The number of banks in Germany passing costs related to negative ECB interest rates onto retail customers has increased in recent weeks, according to data from price comparison website Biallo.de.
The European Central Bank cut the deposit rate for banks under its remit by 10 basis points to negative 0.5% on Sept. 12. The decision was unpopular with German banks, which are more exposed to negative rates than lenders elsewhere in the eurozone.
German lenders in 2018 faced the highest rate-related charges, of €2.84 billion, among eurozone member states, according to estimates from Brussels-based think tank Bruegel.
In the past, state-backed savings banks and cooperative banks in Germany were reluctant to charge negative rates on retail deposits as they were worried about reputational damage and the loss of clients.
Since the latest ECB rate cut, however, more savings and cooperative banks have started to charge a negative 0.5% rate on retail deposits and some have also reduced the deposit amounts that are free of charge, Biallo.de said in a recent study. For example, Berliner Sparkasse AG has imposed a negative 0.5% rate on all current and savings accounts above €500,000. The bank previously started charging deposits from €1 million.
A total of 129 savings and cooperative banks are charging their clients negative rates but these still largely apply to corporate rather than retail customers, according to Biallo.de. The number of lenders charging corporate clients is 125 while 33 banks are charging retail customers.
The deposit amounts offered free of charge range from €100,000 to €1 million, according to the data. An online survey run by Biallo.de shows 74% of respondents will switch banks if their lender charges them negative rates.
The total amount set aside by German consumers in savings accounts have surged 12% over the past five years and is expected to climb over €1 trillion in 2019, from €890 billion in 2018, a study by German financial technology firm Deposit Solutions GmbH shows. The savings amount per capita has nearly doubled to €12,400 in 2018, from €6,300 in 2012, Deposit Solutions said.
