ZURICH, Aug 23 (Reuters) - Switzerland’s Postfinance AG said on Thursday it would begin charging fees to private customers on deposits from 500,000 Swiss francs ($502,159.28), half the previous threshold, to mitigate the impact from negative interest rates.
Postfinance, the banking arm of the Swiss Post, has been struggling to make up for eroding interest income since the Swiss National Bank introduced negative interest rates in 2015 in part due to government restrictions on its business, including limits on extending mortgages to homebuyers.
Its earnings before taxes dropped by two thirds to 125 million Swiss francs in the first half of 2018, Postfinance said in a statement, adding this development was forcing it to lower the threshold for fees on private customers’ deposits.
“As Postfinance lacks attractive investment opportunities and is not allowed to give mortgage loans, it is forced to keep some of its customer assets in liquid form with the Swiss National Bank,” Postfinance said.
“For that reason, Postfinance is forced to lower the threshold for deposit fees charged to private customers to 500,000 Swiss francs, from one million up to now, from Oct. 1.”
$1 = 0.9957 Swiss francs Reporting by Silke Koltrowitz