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Moves in Denmark to institute Banking fees for account holders - Swedish banks will happily copy such moves

Monday, 21 January 2013
Banking in Denmark is soon becoming a costly business for bank account owners as one of the country's biggest banks, Danske Bank has made it clear that it will start charging customers for the privileged of having an account with them.

Strategically, the bank wants to eliminate smaller account holder whom the bank feels that it is making a loss from them. The effect is that this mode could spreads to it branches in other countries such as Sweden where banking is already very expensive for account owners.

According to Swedish daily, Dagens Nyheter, as things get tight for Danish banks - some of which have been falling off the cliff, Danske bank feels that it could raise money from new fees and charges as part of a larger change aimed at making more money from private customers, writes the Danish Berlingske, according Degens Nyeheter.

Customers are said to be divided into six groups and are offered various subscriptions to their services. The annual cost of having money in the bank will be up to Dkr480 per account holder. Only customers who have businesses and bank over Dkr750,000 will not be charged. There will also be an end to the free bank advice to smaller customers.

"It will both improve customer satisfaction and profitability, said Tonny Thierry Andersen, head of private clients at Danske Bank, to Reuters, according to Dengens Nyheter.

So far customer in other branches out of Denmark, such as in Sweden have not yet been affected, said Erik Kristow, Press Officer at Danske Bank in Sweden. But he said that "his is a model that has been developed in Denmark, but one can not rule out anything, it is possible that there will be something similar in other countries. So far we have no such information," says Kristow to Dagens Nyheter.

He also stresses that the model in this case will be adapted for the local markets.
Danske Bank claims that 40 per cent of Danish customers have been unprofitable for the bank. This comes after the leading Danish bank has been squeezed by the bursting of the Danish housing bubble, which it was proper exposed, and impairment of loans to farmers.

Several hundred Danes have expressed dissatisfaction on Facebook and Twitter and threatened to switch banks. However, it probably has not yet scared Danske Bank.
"It is more than likely happy to get rid of the smaller customers. If they are not willing to pay, and thus leave the bank, it will be for Danske Bank's own benefit, says Finn Östrup, professor at the Copenhagen Business School, the Danish daily, Berlingske.
by Scancomark.com Team

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