FILE PHOTO: A man walks past a UBS logo projected on a screen in Singapore, January 14, 2019. REUTERS/Feline Lim/File Photo
ZURICH (Reuters) – UBS Group will impose from November a negative interest rate of 0.75% on wealthy clients who deposit more than 2 million Swiss francs ($2.02 million) with its Swiss bank, it said on Wednesday, citing expectations for a long period of ultra-loose monetary policy.
“Following similar moves by a number of other banks here in Switzerland, we confirm that we’ve decided to adjust cash deposit fees for Swiss francs held in Switzerland,” the bank said, confirming a report by the Financial Times.
Beginning Nov. 1, private individuals holding cash balances above 2 million francs with UBS Switzerland AG will be charged the deposit fee.
“UBS has a wide range of investment products to offer clients alternative solutions. For clients who wish to hold higher Swiss franc cash balances, UBS offers attractive fiduciary deposits with other UBS Group entities or third parties,” it added.
Several banks in Switzerland including private bank Julius Baer and the eurozone already pass on the cost of negative official rates to corporate depositors, although most large players have refrained from doing so with individual clients.
Last month the Swiss National Bank kept the negative rate it charges on commercial banks’ sight deposits at -0.75%, while the European Central Bank deposit rate is -0.4%. The U.S. Federal Reserve is expected to cut interest rates on Wednesday.
UBS rival Credit Suisse said on Wednesday it was also thinking about imposing a levy on some wealthy clients.
Reporting by Michael Shields