Last year, National Commercial Bank of Jamaica (NCB) collected $10.5 billion in interest payments on loans to clients.

But it also collected $5.9 billion in fees and commissions that are charged against customer accounts and layered atop transactions with the banks, eating into savings.

The adjustment of fees and charges for services by local commercial banks, led by NCB, have increased their non-interest income significantly as a portion of total bank earnings, even as the chorus against the expensive fees grows.

By NCB's own account, it cost the bank just $1.2 billion to collect those fees in its financial year ending September 2008, leaving profit from fees of $4.7 billion - the equivalent of 43.5 per cent of operating profit.

In 2007, net gains from fee and commission income was $3.76 billion or 44.8 per cent of operating profit.

Bank of Nova Scotia Jamaica, or Scotiabank, whose profits were even higher than NCB's, also collected billions in fees, but was somewhat more restrained on charges.

Last year, in its financial year ending October 2008, the banking group netted $3.8 billion from fees and commission income - representing 29 per cent of operating profit - having spent $1 billion to collect the extra funds.

BNS and NCB together control more than 70 per cent of the commercial banking sector.

Big difference

There is, however, a big difference in the profile of the clients that each bank tags with big transaction costs.

NCB said the growth in non-interest income was attributable primarily to increases in the fees collected on a higher number of transactions through electronic banking channels - ABMs and point-of-sale machines.

Last year, while BNS levied some $2.46 billion of charges on retail customers, who are usually those with personal savings and chequing accounts, and mortgage-related loans, NCB collected $1.4 billion from this group. Credit-related fees earned Scotiabank just $839 million, but was worth $3.64 billion to NCB.

Fees on commercial transactions added another $1.3 billion to Scotiabank's coffers while NCB earned $860 million from a category designated as 'other'.

So complex are the banks' fee structures that the Consumer Affairs Commission has embarked on a project aimed at 'alerting' customers to the transaction risks they face in their dealings with the bank by publishing a survey of the fees.

The first weekly survey was due out Wednesday, but missed its launch date.

Revised schedule

Scotiabank Jamaica, however, published a revised schedule of fees in the first quarter of this year, detailing 107 different charges, including monthly account servicing charges, cheque leaves, standing orders, money orders, loan application fees and much more.

The NCB Fee Guide is a 13-page document detailing 89 fees and charge rates for credit cards alone. Other fees and charges numbered 208.

In some cases NCB's charges were higher, applying for example, a payroll charge of $350 to $450 per employee account credited, while for BNS each payroll item was $220.

avia.collinder@gleanerjm.com