The Supervisor’s report reveals: a drop in bank revenues from commissions in 2019


The Supervisor of Banks, Yair Avidan, submitted yesterday (Sunday) to the Knesset’s Economics Committee the periodic report on the prices of banking services for households for 2019. The data do not reflect the impact of the corona crisis, at the height of which banks cut interest rates and commissions.

According to the report, in the last 11 years the banks’ income from commissions has fallen in relation to assets at a cumulative rate of 34%. The decrease is attributed to the actions of the Supervisor of Banks, accounting implications from the sale of Isracard and Leumi Card (Max) and the implementation of the law to increase competitiveness and reduce centralization in banking.

According to the supervision data, the average monthly cost for a household and private banking account amounted to 2019 At NIS 26.9, a decrease of 0.7% compared to 2018. In the last nine years, the monthly cost has dropped by 17% according to the following breakdown: down of 39% Having the activity of the passer-by, And increase of 21% Credit card holders. The increase is attributed to card fee increases, to an increasing trend in the number of cards held by customers in a single account and to an increase in the volume of transactions and withdrawals in foreign currency.

Supervisor of Banks Yair Avidan (Photo: Bank of Israel Spokeswoman)
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An important step initiated by the Bank of Israel in August 2019 was the proactive addition of small businesses and licensed dealers to the basic or extended track service. The monthly cost of holding and using credit cards averaged NIS 14.5 per month, including card fees and additional costs for foreign currency withdrawals, transactions abroad and more. As of the end of 2019, the average number of credit cards per account is 1.63.

An interesting statistic concerns the comparison of rates of commissions in transactions and withdrawals of foreign currency by credit cards, as of the end of June 2020: the highest percentage for a foreign exchange transaction (3%) is charged by the credit card company Max. On the other hand, Visa Cal and Isracard charge the highest fees for withdrawing foreign currency (3.5%). The corona crisis has cut the credit companies’ income from these fees.

According to the supervision, The cost of doing a banking transaction through a direct channel is 75% lower than the cost of doing it through a clerk. This is why more and more customers prefer direct activity, which corresponds well with the activity in the corona era.

As of 2019, banks were required to add customers on an extended basis to the extended route, with the exception of Bank Yahav and Bank Masad. An extended fee track includes up to 50 transactions through a direct channel and up to ten transactions through a clerk, and its cost ranges from NIS 20 to NIS 30 at the various banks. The track is suitable for licensed dealers and small businesses and for households that perform a relatively large number of operations. A small business is an incorporated business with a turnover of up to NIS 5 million per year.

The lowest expenditure in an extended track is at Bank Yahav, while at Mercantile Bank it is the highest. Of the five largest banks, at Discount Bank and International, the expenditure is the lowest, while at Mizrahi Bank it is the highest.


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