‘Negative interest rate’ 57 places in a year → 237 places
Saving nowhere to spend money with Corona ↑
The more deposits are attracted, the bigger the reverse margin.
While even providing interest rate comparison service
Induce “Go to another bank”
There is a horror scene where big German banks are encouraging customers to leave their deposits in other banks. This is due to the structure that the more savings are attracted by banks, the more negative margins are generated while savings are rapidly increasing due to the novel coronavirus infection (Corona 19).
According to the Wall Street Journal (WSJ) on the 1st (local time), large German banks such as Deutsche Bank and Comerzbank have been applying an annual interest rate of -0.5% to deposits of new customers over a certain amount since last year. This means that the bank account holder should pay the bank interest, not the interest. According to price comparison site Verivox, there were 57 banks in Germany that charged negative interest rates to individual customers in Germany in March of last year, before the pandemic of Corona 19, but now there are 237 banks.
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Even banks are actually pushing customers to other banks. Deutsche Bank also offers an online rate comparison service to help customers transfer their deposits to other banks. In fact, in Europe, the number of customers using Razon, a deposit transfer platform, reached 325,000 last year, up 40% from the previous year.
The reason commercial banks are reluctant to attract deposits is that the burden on banks has increased as savings have increased significantly due to the Corona 19 incident. Commercial banks have to deposit some of their deposits in the central bank in the name of reserves for payment. At this time, negative interest rates are applied and interest is given to customers, resulting in negative margins. The European Central Bank (ECB) has maintained a negative base rate since 2014.
According to the ECB, the deposit amount of German households was 2.5 trillion euros (about 3,400 trillion won) as of December of last year, an increase of 6% compared to the same period of the previous year, a record high. WSJ said, “As restaurants closed and travel was restricted due to the Corona 19 pandemic, there were no places for consumers to spend money.”
Other European countries have also come up with various encouraging measures to prevent deposits from being attracted. In Denmark, deposits were charged mainly by existing wealthy customers, but the scope of the target has been greatly expanded in recent years. Nordiabank, Denmark, the largest bank in Northern Europe, has lowered the deposit standard, applying a 0.75% commission rate, from Krone 750,000 (about 136.41 million won) to Krone 250,000. WSJ reported, “It is estimated that about 25% of all depositors in Denmark pay fees.”
/ Reporter Kihyuk Kim [email protected]
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