Credit Suisse scraps negative rates for Swiss private clients (updated)

Graubuendner Kantonalbank

29/06/2022 16:11

(Adds detail, context)
    By Brenna Hughes Neghaiwi
    ZURICH, June 29 (Reuters) - Credit Suisse  CSGN.S  is
scrapping the negative interest rates it has charged wealthy
Swiss clients since 2020, the lender said on Wednesday, as its
economists anticipate a further rate hike in Switzerland this
year.
    "Despite the continued negative interest-rate environment,
Credit Suisse will repeal the account balance fee and thus move
away from using negative interest rates in Swiss francs as of
July 1 for the private client business," the bank said in a
statement.
    In its first rate hike in 15 years, the Swiss National Bank
(SNB) in June raised its policy interest rate to -0.25% from the
-0.75% level it has deployed since 2015.  urn:newsml:reuters.com:*:nL8N2Y31LQ
    Governing board members have signalled further hikes may
follow, spelling a potential end to the negative interest rates
commercial banks have had to fork out to hold money at the SNB
for the past seven years.  urn:newsml:reuters.com:*:nL8N2Y94LC
    "The economists at Credit Suisse anticipate that the prime
rate in Switzerland will be raised further over the course of
the year," Credit Suisse said. 
    The move places Credit Suisse ahead of larger rival UBS
 UBSG.S  in scrapping negative rates for clients. Several
smaller banks, including Valiant, Vontobel  VONN.S  and regional
lender Aargau Kantonalbank, have already done so.
    Commercial banks have come under pressure since the Swiss
National Bank introduced negative rates in December 2014, soon
cut further to a record low of -0.75%. That policy cost
commercial banks 1.2 billion Swiss francs in 2015 to hold
deposits above a certain threshold with the central bank.
    Banks were at first reticent to pass these charges on to
private customers, saying such a move could "trigger a bank run
http://reut.rs/2fkR5EU", but over time they began offloading
more of these costs.
    UBS in July 2019 announced https://reut.rs/2ypmSRb it would
begin imposing a 0.75% fee on wealthy clients with deposits
above 2 million Swiss francs that November, a move soon followed
https://reut.rs/2OWZ54z by Credit Suisse.
    UBS further lowered that threshold to 250,000 Swiss francs
in 2021, as then-Swiss banking head Axel Lehmann -- now the
chairman of Credit Suisse -- spoke of contending with negative
interest rates "for years to come https://reut.rs/3i2cjcQ".
    However, monetary policy conditions have quickly shifted in
2022 as central banks look to fight resurgent inflation, leading
to a spate of rate rises in June.  urn:newsml:reuters.com:*:nL1N2Y30SY

 (Reporting by Brenna Hughes Neghaiwi and John Revill; Editing
by Riham Alkousaa and Michael Shields)
 ((John.Revill@thomsonreuters.com; +41 41 528 36 37; Reuters
Messaging: john.revill.thomsonreuters.com@reuters.net))