No significant change in cost of basket of payment services last year; cap on charge for basic payment account left unchanged
Banka Slovenije’s annual analysis finds that the cost of the basket of payment services reflecting the payment habits of the typical customer averaged EUR 70.22 in 2023, down EUR 0.49 on 2022. The range between the cheapest and the most expensive basket remains very wide.
In the comparison of advertised effective interest rates (EIRs) across individual banks and savings banks, we also find the differences between the banks’ offers to be relatively large. The gap between the highest and lowest EIRs on the average consumer loan is 2.45 percentage points, while the gap on the average housing loan is 0.73 percentage points.
Banka Slovenije is also leaving the current level of the cap on monthly charges for providing a basic payment account unchanged, in the amount of EUR 4.90, or EUR 1.47 for those eligible for cash social assistance and the social security supplement.
To ensure the straightforward comparability of the services offered by banks and savings banks, the calculations for each bank are based on the same basket of payment services, which reflect the payment habits of the typical customer. Banka Slovenije thus provides an overview of the full package of services offered by all banks and savings banks on its website. The price comparison of the baskets of consumer payment services serves as an informative aid to choosing the most suitable banking package.
Cost of basket of payment services: EUR 35.88 to EUR 97.68
The average annual cost of the basket of services for the typical customer for the packages aimed at the majority of customers amounted to EUR 70.22 for the year (2022: EUR 70.71; 2021: EUR 69.40; 2020: EUR 70.47).
Table 1: Calculation of cost of baskets of payment services as at 31 December 2023
Note: The comparison also includes packages that are available solely to new customers or are only available to existing customers with a switching fee, and packages that can only be opened online. Source: Own calculations based on basket of services (Table 1), and corresponding fees applicable on 31 December 2023
Ranges in EIRs of 2.45 percentage points and 0.73 percentage points according to online calculators
With the aim of providing an even more comprehensive look at the range of banking services for consumers, we have also drawn up a comparison of financing costs for retail customers. The comparison uses EIR as the most complete indicator of financing costs, as it includes the interest on the borrowed money and the cost of credit services.
The figures were obtained from the online calculators of the individual banks and savings banks, where we used an average maturity and an average loan amount for recent years. For consumer loans the average maturity is five years and the average loan amount is EUR 12,000, while for housing loans the average maturity is 16 years and the average loan amount is EUR 80,000. A fixed interest rate was chosen for both types of loan, with the borrower assumed to be a customer of the bank or savings bank in question. Real estate was assumed to be the collateral for the housing loan.
The average EIR calculated in this way for a consumer loan was 8.09% (last year: 7.90%), with a range from 6.83% at the cheapest bank to 9.28% at the most expensive, which is equivalent to slightly less than EUR 700 in financing costs (last year: just under EUR 1,000). The average EIR for a housing loan according to the online calculators was 4.20% (last year: 4.45%), with a range from 3.87% at the cheapest bank to 4.60% at the most expensive, which is equivalent to around EUR 5,500 in financing costs (last year: around EUR 3,000).
Table 2: Advertised EIRs for consumer and housing loans as at 22 January 2024
* The bank or savings bank does not have an online calculator.
** Consumer loan for new customer in permanent employment; no calculator for housing loans.
*** For housing loans the customer must take out permanent or term life insurance.
**** Consumer loan secured by mortgage.
Sources: Websites of banks and savings banks
Charge for providing basic payment account remains unchanged
All Slovenian banks that offer consumer payment accounts must provide access to a basic payment account. This is defined by law, and is aimed at all consumers who have no payment account, as its fundamental purpose is to ensure financial inclusiveness. With the aim of protecting the most vulnerable population groups, in its annual review Banka Slovenije took the decision to leave the cap on the monthly fee that banks can charge consumers for providing a basic payment account unchanged at EUR 4.90, or EUR 1.47 for those eligible for cash social assistance and the social security supplement.