London Daily

Focus on the big picture.
Sunday, Oct 26, 2025

Europe's banks turn to fees to kick customers' branch habit

Europe's banks turn to fees to kick customers' branch habit

At Spain's Caixabank (CABK.MC) most customers visiting a branch for a service they could access online will now have to pay two euros for the privilege.

The fees are part of a shift by European banks, suffering from years of negative interest rates, to start turning the screws on customers who still rely on dense branch networks.

A surge in deposits during the pandemic - which banks then have to pay to park at the central bank - is spurring many European lenders to start squeezing money out of services they used to perform for free.

"A main part of our business, taking deposits, is becoming a loss-making activity. What was once part of our core business and profits is now making losses," said Caixabank's CEO Gonzalo Gortazar last month.

With Gortazar's bank about to complete the integration of Bankia following its 4.3 billion euro ($4.92 billion) acquisition, it is sending its more than seven million new customers the details of the fee policy – including the branch usage fee which was detailed in a client letter seen by Reuters.

Charges on a debit card for non-loyal customers could rise to 36 euros from 28 euros if former Bankia clients do not use a new credit card issued by Caixabank dubbed 'My Card', which brings the bank more profitable lending opportunities.

Bankers say it is a necessary move to sustain profitability.

Spanish banks are struggling to earn money from lending, and their revenues declined 2% in the first half of 2021 compared to the same period in 2020, according to the Bank of Spain.

BBVA (BBVA.MC) now charges 2 euros for withdrawing less than 2,000 euros at a branch, while Santander will charge some clients up to 240 euros a year just to maintain a bank account if they don't meet certain conditions.

"All our competitors are doing similar things. You just can't give away all services for free," a deputy retail head of a big Spanish lender said on condition of anonymity.

RISING FEES


In Germany, banks are also introducing new fees.

From Nov. 10 DKB bank has started charging new customers fees on accounts with more than 25,000 euros, while ING clients will start paying 99 cents a month from next March for debit cards, on top of a 4.90 euro charge a month for accounts that was introduced in 2020.

In Italy, consumer association Altroconsumo said in September that the cost of bank accounts with home banking services had increased by an average of 11-15% in 2021.

The 2021 McKinsey global payments report released in October said the shifts are a response to the billions of dollars of revenue lost in net interest income at European banks during the past decade of low or negative rates.

Commissions at Spanish lenders rose 16% in the second quarter to 4.18 billion euros ($4.83 billion) from a year ago, while mortgage lending grew just 0.54% in the same time.

As of end-June, the ratio of Spanish banks' net fee and commission income to their total net operating income was around 25%, below the 32% average for European banks and well below the almost 40% for Italian banks and 37% for German banks, data from the European Banking Association (EBA) showed.

VULNERABLE CUSTOMERS


Some officials are warning of risks of growing financial exclusion caused by the changes, despite banks' efforts to provide exemptions for elderly customers.

"Although the closure of branches in rural areas can be justified by the search for profitability and a decline in demand, this reduction affects the population, especially in relation to access to cash, which cannot be covered, like other banking services, through electronic banking," the Bank of Spain said in its latest annual report.

Even in cities like Madrid, older clients can feel left behind.

"I received an electronic notification about potential hikes in fees but my PC is not working properly and I struggle to use the app on my mobile," said 78-year-old Carmen Reyes, who said she has been a Bankia customer for 70 years.

"If they close my branch I would leave."

($1 = 0.8734 euros)

