Danish lender Jyske Bank will charge its affluent customers for deposits, becoming the first lender in the country to charge negative interest rates.
The bank warned that the negative rate environment will prevail for several years.
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Jyske Bank CEO and managing director Anders Dam said: “Jyske Bank’s financial statements are very much affected by the sustained negative interest rate environment and interest expenses for the increasing non-preferred senior debt. Therefore, despite the still rising business volume, net interest income fell by 6% relative to the first half of 2018.
“The negative interest rate environment that has affected the Danish market since the spring of 2012, only interrupted in 2014, now seems to be of a rather permanent nature.
“For instance, it is no longer possible to obtain Danish government bonds yielding positive returns irrespective of the time to maturity.”
Clients depositing over DKK7.5m ($1.1m) will be imposed a negative interest rate of 0.6%.
According to Dam, the change has been driven by the bank’s “significant and increasing deposit surplus from personal clients” that results in large expenses.
Negative interest rates have been hitting several lenders lately.
Recently, UBS reduced the threshold for charging wealthy customers for their deposits at the bank.
The Swiss bank will now reportedly charge an annual fee of 0.6% from clients for deposits of more than €500,000.
