Focus on costs and fee income pays dividends

US banks are reaping the rewards that inevitably flow from the lower costs associated with mergers and rationalisation.

Bloomberg also report that increased fee income is flowing through to the bottom line, in spite of low interest margins and high levels of competition.

From a shareholder’s point of view this vindicates the strategy of both vigorous attention to costs and productivity, at the same time as ensuring an alternative revenue source from service fees.

Some consumers may not like the transfer to user pays, but the convenience factor associated with 24 hour access, eftpos and telephone banking has convinced most customers to vote with their feet – or should that be with their cards?