September 20, 2019 / 7:52 AM / a month ago

UPDATE 1-Denmark's Jyske Bank lowers its negative rates on deposits

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COPENHAGEN, Sept 20 (Reuters) - Jyske Bank said on Friday people with more than $111,100 in their bank accounts will be charged more for their deposits as it seeks to pass on some of the costs of recent rate cuts by the European and Danish central bank.

Jyske Bank, Denmark’s second-largest bank, said it would introduce a negative interest rate of 0.75% for all corporate deposits and for private clients depositing more than 750,000 Danish crowns ($111,100) from Dec 1.

A month ago, it said clients depositing more than 7.5 million crowns would be charged negative interest rates of 0.6%.

Last week, Denmark’s central bank cut its key deposit rate to minus 0.75%, a record low among developed economies. Earlier the same day, the European Central Bank cut interest rates and resumed buying bonds.

The rate cuts mean that Jyske Bank now loses even more money, Chief Executive Anders Dam said in a video statement on the bank’s web page.

“It is a lot of money and we have to pass on part of this bill to our customers,” he said. “I don’t hope that we will have to go lower but I don’t dare to promise it.”.

Denmark was among the first to introduce negative rates in 2012. In August, 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.

Denmark’s largest bank, Danske Bank has said it has no plans to introduce negative interest rates on deposits. Switzerland’s UBS has said it will impose a negative rate of 0.75% on clients who deposit more than 2 million Swiss francs ($2 million). ($1 = 6.7559 Danish crowns) (Reporting by Stine Jacobsen, editing by Larry King)

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