- Deutsche Bank has just announced a new strategy. Now, hundreds of thousands of business customers receive letters announcing price increases.
- This points to a trend that we could talk about soon: the banks are threatening another wave of price increases.
In the future, the focus will again be on the party for Deutsche Bank, according to executive director Christian Sewing in early July. After a trip to gaming capitalism, we want to rethink the roots as a customer bank. But how does the measure known today correspond? Neither 14 days after the cash house announced a new strategy, hundreds of thousands of corporate letters were shut down Monday. "Due to the low level of interest rates" and "significant changes in the market environment," the bank wrote, it was necessary to "adjust" "business accounts" on October 1. "Adapting models", "changing market environment" – behind them are almost always higher prices in banks.
In fact, many sole traders and traders in the future must pay much more for their business account in the largest German bank. With the most expensive model now, the price rises from € 19.90 per month to € 29.90, which is about fifty percent, while the jump is slightly smaller in other models. In addition, each individual incoming and outgoing payment will cost from seven to 22 cents. Previously, it was still an account model with free reservations, but a high base price.
The second wave of price increases
The bottom line may sound harmless. For many business customers, costs increase by just over EUR 100 per year, and private customers have not been affected so far. However, there is a trend that could still talk about itself in the coming months: the parties in Germany threaten the second wave of price increases. The main reason: the banks' hope for a quick turnover of interest rates has finally deteriorated in recent weeks. Stores, which is clear, will deteriorate in the coming years. If the economy is slowing down and the loans are again beginning to fall, things make things uncomfortable.
With regard to monetary policy, some clarity has been prepared on Thursday: the European Central Bank (ECB) could further reduce interest rates. Banks will probably have to pay a 0.5% share if they hold excess liquidity with the central bank rather than 0.4%. This is expensive: German banks paid negative interest on their deposits last year about 2.4 billion euros. The purpose of the measure is to encourage lending. State bonds are again partially traded with negative interest rates.
ECB interest rates are transferred forward
As early as 2017, many banks and savings banks raised fees for all banks – for checking invoices, bank transfers or withdrawals of ATMs. This justifies the policy of the central bank on a zero interest rate, which makes it difficult for them to earn money. That's only partially true. After all, the economy is booming partly thanks to monetary policy, which makes it so few loans unsuccessful, and rarely in history. Nevertheless, banks are trying to pass ECB penalties on customers in the form of higher fees. Just a few weeks ago, Postbank, belonging to Deutsche Bank, for the second time in a few years increased the prices of current accounts.
"The temptation to tackle short-term revenue problems through higher fees is high," says Peter Barkow, a bank expert from Barkow Consulting. It expects more banks to follow. Oliver Mihm, Head of Business Consulting, Investors Marketing, also assumes that other financial institutions will again raise prices. Anyone who, as a group of Deutsche Bank, has many millions of customers, has many leverage, at least until there are too many attractive customers. For example, if Postbank succeeds in taking only 20 euros a year and more in the average of the client, it will achieve an additional income of around 100 million euros – without additional costs for the bank.
In addition, many customers are still too slow to change their account – even if they are now service providers who help with the change of account and still invite some institutions with free accounts. In particular, for business accounts, the offer of free current accounts is limited. In the case of large banks, savings banks and cooperative banks, self-employed and freelancers in general are no longer successful.
According to the Biallo Comparison Portal, only three state institutes offer sole-free business accounts to sole traders. In accessing affiliates, however, Girocard should not give up on these accounts to self-employed persons. Above all, business customers need to change when changing their stationery, which is expensive. Adviser Oliver Mihm believes that the Deutsche Bank strategy is understandable. Prices are still on the market. "But it is also clear that if banks are too expensive to raise prices, the parties will leave," says Mihm.
Deutsche Bank hopes to maintain its customers with better deals. The strategy of winning a market share with low prices does not hold anything. There are "good reasons" for raising the price of business accounts, says Stefan Bender, head of corporate clients in Germany at Deutsche Bank. On the one hand, there is a strong increase in regulatory costs. "In addition, we have invested a lot of money and expanded the performance of business accounts, such as a business service that advises clients in banking business." There are several digital services. In addition, the basic price of certain accounts has been maintained since 2004. He did not say how many clients were affected.
In any case, higher prices are a small element in the big restructuring of the bank, as the monetary house again loses a billion in the second quarter. Sewing will report how high that loss will be this Wednesday.