Banks are not charities

A number of contributors and commentators are on record as having attributed HSBC's substantially improved profits to a presumed increase in bank charges. They also seem to imply that HSBC is responsible for the other banks' decision to raise their charges accordingly. The reality is that if you expect to receive a service then you have to be willing to pay for it. There are costs involved in any transaction and as a customer I would not expect the bank to absorb these costs.

A bank is not a charity or an NGO though it is true that most commercial banks in Malta contribute hundreds of thousands of liri to worthy causes such as the protection of our environment and our heritage and the well-being of Maltese children. Indeed the banks should be applauded for their support.

As for charges I find it amusing that the public is content to pay hefty fees to lawyers, specialists and others while they still expect financial services to be provided pro bono. I for one am more than happy to pay a fee for efficient and timely service.

What seems to go unnoticed is that the increase in charges has been accompanied by the introduction of alternative delivery channels such as telephone banking and internet banking. These have made it possible for clients to handle their banking requirements in the comfort of their home or office and at whatever time suits them most. Besides the added convenience these alternative channels also make it possible to save on many charges since no bank staff is involved. Indeed one particular bank is even paying a small token to its clients whenever an alternative delivery channel is used!

The banks' increased profits are a result of improved efficiency, cost-cutting, new products and a greater attention to the cross selling of life assurance and investment products. The charges levied account for a small percentage of the banks' profits.

Another interesting development that has occurred since HSBC came to Malta is the increase in competition for commercial loans and home loans. I believe it is fair to say that, as a result of HSBC's competitive approach in this area, the procurement of such finance has become much more accessible and both the interest rate charged as well as the loan charges have been reduced.