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NCB increases fees to offset expenses

Published:Sunday | May 16, 2010 | 12:00 AM

Following through on a plan to offset loss of other income and rising operational costs, National Commercial Bank (NCB) has increased transaction fees across the board by up to 100 per cent, with no distinction made for business conducted in-branch or through electronic channels.

Now, when customers enter a branch of the bank to make a withdrawal, it will cost J$200 for accounts with a balance of less than J$50,000.

That fee has climbed 100 per cent from J$100. At the ATM, a withdrawal is now 57 per cent more costly.

For those clients conducting business or personal transactions requiring a letter of undertaking for motor vehicle, land or other real-estate purchase, the cost has moved from J$3,900 per letter to J$6,000, representing a 53.8 per cent increase.

For guarantees issued, the charge is also J$6,000 per letter, up 20 per cent from J$5,000.

Annual fees for credit cards have also been increased, with the Lovebird Keycard suffering the biggest jump for renewals - from J$1,300 to J$2,420, an increase of 86 per cent.

Tax increase

The size of the increases has irked some clients who have complained to Sunday Business that the adjustments appear larger than the normal annual revisions.

NCB did not return calls for comment on the level of increases, but had signalled from February that the adjustments would include, but not be confined to, the one-point increase in general consumption tax (GCT) from 16.5 per cent to 17.5 per cent. The tax is built into the fees.

Other factors, the bank said, were the effect of higher electricity costs and petrol prices on its overall operations.

"NCB, like most other institutions, will see an increase in operational costs resulting from the new tax on additional services, including electricity and gas. It will cost us more to provide some products and services," Belinda Williams, the bank's manager for corporate communications, said then.

The banking group, which has the largest network of branches nationwide, reported in February that total operating expenses had shot up by J$500 million in its last quarter to J$4 billion.

On the new fee schedule, a certification of balance is now J$1,100, up 36 per cent from J$810.

One of the smallest increases was for manager's cheques, which now cost J$350 per item, up nine per cent from J$320 if taken from funds in an NCB account, or J$880 per item when purchased with cash, up less than four per cent from J$850.

Local funds-transfer fees also moved from J$300 for remittances ranging up to J$10,000, to J$500 for up to J$15,000.

Under payroll services, the new charge for deposit to employees' accounts, J$300 per transaction to NCB accounts, up from J$200.

Bill payment at your ATM will no longer be free, but now costs J$10. ATM withdrawals cost J$58, up from J$37, and each transaction at a point-of-sales terminal is now J$12.10, up from J$8.61.

The charge for credit card cash advances, however, remains unchanged, except for the one-point increase in GCT.

Meanwhile, specials are being offered to NCB Gold Club members, Midas cardholders and small-business clients, including discounts on manager's cheques, standing orders and safety deposit boxes. SMEs can, on request, access free payroll services, free cheques, special service-charge waivers and discounts on standing instructions.

Record net profit

Last year, NCB collected J$6.3 billion in fees and commission income but spent only J$1.4 billion on their collection, to net J$4.96 billion.

It, therefore, retained about 78 cents of each dollar spent by clients and customers to consume the bank's services.

Fees contributed close to half of the record J$10.2 billion in net profit made by the bank.

But with profits affected last quarter by a mix of one-off payouts and lower income from segments, such as insurance premiums, NCB Chief Executive Patrick Hylton is promising more aggressive income generation and cost cutting to preserve the eight-year profit surge.

The bank is also bracing for a drop in investment income consequent on the Government's debt-exchange programme.

Williams maintained in February that NCB's fees had been found by an August 2009 survey by the Consumer Affairs Commission to be competitive, compared with other commercial banks.

"Any resulting increase in fees will see us remaining competitively positioned in the market," she said.