Budapest Post

Cum Deo pro Patria et Libertate
Budapest, Europe and world news

Europe's banks turn to fees to kick customers' branch habit

Europe's banks turn to fees to kick customers' branch habit

At Spain's Caixabank (CABK.MC) most customers visiting a branch for a service they could access online will now have to pay two euros for the privilege.

The fees are part of a shift by European banks, suffering from years of negative interest rates, to start turning the screws on customers who still rely on dense branch networks.

A surge in deposits during the pandemic - which banks then have to pay to park at the central bank - is spurring many European lenders to start squeezing money out of services they used to perform for free.

"A main part of our business, taking deposits, is becoming a loss-making activity. What was once part of our core business and profits is now making losses," said Caixabank's CEO Gonzalo Gortazar last month.

With Gortazar's bank about to complete the integration of Bankia following its 4.3 billion euro ($4.92 billion) acquisition, it is sending its more than seven million new customers the details of the fee policy – including the branch usage fee which was detailed in a client letter seen by Reuters.

Charges on a debit card for non-loyal customers could rise to 36 euros from 28 euros if former Bankia clients do not use a new credit card issued by Caixabank dubbed 'My Card', which brings the bank more profitable lending opportunities.

Bankers say it is a necessary move to sustain profitability.

Spanish banks are struggling to earn money from lending, and their revenues declined 2% in the first half of 2021 compared to the same period in 2020, according to the Bank of Spain.

BBVA (BBVA.MC) now charges 2 euros for withdrawing less than 2,000 euros at a branch, while Santander will charge some clients up to 240 euros a year just to maintain a bank account if they don't meet certain conditions.

"All our competitors are doing similar things. You just can't give away all services for free," a deputy retail head of a big Spanish lender said on condition of anonymity.

RISING FEES


In Germany, banks are also introducing new fees.

From Nov. 10 DKB bank has started charging new customers fees on accounts with more than 25,000 euros, while ING clients will start paying 99 cents a month from next March for debit cards, on top of a 4.90 euro charge a month for accounts that was introduced in 2020.

In Italy, consumer association Altroconsumo said in September that the cost of bank accounts with home banking services had increased by an average of 11-15% in 2021.

The 2021 McKinsey global payments report released in October said the shifts are a response to the billions of dollars of revenue lost in net interest income at European banks during the past decade of low or negative rates.

Commissions at Spanish lenders rose 16% in the second quarter to 4.18 billion euros ($4.83 billion) from a year ago, while mortgage lending grew just 0.54% in the same time.

As of end-June, the ratio of Spanish banks' net fee and commission income to their total net operating income was around 25%, below the 32% average for European banks and well below the almost 40% for Italian banks and 37% for German banks, data from the European Banking Association (EBA) showed.

VULNERABLE CUSTOMERS


Some officials are warning of risks of growing financial exclusion caused by the changes, despite banks' efforts to provide exemptions for elderly customers.

"Although the closure of branches in rural areas can be justified by the search for profitability and a decline in demand, this reduction affects the population, especially in relation to access to cash, which cannot be covered, like other banking services, through electronic banking," the Bank of Spain said in its latest annual report.

Even in cities like Madrid, older clients can feel left behind.

"I received an electronic notification about potential hikes in fees but my PC is not working properly and I struggle to use the app on my mobile," said 78-year-old Carmen Reyes, who said she has been a Bankia customer for 70 years.

"If they close my branch I would leave."

($1 = 0.8734 euros)

AI Disclaimer: An advanced artificial intelligence (AI) system generated the content of this page on its own. This innovative technology conducts extensive research from a variety of reliable sources, performs rigorous fact-checking and verification, cleans up and balances biased or manipulated content, and presents a minimal factual summary that is just enough yet essential for you to function as an informed and educated citizen. Please keep in mind, however, that this system is an evolving technology, and as a result, the article may contain accidental inaccuracies or errors. We urge you to help us improve our site by reporting any inaccuracies you find using the "Contact Us" link at the bottom of this page. Your helpful feedback helps us improve our system and deliver more precise content. When you find an article of interest here, please look for the full and extensive coverage of this topic in traditional news sources, as they are written by professional journalists that we try to support, not replace. We appreciate your understanding and assistance.
Newsletter

