Five Slovenian banks have introduced fees for deposits from companies, meaning they no longer pay interest but charge for the deposit of funds, and some fear this could extend to citizens’ savings. The president of the business association of Slovenian banks, former central bank governor France Arhar, stated in an interview with Slovenian television that he does not believe this will happen, although due to extremely low interest rates in the eurozone, so-called punitive interest rates or negative interest rates on private savings have already been introduced by two savings banks in Germany.
According to public data, Slovenians hold more than 16 billion euros in domestic banks, but mostly this is sight savings, as term deposits are no longer profitable due to the constant decline in interest rates. For a savings amount of 10,000 euros that is deposited for one year, Slovenian banks today pay interest ranging from 15 to 65 euros, while in 2008, such a term deposit could yield 550 euros in interest.
Despite multiple reductions in term savings, one evidently wealthier saver, according to tax authority data, earned a record 208,000 euros from interest, of which he had to give a quarter to the state due to income tax on interest.
In Slovenia, the largest bank, Nova Ljubljanska banka (NLB), which is state-owned despite being bailed out with state funds, was the first to start charging companies for their deposits in April of this year, and in the first half of the year, it reported a profit of 70 million euros. This practice, which has been adopted by several other banks, is not approved by the Chamber of Commerce, which claims that negative interest rates on deposits, or fees, create business problems for a quarter of Slovenian companies, although for now, these are relatively low “punitive interest rates.”
Along with NLB, fees for corporate deposits have also been introduced by Abanka, SKB Bank, which is part of the French group Societe Generale, Banka Koper, which is Italian-owned, and the Slovenian branch of the Russian bank Sberbank.
They have cited the negative interest rate on deposits introduced two years ago by the European Central Bank (ECB), which currently stands at -0.4 percent, and justify the procedure with the additional argument of the large amount of money now in circulation, meaning banks are no longer so dependent on deposits from citizens and economic entities.
The possibility of charging fees on deposits from companies, as well as citizens, is not excluded by other banks operating in Slovenia. They emphasize that they could be forced to do so if the ECB continues its increasingly pronounced policy of negative interest rates and if sight savings in banks continue to grow at the expense of term deposits.
