Branch usage fees are being instituted by banks across Europe to lower the number of in-person transactions that could have been accomplished online, Reuters reported on Monday (Nov. 15).
At Spain’s CaixaBank, for example, most customers will pay €2 to handle a transaction in-person at a branch when it could have been done online. The fees are part of an attempt by European financial institutions to reduce the financial pain of negative interest rates plus the overhead of operating dense networks of retail bank branches.
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A surge in deposits fueled by pandemic lockdowns meant that most FIs have been holding the monies at central banks, prompting many to look for ways to make a bit of a return on services normally performed at no charge.
“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.
The €4.3 billion merger between CaixaBank and Bankia is almost finalized, and the new 7 million-plus customers were sent a letter seen by Reuters about the coming branch usage fee. Debit card fees are also expected to go up for some customers — from €28 to €36 — if former Bankia customers decline using the new My Card issued by CaixaBank.
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Spanish banks saw revenues drop 2 percent in the first six months of this year over last year compared to the same time period, according to data from the Bank of Spain.
Banco Bilbao Vizcaya Argentaria (BBVA) charges customers a fee of €2 for withdrawing less than €2,000 euros at a branch. Santander is planning annual fees of €240 annually to have a bank account if certain conditions aren’t met.
“All our competitors are doing similar things. You just can’t give away all services for free,” an unnamed deputy retail head of a big Spanish lender told Reuters.
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German banks also started instituting new charges, with DKB bank charging fees on accounts with more than €25,000. ING clients will start paying 99 cents a month for debit cards, on top of a €4.90 monthly fee instituted last year.