(Bloomberg) — Commerzbank AG is intensifying efforts to charge clients for keeping deposits at the lender to ease the pain of negative interest rates.
Germany’s second-biggest publicly listed bank has been passing on negative interest rates to corporate clients for some time, Chief Financial Officer Stephan Engels said Thursday on an analyst call. That effort has now been expanded to a second core division that caters to small businesses and retail clients, he said, adding that the bank doesn’t plan to charge small retail clients.
“What you want to avoid is that you scare customers off in bigger chunks” by raising costs, he said later in an interview on Bloomberg TV. “That’s why everyone is trying to kind of do it in small steps.”
Commerzbank is struggling to stem shrinking revenue as the negative interest rates set by the European Central Bank and competition in its home market erode margins. The lender on Thursday said it no longer expects net income to grow this year because of the ECB’s recent decision to cut interest rates deeper into negative territory and higher taxation.