CBA's warning for Aussie cash users over $350 million issue: 'Challenging'
Commonwealth Bank (CBA) has revealed how much it costs them to handle and supply cash. The nation's biggest bank said it sets them back upwards of $350 million per year to provide cash services over the counter in branches and through ATMs.
In its FY24 investor presentation, CBA noted that monthly average ATM withdrawals have plummeted 51 per cent since 2019 while digital payments have skyrocketed 85 per cent. But Cash Welcome founder Jason Bryce told Yahoo Finance the cost per year to provide cash is a drop in the ocean for CBA.
"They sit at the heart of the economy and make staggering profits," he said.
"$350 million is coming out of their what... $9.8 billion profit? It's a cost of doing business. You're a bank, you deal in legal tender."
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CBA warned in the presentation that providing cash services continued to be a "challenging commercial model" of its business.
Not only have monthly ATM cash withdrawals halved in five years, but the bank claimed the cost of providing cash had jumped by 50 per cent.
Bryce is concerned CBA's revelation could mean a much larger move is coming in the not-too-distant future when the banks meet to discuss the future viability of cash in Australia.
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"Commonwealth Bank is softening us up for some kind of argument at the House of Representatives next month about how we're paying too much for cash and something's got to be done now," he warned.
"It's ridiculous. That's your business. It's not all that much when you divide it by the number of places you have."
Commonwealth Bank said late last year that it had more than 700 branches dotted around Australia and more than 1,800 ATMs. But, the bank has closed 354 branches and 2,297 ATMs in the past five years.
If you divide the $350 million cost to provide cash services just by the number of branches still open, it's close to $500,000 per branch.
But a spokesperson for CBA told Yahoo Finance that cash "is and will remain an important part of the economy".
"CBA is committed to making sure cash is available to those who need it, and continues to distribute around $4 billion in cash each month through the largest branch and ATM network in Australia," the spokesperson said.
