August 20, 2019 / 10:45 AM / 2 months ago

Denmark's Jyske Bank to charge wealthy clients for deposits

FILE PHOTO: Jyske Bank branch in Copenhagen, Nov. 5, 2013. REUTERS/Fabian Bimmer

COPENHAGEN (Reuters) - Denmark’s Jyske Bank (JYSK.CO) will begin charging wealthy individuals for deposits instead of paying interest, it said on Tuesday, less than two weeks after launching the world’s first negative interest rate mortgage.

Jyske Bank, Denmark’s second-largest lender, said it would introduce a negative interest rate of 0.6% for clients depositing more than 7.5 million Danish crowns ($1.1 million).

“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,” Jyske Chief Executive Anders Dam said in a statement.

“Market expectations indicate that the negative interest rate environment will last for several years,” Dam added.

The Nordic country was among the first to introduce negative rates in 2012. Earlier this month, Jyske became the first to offer a negative rate on a home loan, in effect paying customers 0.5% to borrow money for 10 years.

Such moves reflect prospects of a global recession, prompting central banks to try to kick-start the economy by measures such as cutting lending rates.

Denmark’s largest lender Danske Bank (DANSKE.CO) has said it has no plans to introduce negative interest rates on deposits, though Switzerland’s UBS (UBSG.S) has said it would impose a negative rate of 0.75% on wealthy clients who deposit more than 2 million Swiss francs ($2 million) with its Swiss bank.

Denmark last month became the first developed economy in this year’s global plunge in bond yields to have negative yields on all its government bonds.

Reporting by Andreas Mortensen; Additional reporting by Nikolaj Skydsgaard; Editing by Jacob Gronholt-Pedersen and David Holmes

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