HSBC will soon be charging other banks that keep deposits with them, in response to the low-interest rate environment.
Deposits of euros, Swiss Francs, Danish crowns and Swedish krona will be charged by Europe’s largest bank from August. But it will only affect banks, not other businesses or individuals.
“HSBC charges banks for deposits they hold with us in currencies where negative interest rates apply. Banks affected have been notified and we continue to monitor the situation,” HSBC said in a statement yesterday.
HSBC joins the ranks of a number of other European banks that are charging their competitors for holding deposits – passing on the cost of holding money when interest rates are negative. Both interest rates set by central banks and the rates on government debt are historically very low across Europe.
Negative deposit rates are currently in place at the European Central Bank and the central banks of Denmark, Sweden and Switzerland.
Meanwhile, a number of European countries have seen the interest on their government debt fall to below zero.