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Trends in the Noninterest Income of Banks

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  • Joseph G. Haubrich
  • Tristan Young

Abstract

A large fraction of banks? revenue comes from noninterest income, which includes items such as overdraft fees and ATM charges. We investigate whether this source of income has increased since the financial crisis, given that banks? interest income may have been impacted by the low interest rate environment. We find that total noninterest income has actually decreased. However, service charges, one of the subcomponents of noninterest income, have increased. The increase in service charges is masked in the data on total noninterest income because other types of noninterest income, specifically securitization fees and other types of noninterest income affected by the crisis, fell during the same period.

Suggested Citation

  • Joseph G. Haubrich & Tristan Young, 2019. "Trends in the Noninterest Income of Banks," Economic Commentary, Federal Reserve Bank of Cleveland, issue September.
    • Handle: RePEc:fip:fedcec:00106
    DOI: 10.26509/frbc-ec-201914
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    Cited by:

    1. Rajdeep Sengupta & Fei Xue, 2022. "Do Net Interest Margins for Small and Large Banks Vary Differently with Interest Rates?," Economic Review, Federal Reserve Bank of Kansas City, vol. 107(no.1), February.
    2. Grodecka-Messi, Anna & Zhang, Xin, 2023. "Private bank money vs central bank money: A historical lesson for CBDC introduction," Journal of Economic Dynamics and Control, Elsevier, vol. 154(C).
    3. Oguzhan Cepni & Riza Demirer & Rangan Gupta & Ahmet Sensoy, 2022. "Interest rate uncertainty and the predictability of bank revenues," Journal of Forecasting, John Wiley & Sons, Ltd., vol. 41(8), pages 1559-1569, December.
    4. Raksmey, Uch & Lin, Ching-Yang & Kakinaka, Makoto, 2022. "Macroprudential regulation and financial inclusion: Any difference between developed and developing countries?," Research in International Business and Finance, Elsevier, vol. 63(C).
    5. Sherika Antao & Ajit Karnik, 2022. "Bank Performance and Noninterest Income: Evidence from Countries in the Asian Region," Asia-Pacific Financial Markets, Springer;Japanese Association of Financial Economics and Engineering, vol. 29(3), pages 477-505, September.
    6. Chen, Hongyi & Siklos, Pierre L., 2022. "Central bank digital currency: A review and some macro-financial implications," Journal of Financial Stability, Elsevier, vol. 60(C).

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