Newsletter

Related Articles

0:00
0:00
Close
Tesla Unveils Vision for Optimus V3 as ‘Biggest Product of All Time’, Including Surgical Capabilities
Francis Ford Coppola Auctions Luxury Watches After Self-Financed Film Flop
Convicted Sex Offender Mistakenly Freed by UK Prison Service Arrested in London
United States and China Begin Constructive Trade Negotiations Ahead of Trump–Xi Summit
U.S. Treasury Sanctions Colombia’s President Gustavo Petro over Drug-Trafficking Allegations
Miss USA Crowns Nebraska’s Audrey Eckert Amid Leadership Overhaul
‘I Am Not Done’: Kamala Harris Signals Possible 2028 White House Run
NBA Faces Integrity Crisis After Mass Arrests in Gambling Scandal
Swift Heist at the Louvre Sees Eight French Crown Jewels Stolen in Under Seven Minutes
U.S. Halts Trade Talks with Canada After Ontario Ad Using Reagan Voice Triggers Diplomatic Fallout
Microsoft AI CEO: ‘We’re making an AI that you can trust your kids to use’ — but can Microsoft rebuild its own trust before fixing the industry’s?
China and Russia Deploy Seductive Espionage Networks to Infiltrate U.S. Tech Sector
Apple’s ‘iPhone Air’ Collapses After One Month — Another Major Misstep for the Tech Giant
Graham Potter Begins New Chapter as Sweden Head Coach on Short-Term Deal
Ecuadorian President Daniel Noboa Alleges Poison Plot via Chocolate and Jam
Lakestar to Halt External Fundraising as Investor in Revolut and Spotify
U.S. Innovation Ranking Under Scrutiny as China Leads Output Outputs but Ranks 10th
Three Men Arrested in London on Suspicion of Spying for Russia
Porsche Reverses EV Strategy as New CEO Bets on Petrol and Hybrids
Singapore’s Prime Minister Warns of ‘Messy’ Transition to Post-American Global Order
Andreessen Horowitz Sets Sights on Ten-Billion-Dollar Fund for Tech Surge
US Administration Under President Donald Trump Reportedly Lifts Ban on Ukraine’s Use of Storm Shadow Missiles Against Russia
‘Frightening’ First Night in Prison for Sarkozy: Inmates Riot and Shout ‘Little Nicolas’
White House Announces No Imminent Summit Between Trump and Putin
US and Qatar Warn EU of Trade and Energy Risks from Tough Climate Regulation
Apple Challenges EU Digital Markets Act Crackdown in Landmark Court Battle
Nicolas Sarkozy begins five-year prison term at La Santé in Paris
Japan stocks surge to record as Sanae Takaichi becomes Prime Minister
This Is How the 'Heist of the Century' Was Carried Out at the Louvre in Seven Minutes: France Humiliated as Crown with 2,000 Diamonds Vanishes
China Warns UK of ‘Consequences’ After Delay to London Embassy Approval
France’s Wealthy Shift Billions to Luxembourg and Switzerland Amid Tax and Political Turmoil
"Sniper Position": Observation Post Targeting 'Air Force One' Found Before Trump’s Arrival in Florida
Shouting Match at the White House: 'Trump Cursed, Threw Maps, and Told Zelensky – "Putin Will Destroy You"'
Windows’ Own ‘Siri’ Has Arrived: You Can Now Talk to Your Computer
Thailand and Singapore Investigate Cambodian-Based Prince Group as U.S. and U.K. Sanctions Unfold
‘No Kings’ Protests Inflate Numbers — But History Shows Nations Collapse Without Strong Executive Power
Chinese Tech Giants Halt Stablecoin Launches After Beijing’s Regulatory Intervention
Manhattan Jury Holds BNP Paribas Liable for Enabling Sudanese Government Abuses
Trump Orders Immediate Release of Former Congressman George Santos After Commuting Prison Sentence
S&P Downgrades France’s Credit Rating, Citing Soaring Debt and Political Instability
Ofcom Rules BBC’s Gaza Documentary ‘Materially Misleading’ Over Narrator’s Hamas Ties
Diane Keaton’s Cause of Death Revealed as Pneumonia, Family Confirms
Former Lostprophets Frontman Ian Watkins Stabbed to Death in British Prison
"The Tsunami Is Coming, and It’s Massive": The World’s Richest Man Unveils a New AI Vision
Outsider, Heroine, Trailblazer: Diane Keaton Was Always a Little Strange — and Forever One of a Kind
Dramatic Development in the Death of 'Mango' Founder: Billionaire's Son Suspected of Murder
Two Years of Darkness: The Harrowing Testimonies of Israeli Hostages Emerging From Gaza Captivity
EU Moves to Use Frozen Russian Assets to Buy U.S. Weapons for Ukraine
Europe Emerges as the Biggest Casualty in U.S.-China Rare Earth Rivalry
HSBC Confronts Strategic Crossroads as NAB Seeks Only Retail Arm in Australia Exit
×