The Spanish banking It already charges for deposits to large companies and institutional clients, but it resists in the case of individuals. For the moment, the alternative to weather negative rates is through a general increase in the commission for account maintenance, which affects all users equally, whether they have 10 or 200,000 euros in the bank. Most financial institutions have ended the free provision of their basic products, such as checking accounts, and have raised the demands in exchange for zero cost. The common tonic is to penalize above all unattached customers, those that are less profitable as they have less activity with the bank. Directly or indirectly, pay to have money saved in the bank it is already a reality.
Banks’ invoice for depositing their reserves in the European Central Bank (ECB) worsened to -0.5% in 2019. The interest rate that the agency charges for excess liquidity tries to motivate the flow of credit to the real economy instead of stockpiling it. But if the bank leaves customers’ money on hold instead of granting loans, then it receives a penalty (a part of these deposits are exempt). In addition, low rate prospects they have lasted longer than expected. In this scenario, clients with high funds have ceased to be profitable for institutions, which although they previously absorbed the ECB’s deposit rate, now transfer it to the client in one way or another.
The Central Bank charges a rate of -0.5% since 2019 for ‘parking’ excess liquidity
“Initially there were no problems with the deposit facility because it was thought that low rates were temporary, but now the market does not see positive rates until at least 2027 and the bank suffers from this scenario,” he explains Eduardo Areilza, from the consulting firm Alvarez & Marsal.
Banks support negative interest rates since 2014 and liquidity costs them money, so they have ended up looking for solutions with which capitalize on that excess liquidity. In Europe, the Royal Bank of Scotland, the Postbank (a subsidiary of Deutsche Bank) and the Bank of Ireland were pioneers in charging customers with the Central Bank penalty. Danes Jyske Bank and SpardNord Bank impose a fee on their clients premium. More recently, UniCredit in Italy and foreign firms operating in Spain, such as the Swiss Julius Baer, UBS and Credit Suisse, have chosen to tax the deposits of large clients, with balances generally considered private banking that exceed 100,000 euros .
Several Spanish banks also charge to guard the great patrimonies. Ibercaja has a rate of 0.4% for unrelated companies with average current account balances greater than 200,000 euros. Santander charges certain institutional clients and family offices, depending on the business relationship they have with the bank. Bankia passes the cost on to large companies with a turnover of more than six million euros and, as detailed, it is negotiated with the company based on its global relationship with the entity. CaixaBank, for its part, transfers “part of the cost” to large companies “on those deposit volumes that exceed transactional liquidity needs”. Bankinter, in turn, points out that the collection only applies “in specific cases of liquidity peaks” to institutional entities such as managers or insurers.
For its part, BBVA will begin to charge 0.025% per month to customers retail without any type of connection and with high balances in account, according to sources from the entity, who point out that they barely account for 0.2% of the clientele.
Experts argue that the transfer of the ECB penalty to private banking customers or companies is “easier”, but the alternative with small savers is the increase in commissions on current accounts. “In peripheral countries the financial culture is not so widespread and the collection of commissions is better understood than charging directly for savings. Although it is the same for practical purposes, it is less aggressive for the clientele ”, he assures Fernando Rojas, consultant in the banking area of Analistas Financieros Internacionales (Afi), which rules out that in Spain it will be charged in the short term for deposits from retail customers.
The banks themselves reject this possibility, but the truth is that they are positioning themselves in the face of a possible chain movement in the sector. ING recently announced that it will charge 10 euros to clients without direct debit payroll who have more than 30,000 euros in their account. Other entities have increased maintenance fees in the last year: BBVA charges 100 euros to unrelated individuals, with some exceptions; Bankia pays 14 euros a month, or 168 euros a year, if you do not have direct debit income; CaixaBank and Santander charge up to 240 euros per year if none of the conditions are met; Cajamar has a commission of 80 euros per year, and Sabadell, of five euros per month (60 euros per year). The rate for Abanca and Unicaja Banco is 84 euros per year, in the latter only for those over 27 years of age, and in Liberbank, users with less links pay between 12 and 15 euros per year.
The Organization of Consumers and Users (OCU) calculates that the average commission for maintaining the current account of traditional banks has risen to 67 euros per year.
Loyalty. The maintenance commission is one of the most frequent and basically consists of charging for having the account open. In Spain, the commission policy of financial institutions has tended to converge in recent years and banks seek customer loyalty and loyalty in exchange for getting rid of commissions. It is increasingly necessary to direct debit the payroll or pension, whose minimum amount varies depending on the entity, as well as the receipts, make payments with cards, or comply with a series of requirements such as positioning in investment products or hiring a mortgage or pension plans. Avoiding commissions requires linking with the bank to a greater or lesser extent depending on the entity, but it is also possible to get rid of any cost in some online entities.
Service. The AEB bank employers point out that the “exceptional” scenario of negative rates is one of the reasons for the expectation of low profitability that weighs on the sector and they value the efforts of banks not to charge families for deposits. However, they point out that “in any activity, profitability is essential to guarantee the continuity of the service. And the banking sector is no exception to the rule ”.