Agência Brasil

Brasília - Revenues obtained by banks in return for services, such charging fees for issuing bank statements and checkbooks, represent the sector's third largest source of net profits. They lag behind only credit operations and purchases of government notes, according to a study published yesterday (20) by the Inter-Union Department of Statistics and Socioeconomic Studies (DIEESE).

The study, entitled "Bank Service Revenues," evaluates the impact of fee charges on bank profits and customers' income. It reveals that the increase in service fees paid by account holders is directly related to the inflationary control policy instituted in 1994. This policy reduced the banks' inflationary receipts and led the sector to look for other sources of profit.

According to the study, the inflationary receipts obtained by the ten largest banks in 1994 amounted to US$ 4 billion (R$ 9 billion), as against around US$ 395.45 million (R$ 890 million) in 2005. Service revenues, on the other hand, rose from 6.25% in 1994 to 12.7% last year as a proportion of net profits of the country's 11 largest banks, which earned US$ 10.574 billion (R$ 23.8 billion) in 2005 alone - an increase of 1,797% over the US$ 577.62 million (R$ 1.3 billion) they earned in 1994.

According to Ana Quitéria Nunes, a DIEESE technical specialist, bank profits derived from service fees exceed payroll costs. In 1994 service revenues were already 26% greater than personnel expenses in the country's 50 largest banks. This percentage rose to 102% last year.

In Nunes' opinion, the "exponential" growth of bank profits obtained by service fee charges "is one more way in which the financial system appropriates funds and exploits its customers." She emphasizes that "the lack of competition among banks and the immobility of customers are the chief factors behind the excessive fee charges and, consequently, the increase in bank profits." She goes on to suggest "that these fees be regulated so that society can also benefit from the banks' profits instead of being penalized."

Translation: David Silberstein