Related Articles

0:00
0:00
Close
France Requests Airlines to Cut Flights at Paris Airports Amid Planned Air Traffic Controller Strike
Poland Implements Border Checks Amid Growing Migration Tensions
Emirates Airline Expands Market Share with New $20 Million Campaign
Amazon Reaches Milestone with Deployment of One Millionth Robot
Yulia Putintseva Calls for Spectator Ejection at Wimbledon Over Safety Concerns
House Oversight Committee Subpoenas Former Jill Biden Aide Amid Investigation into Alleged Concealment of President Biden's Cognitive Health
Amazon Reaches Major Automation Milestone with Over One Million Robots
Extreme Heat Wave Sweeps Across Europe, Hitting Record Temperatures
Meta Announces Formation of Ambitious AI Unit, Meta Superintelligence Labs
Robots Compete in Football Tournament in China Amid Injuries
China Unveils Miniature Insect-Like Surveillance Drone
Marc Marquez Claims Victory at Dutch Grand Prix Amidst Family Misfortune
Germany Votes to Suspend Family Reunification for Asylum Seekers
Budapest Pride Parade Draws 200,000 Participants Amid Government Ban
Southern Europe Experiences Extreme Heat
Xiaomi's YU7 SUV Launch Garners Record Pre-Orders Amid Market Challenges
Jeff Bezos and Lauren Sanchez's Lavish Wedding in Venice
Russia Launches Largest Air Assault on Ukraine Since Invasion
Massive Anti-Government Protests Erupt in Belgrade
Iran Executes Alleged Israeli Spies and Arrests Hundreds Amid Post-War Crackdown
Hungary's Prime Minister Criticizes NATO's Role in Ukraine
EU TO HUNGARY: LET THEM PRIDE OR PREP FOR SHADE. ORBÁN TO EU: STAY IN YOUR LANE AND FIX YOUR OWN MESS.
Hungarian Scientist to Conduct 30 Research Experiments on the International Space Station
NATO Members Agree to 5% Defense Spending Target by 2035
NATO Leaders Endorse Plan for Increased Defence Spending
U.S. Crude Oil Prices Drop Below $65 Amid Market Volatility
International Astronaut Team Launched to Space Station
Macron and Merz: Europe must arm itself in an unstable world
Germany and Italy Under Pressure to Repatriate $245bn of Gold from US Vaults
Iran Intensifies Crackdown on Alleged Mossad Operatives After Sabotage Claims
Trump Praises Iran’s ‘Very Weak’ Response After U.S. Strikes and Presses Israel to Pursue Peace
Oil Prices Set to Surge After US Strikes Iran
BA and Singapore Airlines Cancel Dubai Flights Amid Middle East Tensions
Trump Faces Backlash from MAGA Base Over Iran Strikes
Meta Bets $14 B on Alexandr Wang to Drive AI Ambitions
FedEx Founder Fred Smith, ‘Heart and Soul’ of the Company, Dies at 80
Chinese Factories Shift Away from U.S. Amid Trump‑Era Tariffs
Pimco Seizes Opportunity in Japan’s Dislocated Bond Market
Labubu Doll Drives Pop Mart to Status as China’s Most Valuable Toy Maker
Global Coal Demand Defies Paris Accord Goals
United States Conducts Precision Strikes on Iran’s Nuclear Sites
US strikes Iran nuclear sites, Trump says
Telegram Founder: I Will Leave My Fortune to Over 100 of My Children
16 Billion Login Credentials Leaked in Unprecedented Cybersecurity Breach
Senate hearing on who was 'really running' Biden White House kicks off
Hungary Ranked Among the World’s Safest Travel Destinations for 2025
G7 Leaders Fail to Reach Consensus on Key Global Issues
FBI and Senate Investigate Allegations of Chinese Plot to Influence the 2020 Election in Biden’s Favor Using Fake U.S. Driver’s Licenses
Trump Demands Iran's Unconditional Surrender Amid Escalating Conflict
Shock Within Iran’s Leadership: Khamenei’s Failed Plan to Launch 1,000 Missiles Against Israel
×