Consumers Sweat The Small Stuff Where Banking Fees Are Concerned

It's an age old axiom if you can't complain, find something to complain about.

And so it is with banking fees. Dating back to my days in financial services nothing riled the base up more than a hike in banking fees.

The usual, 'they're greedy' and 'they have too many profits' gurble-gibble-gabble would ensue.

But these same clients love to brag about the performance of Canadian banks in downturns though, right?

Here's my take on banking fees. Who gives a shit? Yeah, I *suppose* they can lower them but these are operating costs the bank doesn't need to eat. Energy is wasted railing against this. Not to mention telephone costs with people calling in talk shows to spew their 'anti-bank' rhetoric.

This is where the larger picture comes into play.

Don't get me wrong. I'm not suggesting banks deserve criticism - they do - but this is not one of them.

Let me tackle the 'too many profits' line. Would people prefer the government cap profits? Laugh, but I've heard (progressives naturally) call for CEO salary caps and even caps on profits. The left loves 'Caps' because it makes them feel secure and possibly warm and fuzzy.

Caps are for losers and they reward losers. It takes from the successful to give to the perpetually incompetent. Then we wonder why things seem so mediocre these days.

So I won't waste anymore time on that Marxist mumbo-jumbo.

Believe yo me, once those people open their own businesses they'll change their tune quickly. 'But Mable, you supported a cap on profits but a few years ago!" 'But that was before my pickled pearled turnips took off and made me some money!'

Ignore my rant and consider:

"Canadian banks typically pay a higher dividend than their U.S. counterparts and have done so for a considerable period. For example, the Bank of Montreal (NYSE:BMO) has an uninterrupted record of dividend payments extending back to 1829. The Bank of Nova Scotia is not far behind, with continual dividend payments since 1832, followed by TD Bank, which has paid dividends continually since 1857, and the Royal Bank, which has paid an uninterrupted dividend to investors for 144 years, extending back to 1870. Canadian banks give almost half their earnings back to investors in payouts, resulting in an average dividend yield of 4.32%, about double that of U.S. lenders. There is no sure thing in investing, but in my experience, companies like Royal Bank - with its strong franchise, resulting in its strong market position, and paying a safe and growing dividend - best reward investors over the long haul.

Canadian banks have been ranked the world's soundest for eight straight years by the World Economic Forum. The country's banking system, which is dominated by the Big Five banks, ranked No. 1 in the Global Competitiveness Report released by the organization. Finland's banking system ranked second of 140 countries surveyed and Australia's third. The U.S. banking system was in 39th place, compared with 49th a year earlier."

See? I put it in bold and in electric blue so that you can't miss it. Half their earnings go back to investors through a 4.32% dividend yield. That's something you don't hear on the radio mostly because of the pounding of the fists on the table blocks it. Look again. This time in purple.

Not only is a steady dividend gold, the key characteristic where Canadian banks are concerned is its security and stability.

Granted, ours is basically a banking monopoly with little competition (this is for another debate) but at least they give us something in return - to a certain extent.

My advice? Shut up and quit sweating the small stuff using anti-capitalist empty platitudes.

Invest in banks if you hate fees. You'll more than make it up. It reminds me of when we'd sell and buy a stock for clients. They'd complain about the commissions (at the time $85 both ways for a $170 total) completely overlooking they made money on the stock that more than covered the cost.