Santander Said to Pass Negative Rates to Institutional Clientsby
Clients of securities services will pay fees on deposits
Spanish lender joins European banks in passing on ECB charge
Banco Santander SA is joining other European lenders in passing on the region’s negative interest rates to some of its financial institutional clients.
Spain’s biggest bank notified clients of its securities services unit by letter last month that it will introduce a fee on their deposits, two people with knowledge of the matter said. A spokeswoman for Banco Santander declined to comment.
The European Central Bank is charging banks on overnight deposits to encourage spending and investment in the region’s sluggish economy. The rate, cut three times since the policy began in June 2014, is now minus 0.4 percent.
European lenders including Deutsche Bank AG have already passed on at least some of the charge to corporate clients with large deposits. Spain’s second-largest bank, Banco Bilbao Vizcaya Argentaria SA, is charging between 0.15 percent and 0.25 percent, Chief Executive Officer Carlos Torres said in July.
Santander Securities Services SA, which conducts settlements and acts as a custodian of cash for its clients, has about 700 billion euros ($782 billion) in assets, according to its website.