Westpac in New Zealand has followed the BNZ and slashed its "exception" fees for customers' accounts going into the red.
In a widely-tipped move, the bank yesterday said it would cut exception fees on all credit card, savings and transaction accounts, for both personal and business customers, from between $25 and $30 to $9 from October 1, which will cost the bank about $50 million a year.
The fees are charged when there are insufficient funds to make a payment, an account is overdrawn without an overdraft facility, or, in the case of credit card accounts, a due payment is late or an account exceeds its agreed limit.
Following the move by Australian parent on Monday, Westpac New Zealand will remove honour fees (now $25 per event). A fee will be applied when a customer becomes overdrawn without a pre-arranged facility, but this will be a single charge of $9 per month.
Last month, BNZ said honour fees, dishonour fees and unpaid bill fees on transaction and savings accounts, for business and personal accounts, would cease on September 1.
BNZ charges a $35 dishonour fee and a $20 honour fee.
Westpac chief executive George Frazis said it had become clear some of the fees were contributing to a negative perception of banks, as well as proving a particular burden for a small number of customers having difficulty managing their finances.
"In our view, offering the benefit broadly across our personal and business customers, including credit card holders, is the right approach and will provide significant relief."
However, it was still appropriate to continue to apply a fee for service in some instances, he said.
"It ensures we don't encourage customers to overdraw their accounts and pay additional interest rate charges."
