Which bank in South Africa charges the highest fees? And which is the cheapest? The latest banking survey found Absa to be the dearest, and Standard Bank to have increased their fees the most. Here's more.

Bruce Whitfield:
In is most basic terms the bank charges research that we have done is based on a rather slovenly banking habits of a South African household with an income of R500 000 a year. They use the internet, they occasionally draw cash from branches and ATMs, they write cheques, and they go about their business using credit and debit cards. It is the third year of the research, which was commissioned by Finweek, and they tasked Horwath Forensics to carry out this particular research.

Now broadly bank charges for our family are rising at FNB and Absa but only slightly each year, Standard Bank has seen a spike upward and Nedbank has seen its fees more than halve since 2005 when its fees were by far the most expensive. Most banks encouraging their customers to use a package of transactions; on that basis we found Absa to be the most expensive, surprisingly, and I say this reservedly, Nedbank the cheapest and Standard Bank did see the biggest annual increase.

Terence Hatzkilson who is a director at Horwath Forensics carried out the research for Finweek and he is with us in the ?World at Six? studio. The truth with research and any research project is that you can drive a truck through the assumptions and that is something important I supposed to say it up front.

Terence Hatzkilson:
Absolutely, thanks Bruce good to be here. You are correct although the assumptions are the same for all the banks so the assumptions may be flawed but all the banks have to deal with those assumptions and they had to deal with them last year and the year before.

Bruce Whitfield:
These are precisely the same assumptions that were laid out in 2005 so what it has enabled us to do is draw some pretty graphs and those pretty graphs are pretty in some cases and not so in others.

You look at some of those graphs for example and the Nedbank example stands out where our family was paying close to R500 a month in bank charges in 2005 that is down to about R245 now. Standard Bank has seen some fairly sharp increases but if you look at the trends, I mean the key observations from your perspective as the person who was commissioned to do this research.

Terence Hatzkilson:
I think I will summarise it in three categories. Firstly the pay-as-you-transact option.

Bruce Whitfield:
In other words people who don't buy the package options but go in and swipe their debit card and credit card ?

Terence Hatzkilson:
Exactly, exactly as it says, you pay as you transact. The rankings from 2006 to 2007 have remained exactly the same. Absa was the cheapest last year and they are still the cheapest this year. Interestingly to note though although Absa is the cheapest on the pay-as-you-transact option they are the most expensive on the package option.

Bruce Whitfield:
Now, is there any way in which you look at that and you can actually understand as to why that is the case?

Terence Hatzkilson:
I think it is based on their client profile. They are trying to market to their major clients and how they would think their clients would transact. So they would push the pay-as-you-transact option rather than the fixed fee package.

Bruce Whitfield:
And the spike in the Standard Bank costs? I mean it was up 26 percent in terms of the package option and as we know Standard Bank aggressively pushes the package option when clients go into branches.

Terence Hatzkilson:
Standard Bank claims that around 80 percent of its customers use the package option. If you look at the trends across all banks, the fees have gone up for all the banks except for Nedbank and I think FNB in one category. So all the banks have raised their fees this year but Standard Bank has raised it more than the other banks.

Bruce Whitfield:
Let?s have a look at a couple of issues raised in this particular piece of research. One essential part of the research was when you went to two branches, last year I think it was Cavendish and in Sea Point and this year you went to Sandton City and to Hartebeespoort Dam.

You decided to get that particular perspective on this. Your experiences were quite varied; one thing I noticed though was that bank staff really were not as clued up as they should be about the products they were selling.

Terence Hatzkilson:
I think compared to last year the service did improve, we did note improvements, however I think if you look at the Sandton City branches the service levels were fairly consistent. The service levels in Hartebeespoort were probably not up to scratch.

Bruce Whitfield:
So you get a very clear difference between a more rural community and an inner-city urban upper end community.

Terence Hatzkilson:
Correct and that was why we did it that way. We wanted to look at branches outside a major Johannesburg metropolitan area and so we chose that area.

Bruce Whitfield:
Was there a big difference between the figures that you found when you went into the branches, you consulted the staff, you said here is my profile, this is the way I bank, and is there a difference between what you found there on the advice that they gave you, the brochures you got and the call centres you spoke to between what you got at head office?

Terence Hatzkilson:
Our final figures agreed completely with that of the head office but to get there we did have to do some corrections. I think Standard Bank we agreed with completely, the head office agreed to the branches.

The other banks we had to do some we'll call it tweaking until we agreed with their numbers and that is because I think if you look at the pay-as-you-transact option, that is fairly simple but when you look at the package options there are intricacies and rebates and different fee structures and different options available and you try dissect through that it makes the analysis more complicated and that is where we struggled.

Bruce Whitfield:
In your opinion, was it as complicated this year as last year to do this research?

Terence Hatzkilson:
It was probably slightly less complicated but still complicated. Now we have had the training, we have had the experience and it is not a walk in the park. It is still a fairly complicated exercise, absolutely.

Bruce Whitfield:
Terence Hatzkilson, don't go away we are going to talk to Louis von Zeuner, group executive director at Absa, and also to Rob Shuter, who is the head of retail bank at Nedbank.