The evolution of bank fees as a source of income: trends and new business models – evidence from Italy

Massimiliano Affinito, Matteo D'Amato () and Raffaele Santioni ()
Additional contact information
Matteo D'Amato: Bank of Italy

No 777, Questioni di Economia e Finanza (Occasional Papers) from Bank of Italy, Economic Research and International Relations Area

Abstract: The analysis of bank fees combines three research areas: the soundness of individual financial institutions, overall system stability, and customer protection. In fact, high fees could entail both risks to the sustainability of business models and frictions in the fairness of customer relationships. This paper describes the evolution of bank fees in Italy between 2008 and 2021, distinguishing between fee types, bank categories, and time spans, and it presents an analysis of the bank characteristics most strongly associated with the relevance of fees. The paper shows that the growth in fee income observed since the global financial crisis involved all categories of banks, but the share of gross income generated by fees varies broadly across banks. At the bank level, higher fees are associated with higher operating expenses and lower capital levels. Our estimates suggest that there is no systematic relationship between greater recourse to fees as a source of income and bank business models that are more focused on household lending.

Keywords: fee income; customer protection; bank business model (search for similar items in EconPapers)
JEL-codes: D18 G21 (search for similar items in EconPapers)
Date: 2023-06
New Economics Papers: this item is included in nep-ban
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://www.bancaditalia.it/pubblicazioni/qef/2023-0777/QEF_777_23.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bdi:opques:qef_777_23

Access Statistics for this paper

More papers in Questioni di Economia e Finanza (Occasional Papers) from Bank of Italy, Economic Research and International Relations Area Contact information at EDIRC.
Bibliographic data for series maintained by ().