ZURICH, March 22 (Reuters) - UBS will impose a charge on wealthy clients for cash they hold in euros, a reaction to the negative interest rate environment in the euro zone.
The Swiss bank, the world’s largest wealth manager, will introduce from May an annual fee of 0.6 percent on accounts with more than 1 million euros ($1.1 mln).
The charge will apply to total amounts held by individual customers and be calculated on a daily basis.
It comes in response to the ultra-low or negative European Central Bank rates, in the wake of the financial crisis, which have eaten into banks’ margins.
UBS currently imposes an individual deposit charge for large account balances held in Swiss francs by corporate, institutional and certain very wealthy clients, as it deals with negative interest rates charged by the Swiss National Bank.
“UBS will apply an individual deposit charge on large euro cash balances for European clients,” a UBS spokesman said, confirming an earlier report by Bloomberg.
“This charge reflects the increasing costs seen across the industry of re-investing cash from deposits in money and capital markets, the continued extraordinarily low and negative interest rates in the euro area and increased liquidity regulations.” ($1 = 0.9281 euros) (Reporting by John Revill; Editing by Susan Fenton)