Key business banking charges are as much as five times cheaper in Ireland than in the UK, according to a survey published yesterday. Barry O'Halloran reports
A study of 20 transaction charges carried out by Amárach Consulting for the Irish Bankers' Federation (IBF) found that in 17 cases, Irish banks were cheaper than their UK counterparts.
There were some extreme differences between bank charges on the two islands. The average charge for writing a cheque that bounces in Ireland is €8.50, while it is €45 in the UK.
Similarly, the average charge for stopping a cheque in Britain is €10.50, while it costs €3.53 here. The survey found that UK banks charge an average of €15 to allow businesses draw cash from branches other than their own, while it costs nothing here.
The UK was cheaper in three areas. The average yearly charge for a night safe there is €7.88 while it is €30 in the Republic. The UK annual standing charge for a business account is 94 cent, while it is €3.52 here. In Britain it will cost you €2.25 for presenting a cheque that bounces; it costs €4.15 here.
In general, the UK was two to three times more expensive than the Republic. For example, the average cost of standing orders was 63 cents in Britain, and 28 cents here. British bankers charged 56 cents for a direct debit while Irish banks charged 19 cents for the same service.
Amárach reviewed 20 transactions typically used by businesses covering cheques, cash and other services. The consultancy compared four banks from each country: ACC, AIB, Bank of Ireland and National Irish Bank in the Republic; and HSBC, Halifax Bank of Scotland, Royal Bank of Scotland and Lloyds TSB in the UK.
Recently appointed IBF president, Mr Diarmuid Bradley, of Permanent TSB, said the survey results showed the perception that Irish bank charges were high was mistaken. He also pointed out that the comparison with Britain was fair because Irish businesses either sold goods and services there, or they were competing with UK companies.
Small Firms' Association (SFA) director Mr Pat Delaney agreed last night that bank charges in the Republic were competitive. He argued that this was because section 149 of the Consumer Credit Act prevented banks from increasing charges without the approval of the Director of Consumer Affairs.
"We welcome the fact that the charges are low," Mr Delaney said. "But at the same time, we would say that it is vital that section 149 is retained.
"Some of the banks have said that there would be more competition without it, but the key thing for us is that it is retained."
