plus, while another 50,000 are benefiting from fee discounts and waivers through its Gold Club, Start, NCB First Class and NCB SME accounts.

NCB said the minimum balance violation fee applies to the Gold Club for seniors because the account attracts the highest interest of all savings accounts and interest is paid monthly. “This is an incentive for our seniors to save and not go below $5000,” NCB said.

Scotiabank has said it will issue a formal statement once it receives a copy of the Survey which was launched on Tuesday by Karl Samuda, Minister of Investment and Commerce at his St Lucia Avenue office in Kingston.

“We are currently awaiting to receive a copy of the CAC survey so that we can fully asses the results and therefore be in a better position to comment,” said Jacqueline Sharp, chief financial officer at Scotiabank. “However we would like to impress that Scotiabank currently goes through a detailed process when reviewing fees and determining whether they need to be adjusted which we will continue to be guided by.”