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Santander able to implement no-notice charges for savings Santander able to implement no-notice charges for savings
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Santander has admitted it would be able to charge some customers to hold their deposits if interest rates drop below zero, without having to send letters warning them of the possibility in the way that Royal Bank of Scotland has.Santander has admitted it would be able to charge some customers to hold their deposits if interest rates drop below zero, without having to send letters warning them of the possibility in the way that Royal Bank of Scotland has.
The UK arm of the Spanish bank made clear that it did not intend to start implementing charges for savers, but already had the necessary “terms and conditions” in place to do so.The UK arm of the Spanish bank made clear that it did not intend to start implementing charges for savers, but already had the necessary “terms and conditions” in place to do so.
RBS, and its NatWest arm, faced criticism after sending letters to small businesses warning them that they could face charges for deposits. “Global interest rates remain at very low levels and in some markets are currently negative. Dependent on future market conditions, this could result in us charging interest on credit balances,” customers were warned.RBS, and its NatWest arm, faced criticism after sending letters to small businesses warning them that they could face charges for deposits. “Global interest rates remain at very low levels and in some markets are currently negative. Dependent on future market conditions, this could result in us charging interest on credit balances,” customers were warned.
The move by RBS, which is 73% owned by taxpayers, kickstarted a debate about the impact on banks and their customers from low interest rates, at a time when the major high street banks are preparing to report their results for the first time since the vote to leave the EU.The move by RBS, which is 73% owned by taxpayers, kickstarted a debate about the impact on banks and their customers from low interest rates, at a time when the major high street banks are preparing to report their results for the first time since the vote to leave the EU.
Related: World's 20 biggest banks rack up £252bn 'conduct costs' in five years
The uncertainty created by the Brexit vote prompted Bank of England governor Mark Carney to warn of monetary easing over the summer, while a cut from the 0.5% historic low in UK interest rates is expected on 4 August.The uncertainty created by the Brexit vote prompted Bank of England governor Mark Carney to warn of monetary easing over the summer, while a cut from the 0.5% historic low in UK interest rates is expected on 4 August.
As the UK arm of Santander reported a 16% rise in first-half profits to £1.1bn on Wednesday, chief executive Nathan Bostock said that if the bank wanted to charge larger corporate customers for deposits, new terms and conditions would be needed. But he added: “We have no current plans to charge negative interest rates.”As the UK arm of Santander reported a 16% rise in first-half profits to £1.1bn on Wednesday, chief executive Nathan Bostock said that if the bank wanted to charge larger corporate customers for deposits, new terms and conditions would be needed. But he added: “We have no current plans to charge negative interest rates.”
A spokesperson for Santander UK said: “Our terms and conditions for personal and small business customers would already allow us to charge to hold deposits. However, we have no plans to do so.”A spokesperson for Santander UK said: “Our terms and conditions for personal and small business customers would already allow us to charge to hold deposits. However, we have no plans to do so.”
Asked about whether a cut to the 3% savings rate was planned for its popular 123 current account – advertised by Olympian Jessica Ennis-Hill – Bostock said the rates were “continually under review”. Any change would be announced to customers with 60 days’ notice, he added.Asked about whether a cut to the 3% savings rate was planned for its popular 123 current account – advertised by Olympian Jessica Ennis-Hill – Bostock said the rates were “continually under review”. Any change would be announced to customers with 60 days’ notice, he added.
Related: Police search Santander's Madrid HQ in money-laundering inquiry
The chief executive appeared to play down speculation that the bank was interested in buying the 300 branches being put up for sale by Royal Bank of Scotland under the Williams & Glyn brand. “I can only say from our point of view we are focused on organic growth,” said Bostock, who joined Santander in 2014 from RBS where he was finance director.The chief executive appeared to play down speculation that the bank was interested in buying the 300 branches being put up for sale by Royal Bank of Scotland under the Williams & Glyn brand. “I can only say from our point of view we are focused on organic growth,” said Bostock, who joined Santander in 2014 from RBS where he was finance director.
On Thursday, Lloyds Banking Group is expected to set out how it intends to rein in costs in response to pressure on its profit margins caused by a rate cut, amid expectations from analysts that this will lead to further job cuts and branch closures.On Thursday, Lloyds Banking Group is expected to set out how it intends to rein in costs in response to pressure on its profit margins caused by a rate cut, amid expectations from analysts that this will lead to further job cuts and branch closures.
Lloyds admitted in February that it was already ahead of schedule in a plan to cut costs by £1bn over the three years to 2017 by cutting 9,000 jobs and closing 200 branches. Some 7,300 roles have already been lost and 150 branches shut, and analysts have said that more need to go to cope with sustained low interest rates.Lloyds admitted in February that it was already ahead of schedule in a plan to cut costs by £1bn over the three years to 2017 by cutting 9,000 jobs and closing 200 branches. Some 7,300 roles have already been lost and 150 branches shut, and analysts have said that more need to go to cope with sustained low interest rates.