Danske Warns Its Richest Clients They May Face Negative Rates

(Bloomberg) --

Danske Bank A/S is reviewing a stated goal of protecting retail clients from negative interest rates.

Chief Executive Officer Chris Vogelzang told investors he’s now “looking at” the bank’s current stance and isn’t “ruling out” passing on the cost of subzero rates to wealthier clients.

Denmark has had negative rates longer than any other country, and Danske is the last big Danish bank to have shielded average depositors from the policy. But after eight years, and a recent go-ahead from the regulator on legal concerns, Danske is now adjusting its stance.

Vogelzang said any decision will be based on “commercial considerations,” suggesting the bank will tread carefully to avoid customer flight. He declined to give any indication of the threshold at which Danske might impose negative rates.

A number of Denmark’s biggest banks last year bit the bullet and are charging negative rates on deposits above 750,000 kroner ($110,000), though some are going even lower than that.

The development is expected to push depositors toward investment products instead, and may even make monetary policy more effective.

To contact the reporter on this story: Frances Schwartzkopff in Copenhagen at fschwartzko1@bloomberg.net

To contact the editors responsible for this story: Tasneem Hanfi Brögger at tbrogger@bloomberg.net, Christian Wienberg

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