The Icelandic Competition Authority has expressed concern over the lack of competitive operation policies among the country’s three big banks, Landsbanki, Íslandsbanki, and Arion Banki. According to a new report released by the Icelandic Competition Authority, titled “Fjármálaþjónusta á krossgötum” (PDF link) this is resulting in clients paying higher rates and receiving unfavourable terms in order to cover the banks’ ever-increasing operating expenses.
The report reveals that the operating costs of the banks have been increasing significantly year-over-year since the crash, as the public focused their post-crash attention on loan re-evaluation, which increased the banks profits more than had been expected, RÚV reports.
Wages for bank employees have been steadily increasing since the crash, at a far greater rate than employees in other sectors have been experiencing. Such expenses increased by 15% between 2009 and 2010 in the banking sector, while a comparison made with the increased wages of 26,000 firms in other sectors show an average wage increase of just 6% over the same period. Moreover, on an international scale, the operating expenses of Icelandic banks is considered high, accounting for 2.3% of bank assets, in comparison to the operating costs of small Nordic banks and larger European banks claiming 0.6 – 1.5% of assets going toward operating expenses.