Summary of Costs and Benefits to Banks. We now summarise the main quantifiable and non quantifiable factors affecting banks. The quantifiable costs to banks of operating an account are difficult to assess, but have been estimated at around €40 per annum. Charges for basic accounts may now be of the order of €50 per annum, suggesting that xxxxx might make a small surplus of around €10 per annum from each account. If, however, charges for Basic Bank Accounts were capped, say at the level of €12 seen in Belgium, then banks would make a loss per account of just under €30. The capping of fees would result in a transfer of benefit from the banks to the consumer. There are few other non quantifiable costs to banks, unless the increase in the number of accounts is so large as to require the provision of additional infrastructure such as cash machines or branches. Turning to non quantifiable benefits to banks, these include the following: • Improved perception of banking • Increased customer base for selling of additional services • Reduced costs and risks from cash-based payments • Contribution to capital Finally, we can use the typical net quantifiable benefit of €10 per consumer to estimate an overall benefit to banks in Europe. We estimated in section 2 of this report that there were between 11.58 and 18.19 million consumers without a bank account where the lack of an account might be an indicator of financial exclusion, and a further 11.87 million in countries where the penetration of bank accounts was low. These amounts suggest net benefits to banks of the order of €115 million to €182 million from increased penetration of bank accounts at current prices. If, on the other hand, the costs of a Basic Bank Account are capped so that there is a net cost to banks of €30 per account, then if these accounts were to be provided to the 11.58 to 18.19 million consumers who might be financially excluded, the net costs to banks would be of the order of €350 to €550 million per annum. In total there are 30.06 million consumers without bank accounts. If we apply the whole of the annual benefit of €10 to all these consumers, the total benefit to banks would be €300 million across Europe as a whole. On the other hand, if the cost of the basic bank account was capped and there was a net cost of €30 per consumer, the overall costs to banks would be €900 million across Europe as a whole. However, the estimates shown in this paragraph must be treated with caution, because of the potential need to extend bank networks ...
