EU Treasurers Prepare For Incoming Bank Fees

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European corporate treasurers are ready to react to the threat of more bank fees on their corporate accounts, new analysis found.

Reports Thursday (Nov. 17) by Euromoney explored how continually low interest rates are pressuring financial institutions in Europe to impose charges on corporate deposits. Treasurers are now figuring out how to respond to the possibility of more fees, the publication found.

In speaking with Deutsche Bank, for instance, the publication noted that corporate treasurers are already paying attention to any changes in their banking services.

“Corporate treasurers and financial officers have [a] very deep understanding of the banking products and partnerships within which they engage and so make sure to be fully informed as regards to any product fee they are charged,” stated Deutsche Bank’s head of trade finance and cash management corporates for German operations, Lothar Meenen.

The banking climate in Europe is causing problems in other ways, too.

The report said both companies and their banks are struggling because of the ongoing low interest rates, especially as more businesses report zero-yield deposits.

“Corporate control processes are now geared to this, and so, each needs to reconcile if and what this means,” explained Association of Corporate Treasurers Associate Policy and Technical Director Stephen Baseby. He added that, as corporates continue to hoard their cash, companies are understandably concerned about where to place liquidity, according to the report.

“We are experiencing a much more active dialogue with clients around deposits,” Deutsche Bank’s Meenen continued. “Clients are proactively bringing the topic to the table, and banks are looking to gain in the particular towards stress test-compliant product alternatives, such as term deposits.”